Canadian taxes

1.  Am I really self employed? – Self-employment is determined by the amount of control you have over your work. If you are in any doubt about your relationship, you can request a ruling from the CRA using Form CPT1, Request for a Ruling as to the Status of a Worker under the Canada Pension Plan and/or the Employment Insurance Act.

2.  What is the per kilometer rate? – Unless you have already submitted a logbook to the CRA for a previous year, you cannot use a simplified method to calculate your auto expenses. You need to have a detailed logbook for the year to report your expenses correctly.

3.   Does a sign on my car mean I can claim 100% of my mileage? – You can claim the sign cost as an advertising expense but it does not mean every kilometer you drive is for your business. You still need to record your kilometers in a logbook.

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Employee expenses: Most regular employees are not allowed to deduct expenses related to their jobs – services such as dry cleaning or haircuts. But anyone who earns employment income during the tax year can claim the $1,065 Canada Employment Credit.

Tuition credits: If you carried forward unused tuition credits, you can claim it against your employment income and it could result in a refund.

Save for the future: Retirement may seem like a long way off but even if you do not contribute the maximum amount allowed to your Registered Retirement Savings Plan, you can carry forward your available deduction limit for future years. It means you can save more when you are earning more income.

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People entering Canada can be classified as: non-residents, deemed residents or part-year residents. Although the tax treatment and deductions differ for each classification, part-year residents are the most common type. Here are some important tax tips that will help part-year residents:

• In Canada, residents are taxed based on their world income. Part-year residents must report all income from anywhere in the world after their arrival in Canada.

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• Eligible dependants: Single parents are allowed to claim the $10,527 the amount for an eligible dependant (sometimes referred to as equivalent to spouse) for one of their children as well as the $2,131 Child amount. You have to support your child in a dwelling which you live in and maintain.

• Joint custody: If there are two children and the parents share joint custody, then each parent can claim the equivalent to spouse amount for one child. But if you pay child support, you cannot claim this credit.

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Income split and save: Seniors are allowed to split up to half of their eligible pension income with a spouse or common-law partner. Income splitting allows some seniors to enjoy a significant tax reduction. In the situation where the lower-income spouse has very little income, the tax savings are substantial.

Get your benefits: Any senior receiving Guaranteed Income Supplement (GIS) through Old Age Security should file on time to ensure their benefits continue uninterrupted.

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