The costs of home office can only be deductible when:

• The place where individual principally performs the duties of the office or employment or
• Used exclusively during the period in respect of which the amount relates for the purpose of earning income from the office or employment and used on a regular and continuous basis for meeting customers or other persons in the ordinary course of performing the duties of the office or employment

If the home office is in rented property, the percentage of rent and any maintenance cost can be deductible only if it is related to the home office.

For an employee, the deductions of home office costs include maintenance costs such as fuel and electricity, light bulbs, cleaning materials and minor repairs. For a salesperson, he can deduct the maintenance cost in addition to property taxes and house insurance program.

Note that the deduction of home office is limited to the employment income. That means the home office cost cannot be used to create an employment loss. However, the excess amount can be carried forward to the following year.

The age credit is eligible for individuals who has attained the age of 65 years before the end of the year. However, this credit is reduced by the individual’s 15% of excess net income over the threshold amount ($32,961)

For example, an individual above the age of 65 earns a net income of $45,000. Then the tax credit available to this individual is:

Age tax credit base                                                                                 6537

Less: Base reduction of lesser of:

–          Credit base                                                                    6537

–          Taxable income minus threshold 15%(45,000 – 32,961)     1806

Lesser amount                                                                                        1806

Net tax credit base                                                                                  4731

Tax credit (15%)                                                                                                  710

Note that the age credit is transferrable to a spouse or partner.

Child tax credit is available for each child who is under 18 years of age at the end of the taxation year. The credit has a value of $2131 per child. This credit has no threshold amount so it is not reduced by the child’s income or family income. This credit can be claimed for a particular child in conjunction with the eligible dependent credit.

How to compute?

Basic personal tax credit base in 2011                                                       10527

Spouse’s tax credit base in 2011                                       10527

Less spouse’s net income                                                 XXX

Net amount                                                                    XXX                 XXX

Tax credit (15%)                                                                                                XXX

If a taxpayer has multiple spouse or common law partners, he can only claim one spousal credit.

The disability tax credit is available to taxpayers who have a severe and prolonged impairment in physical or mental function that has been certified by a medical doctor.

An additional supplement amount can be claimed for each disabled child under 18 years of age at the end of the year. However, this amount may be reduced by particular child expense and attendant care expense.

Transferring disability credit

All or part of the credit may be transferred to a spouse or a supporting person who claimed the disabled individual as a dependent under the eligible dependent provision or as a disabled dependent over 17.

Available transferees include:

• Parents
• Grandparents
• Children
• Grandchildren
• Brothers
• Sisters
• Aunts
• Uncles
• Nieces
• Nephews

Students are eligible for textbook credit for each month in which the student is entitled to claim the education credit.

–          65 dollar credit base for full time student

–          20 dollar credit base for part time student

Carryforward and Transfer of Tuition Credit

The tuition credits may be transferred to a spouse, parent or grandparent of the student. The student must specify in writing the amount that will be transferred.

The amount that can be transferred is computed as follows:

The lesser of:

a)       The amount determined by A-B

• Where A is the lesser of
  • Student’s tuition credit and education credit for the year
  • Current year’s tax rate multiply by 5000
• Where B is the amount of the student’s Part I tax payable after deducting credits for personal, age, pension, mental or physical impairment, EI, CPP, unused tuition and education

b)      The amount specify for transfer by the student

Note that unused credits are carryforward indefinitely

Students are eligible for a tuition credit if the student is enrolled as a full time student in a qualifying educational program at a designated educational institution. An alternative credit may be available to students if they attend a specified educational program.

st1:country-region w:st=”on”>Canada provides 15% tax credit for tuition fees paid in the year to a Canadian college, university or other educational institution that provides courses at a post secondary level or a non-credit course in a certified educational institution inCanada which provides students with occupational skills training. Note that student union or association fees are not included. Also note that the above applies to Canadian universities. For University outside ofCanada, please consult a tax professional.

Canada provides 15% tax credit for tuition fees paid in the year to a Canadian college, university or other educational institution that provides courses at a post secondary level or a non-credit course in a certified educational institution in Canada which provides students with occupational skills training. Note that student union or association fees are not included. Also note that the above applies to Canadian universities. For University outside of Canada, please consult a tax professional.

What qualifies as a charitable gift?

Charitable gifts include:

• Canadian registered charities
• Registered Canadian amateur athletic associations
• Prescribed universities outside of Canada
• Certain tax –free housing organization in Canada
• Canadian municipalities
• The United Nations or its agencies
• Charities outside of Canada to which the Government of Canada has made a donation in the year or preceding year
• Crown gifts
• Cultural gifts
• Ecological gifts

How to compute?

(AxB) + C(D-B)

A = 15% (Current federal tax credit rate for the year)

B = First 200 dollars of the total gift

C = 29% (Highest federal tax bracket for the year)

D = Individuals total gift

Limitations and carry forwards

This credit is only limit to 75% of the taxpayer’s net income. If the eligible donation in one year exceeds the taxpayer’s 75% of net income, then the excess amount is carried forward to the next 5 years. The carried forward amount is then claimed first before any additional amounts can be claimed.

What are the conditions that must be met in order to claim this credit?

A dependant is classified as a child, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece, nephew or spouse. In order for the taxpayer to claim this credit, the dependant of the taxpayer must have attained the age of 18 before the end of the year and be dependent on the taxpayer because of mental or physical infirmity.

How to compute?

Dependant’s tax credit base                                                                                              4282

Less dependant’s Division B income                                                         XXX

Minus: Threshold income (2011)                                                              6076                 XXX

Tax credit base                                                                                                               XXX

Tax credit (15%)                                                                                                                        XXX

Note that if the dependant’s net income is greater than $10358, then this credit is not available to the taxpayer