The Federal Tax Credits Blog

Posts Tagged ‘canada’

Question: Will I get a bigger tax refund if I deduct my medical expenses in addition to my education expenses?

My income is low (less than $35,000) because I got laid off in the early part of 2008. I went back to school in 2008 and paid $3900 in qualified education expenses. I also had $3500 in medical expenses, which is greater than 7.5% of my income so I should be able to use it as a deduction as well. If I deduct both my education and medical expenses, will I get a bigger refund than if I deducted only the education expenses?
I’m just trying to get an idea of how much my refund will be. When I use TurboTax’s online tax refund calculator, the result is the same whether I use just the Lifetime Learning credit or whether I use both the Lifetime Learning credit and deduct my medical expenses. When I use bankrate.com’s online tax refund calculator, I get a bigger refund by using both of them (i.e., the Lifetime Learning credit and the medical deduction). I’m so confused…

Answer: What else do you have to itemize? Of your $3500 of medical expenses, about $900 will show up on schedule A, but if that’s all you have, the standard deduction of $5450 is already more than that.

Number of changes for taxpayers

It’s that time of year again to dig out financial records and go through the painful process of filing income tax returns. Perhaps it will be a little less painful this year, though, thanks to several provisions in the American Recovery and Reinvestment Act enacted a year ago.

Mortgage Watchdog Interest Calculator Saves You Bank Rip Off

Question: How easy is it to get the Sure Start Maternity Grant?

The form which my midwife gave out says you have to be claiming jobseekers allowance, income support, or working tax credit with a disability amount.

We are claiming working tax credit but not with a disability amount. Would we still be entitled?? We really could do with this money as we have not been lucky enough to be given baby stuff from family and friends and have to buy everything from scratch. And money is tight.

Answer: i dont think u are intitled sorry

Most workers need to file new schedule m

Two special tax credits offer taxpayers an opportunity to lower their tax bill or increase their refunds this filing season. Both credits are claimed on new Schedule M, Making Work Pay and Government Retiree Credits.

Myriad Canadian tax credits

Question: US Canada taxes?

Hi, my situation is as follows:
- I currently live in Canada and work for a company in the US.
- work from my home in canada and travel to US (MA) for 3 days a month
- pay US federal taxes, but not state taxes

When I filed my taxes in Canada last year I claimed the foreign tax credit for the federal US taxes I paid. However, I am concerned that I should have applied to the US to refund most of the taxes I paid since most of the services I performed were in Canada. Is this what I need to do or do I just claim all of the taxes I paid to the US on my Canadian return?

Thanks.

Thanks for you help.

Answer: You are an employee of an American company, and therefore earn the income outside of Canada. You may do most of the work in Canada, but only because you work from home.

Canada and the US have a tax treaty. That means that you file your return here, and the taxes that you paid in the US count towards the taxes you pay for Canada.

You report your gross income (amount before taxes and income). Then you get a tax credit for the US federal tax that was withheld.

Here’s what the CRA says:
————————————

Line 104 – Foreign employment income

Foreign employment income is income earned outside Canada from a foreign employer. Report this income in Canadian dollars. Use the exchange rate that was in effect on the day you received the income or, if the amount was paid at various times throughout the year, you can use our average annual rate.

Note
U.S. wages reported on a U.S. W-2 slip may be reduced by such contributions to a “401(k), 457 or 403(b) plan, US Medicare and Federal Insurance Contributions Act (FICA)”. These contributions are not deductible on your Canadian return and must be added to your employment income at line 104.

If you paid foreign taxes on foreign income you received, do not reduce the amount you report by the amount of tax the foreign country withheld. However, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes. See line 405 – Federal foreign tax credit, for details.

Year-end tax planning can save you money

(Special) – The end of the calendar year often is the time when many Canadians start to think about making resolutions they hope to keep in the New Year. But it’s also a great time to do a little a little tax planning that can help you reduce your tax bills and get your investment portfolios in shape for the coming year.

Tax Credit for Active Kids : Family Tax Preparation Services Canada

Question: What percentage of renovations cost qualify for the HRTC?

I am planning some home reno’s and want to know what percentage of the reno expenses qualify for the new Home Renovation Tax Credit.

Answer: The base of the HRTC is 15% of the renovation expense, on expenses up to $10,000. The first $1,000 is a base and does not receive a credit.

For example:
Renovation Cost $7000
Base amount -$1000
Eligible Expense $6000
HRTC $900

Since the maximum eligible amount is $10,000 the maximum credit you can get is $1350 (15% of $9000)

Monday December 28, 2009 – 13:02 EST

LAS VEGAS, Nevada — If you don’t like bad news, stop reading now. Besides, if you’re a regular Review-Journal reader, you’ve heard everything we’re about to tell you.

Home Reno Tax Credit and what you may not know

A GSA schedule is a five-year agreement offering a set pricelist the federal government has agreed to pay for the products and services of a business. The GSA contract is up for renewal every 5 years, at which point it must be renewed. In renewing a GSA schedule, the company and government re-evaluate the prices that are offered for government contracting. There is still some competition for a government bid, however a company holding a GSA Contract has a large advantage. Often, the only competition would be another business on schedule with a GSA contract, or a company that makes a very specialized item. Therefore, competition is reduced due to the prices contained in a schedule which are pre-negotiated at the time of contract award. Often times the competition is between only businesses with GSA Contracts, and those without a GSA Contract are our of the race before it began. GSA Contract holding companies will not achieve sales under the contract without focused, agency-based sales efforts. It does take some time to become an established federal contractor, even with a GSA Contract. But, once a company is established, the GSA Contract alongside a track record of successful contracts will secure a strong position for any business in the federal market. Federal buyers, or procurement officers, are usually required to request proposals from three contractors and decide on the winning vendor based on best value.

However, best value does not mean the lowest price. Put yourself in the place of a contracting officer. They generally are not experts on what they are responsible to procure, they just want to make sure that tax dollars are fairly represented. The two biggest factors when a CO determines the best value are performance history and price tag. But, there is a lot to be said for the influence of the end-user. It may not be the ideal tax-payer protection, but it is actually a quite functioning system. Here is why: A company that has their GSA Contract and has worked with Nellis Air Force Base on successful projects is likely to win even more projects on that military base. In the end, federal employees just want to avoid being responsible for wasting taxpayer dollars, and the proven contractor is most often the best bet. The use of a GSA Contract is an efficient buying system, and is becoming increasingly popular among federal purchasers. Administrative costs for providing products or services under GSA contracts are significantly lower than the costs of dealing with individual contracts. Companies with a GSA Schedule are given a substantial advantage in competing for bids in the federal market.

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