When we decide to stop working and enjoy retirement, it’s important to rebalance our finances as well as our lives. During this transition, countless questions may come to mind ranging from the practical to the esoteric. “When can I stop filing my income tax?” is one we can help you with. (“What do I do now?” is not.)
We want to make it easy to get all your important financial items sorted so you can relax in comfort and enjoy the freedom of this exciting new chapter.
Below are our top three tax-related questions that you may like to know…
When Can I Stop Filing My Income Tax?
Some people assume that once you retire, you get a break from filing your Canadian T1 General tax return. However, income tax is impacted by more than just employment status. Regardless of age, you will need to file your taxes if you have other sources of income or financial ties.
Simply put, if you answer yes to any of the following, you must file your taxes…
- You owe money to the Canada Revenue Agency (CRA)
- You are self-employed and need to pay your Canada Pension Plan premiums and Employment Insurance premiums
- You need to repay any Employment Insurance Benefits or Old Age Security
- You received Canada Workers Benefit advance payments
- You are still making repayments on your Home Buyers’ Plan or Lifelong Learning Plan
- You want to split your pension income with your spouse or common-law partner
- You got rid of capital property
- You live in another country but still receive income from investments, property or a business you own in Canada
- The CRA has sent you a Request or Demand to File
You may also wish to file if…
- You want to claim a refund
- You qualify for the GST/HST Credit
- You and your spouse want to receive theGuaranteed Income Supplement on your Old Age Security payments
Can I Defer My Property Tax?
Without a regular employment income, many seniors worry for how long they’ll be able to keep their home after retirement. Fortunately, there’s Property Tax Deferment, a low-interest provincial program that helps B.C. homeowners cover the annual property tax on the home they currently live in.
To apply for deferment, qualified homeowners must be one of the following…
- Over the age of 55
- A surviving spouse
- An eligible person with disabilities
- Someone who financially supports a dependent child
Taxes can be deferred for any year that qualified individuals reside at their principal residence. Then, at a later date, homeowners can take advantage of the appreciation in value of their home to pay for their property taxes.
For each year that you wish to defer your property taxes, you must reapply for the program. Interest is charged on your tax deferment loan from either the date of your application or the day your property tax is due, whichever comes later.
Now, if you plan on staying in your home for the long haul, you might eventually need to make a few modifications to your living space to accommodate certain mobility issues or health needs as they arise. Renovations can be a huge expense, in which case, you may be wondering…
Do I qualify for a Home Renovation Tax Credit?
A Home Renovation Tax Credit can be claimed on your income tax if you are 65 years of age or older, or have a disability that prevents you from completing essential daily tasks on your own.
This credit allows you to deduct 10% (or up to $1,000) of your qualifying home modification expenses from your B.C. income taxes.
The federal government also offers tax credits to cover home accessibility expenses, so it’s important to do your research to ensure you understand the eligibility requirements for both.
Your retirement is supposed to mark a significant milestone of freedom, not be something to fear. Still have more questions? Please give us a call at 250-590-5162. We have plenty more financial tips to help you navigate this new terrain.