“Consider Filing a Tax Return — Even If You Don’t Owe Anything” plus 1 more

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Consider Filing a Tax Return — Even If You Don’t Owe Anything Posted: 02 Apr 2012 04:00 AM PDT Many people assume that it’s not worth it to file a tax return if no tax is owed. And, technically, you only have to file a tax return if you actually owe tax, or if your earnings are those on which CPP contributions are paid. You also need to pay if you have withdrawn from your RRSP under the Lifelong Learning Plan or Home Buyers’ Plan (and haven’t repaid the amount), or if you got rid of capital property during this year, or claimed a capital gains reserve on last year’s tax return. And, of course, sometimes the CRA just asks you to fill out a tax return and send it in. You might be surprised, though, to find that it is worth it, in certain circumstances, to file a tax return even if you wouldn’t normally think to. There are several advantages associated with filing a tax return — and a number of benefits you can’t actually claim unless you have properly filed your tax return. Here are some things to consider as you decide whether or not to file a tax return: Receive a refund: If you don’t owe tax, might still be entitled to a refund. However, you won’t receive that refund unless you file a tax return. If you have been paying tax throughout the year, and you have overpaid, you need to file a return if you want your money. Additionally, you might have refundable credits as well. You can’t take advantage of these refunds if you don’t file a return. Earned income for RRSP: Even though you don’t contribute to your RRSP right now, earned income amounts carry forward. File your return now, and carry forward. Renew your GIS: Seniors renew the GIS when they file returns. GST/HST credit: If you want the GST/HST credit, you need to file a return. You need to be 19 before April 1 of the following year, applying for the GST credit as early as possible can help you receive your benefits faster. CCTB: You won’t receive your child tax credit unless you and your spouse file tax returns. Non-capital loss: This can carry forward, so filing your tax return showing that you plan to carry forward can set you up for benefits later on. Carry forward education costs: You can also use your tax return as a way to carry forward amounts from textbooks and tuition amounts. As you can see, there are reasons to file a tax return even if you don’t owe taxes. At the very least, filing a tax return establishes the proper paper trail for making certain tax advantaged retirement and savings contributions later on down the road. Your eligibility for different benefits and programs is established by your tax return, so filling one out is encouraged for that reason. Visit our Tax Center for more tax tips and savings.

Tax Law Changes: Energy Tax Credit Posted: 02 Apr 2012 03:55 AM PDT Did you decide to Go Green in 2011? If you made energy savings improvements to your primary residence during the 2011 tax year, you may be eligible to take advantage of tax credits. These credits are designed to help homeowners recover some or all, of the purchase price of these improvements. In some cases, these credits will also cover professional installation costs in addition to the price of the actual hardware or items themselves. Does my 2011 Home Improvement Qualify for a Tax Credit? Not all energy savings improvements will qualify for a 2011 tax credit. And, the full amount of the improvement may not be deductible. To determine eligibility, start by reviewing your list of 2011 home improvements to see which ones apply to your home. Below is a list of the most commonly deductible energy improvements: Storm Windows Storm Doors Skylights Central Air Conditioning Units Insulation Roofing- Asphalt Roofs Furnace Water Heaters You could be eligible to receive up to 10% of the total cost of these improvements in the form of a tax credit. However, keep in mind that the lifetime maximum for taking advantage of such a credit is currently set at $500 in total for 2011, $200 of which can be attributed to the addition of energy efficient windows. Some improvements qualify for as much as a 30% credit, without an upper limit, through 2016. These items include geothermal heat pumps, solar energy systems, wind energy systems and fuel cells. While these items are less commonly installed in residential properties, it is critical to check if they apply to your 2011 home improvements. A detailed description of the energy credits available are outlined in Part 2 of the IRS Form 5695, noted as the "Residential Energy Efficient Property Credit".

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