Tax Lines to Look Out for 2018 Income Tax Year

It’s that time of year again when many of us sit down to complete our income tax returns and hope that we have done enough preparation to ensure a smooth tax return. We’ve outlined the key lines to look out for in the 2018 Income Tax Year, below:

Expenses related to medical expenses have been expanded to include service animals and can be claimed for a non-refundable tax credit. You should also be aware that you can claim for yourself, your spouse or common law partner, and any dependent children under the age of 18.

Tax on Split Income (TOSI) (Line 424) 

When income splitting with children and/or spouses, business owners will now need to prove that the child(ren) and/or spouse is actively engaged in the business to receive this income. Otherwise, the business owners will be taxed at the highest tax rate. 

Interest Expense & Carrying Charges (Line 221)

Any fees paid for specific advice about your investments or for tracking your income from investments, may be tax deductible. Any fees paid for the management of your investments, except administration fees paid for your registered retirement savings plan or registered retirement income fund, may be tax deductible Interest incurred when borrowing to invest for investment income only, may be tax deductible. Insurance policy loan interest you paid in 2018 to generate income for business or investment purposes, may be tax deductible. To claim this amount, the insurance company must complete Form T2210 before your tax return deadline.

Carry forward information (Line 208 and 253)

If you are not deducting all RRSP contributions that you made in 2018 and at the beginning of 2019, your unused contributions can be carried forward. If you incur a capital loss, you can apply that loss against the last 3 years of capital gains or indefinitely towards future capital gains.

General Tip: File your tax return as early as possible. If the CRA owes you money, the earlier you file, the earlier you receive your return. If you owe money when your income tax return is complete, you have more time to make your tax payment, with the deadline being April 30th.

This article and infographic are for illustrative purposes only. You should always seek independent legal, tax, financial and accounting advice with regard to your situation.