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Homeowners: Let the CRA help you lay the foundation for tax filing success

Homeowners: Let the CRA help you lay the foundation for tax filing success

Buying a home may be the largest financial investment you make in your lifetime. As with any major purchase, many factors and sleepless nights play into the decision. Whether you’re jumping into the housing market for the first time, or moving up to accommodate a growing family, the Canada Revenue Agency (CRA) has resources and programs to help homeowners keep money in their pocket at tax time.

READY TO BUY?

So, you’re ready to take the plunge and make yourself at home. The process to become a homeowner can be overwhelming. If you have a registered retirement savings plan (RRSP), there’s good news. Under the Home Buyer’s Plan, you might be eligible to withdraw up to $25,000 from your RRSP to use toward your down payment or help with the construction of your new home. For more information about the Home Buyers’ Plan, go to cra.gc.ca/hbp.

FIRST-TIME BUYERS

You’ve signed the paperwork, have the keys in hand, and are ready to open the door to your home sweet home. Being your own landlord is a dream come true, but the lack of extra funds resulting from your new mortgage payment is hitting a little too close to home. Fortunately, as a first-time homebuyer, you or your spouse may be entitled to claim the homebuyer’s tax credit of up to $750. Your new home must be a qualifying home in Canada and registered in your or your spouse’s name or in both your names. To find out more about this tax credit, go to cra.gc.ca/hbtc.

MOVING TIME

Rental truck: check! Boxes packed: check! Welcome to moving day. Did you know that you might be able to deduct moving expenses if you move 40 kilometres closer to work at a new location, or to attend school if you’re a full-time, post-secondary student? Moving expenses also include costs related to selling your old home and purchasing your new home, such as realtor commissions, legal fees, and even mortgage penalties. You might also be able to deduct travel expenses, storage fees and the cost of revising legal documents, such as your driver’s license. Find out more at cra.gc.ca/moving.

REBATES

If you bought a new home and paid less than $450,000, you might be eligible for the GST/HST new housing rebate. The rebate might also apply if you built a new home on land you own or lease, as long as the fair market value is less than $450,000. In either case, the home must be your primary residence.

RENTAL INCOME

Looking to generate a little cash from rental income? You might also be eligible for the GST/HST new housing rebate if you purchased, built, or majorly renovated rental housing and the purchase price or fair market value was less than $450,000. For more information, go to cra.gc.ca/myhome.

ONLINE TOOLS

Don’t forget to give the CRA your new address. You can update your information and stay up to date on many of your tax matters online by using My Account at cra.gc.ca/myaccount. Track your return status, change your address, check your RRSP and TFSA contribution limits, register for online mail, print proof of income, and so much more, all with a few clicks of a mouse. My Account makes it easy to get your (tax) house in order.

2016 DEADLINES

Whether you’re lord of the manor or queen of the castle, most Canadian income tax and benefit returns for 2015 are due on April 30. However, since this date is a Saturday, the CRA will consider your return as filed on time and your payment to be made on time if it receives your submission or it is postmarked by midnight on May 2. Self-employed individuals and their spouses or common-law partners have until June 15 to file their income tax and benefit returns, but any balance owing is still due no later than May 2. Take advantage of pre-authorized debit to set up your payments in advance. To learn more about your payment options, go to cra.gc.ca/payments.

FILE ONLINE

Finding domestic bliss in a new habitat takes work. You’d rather spend your time decorating than doing your taxes. Why not save time and file your taxes online? It’s easy, secure and allows the CRA to process your return much faster. And if you’re entitled to a refund and are registered for direct deposit, you can enjoy your money in as little as eight business days. For a list of certified software and web applications, including some that are free, go to cra.gc.ca/netfilesoftware. Also, new this year, the CRA’s auto-fill my return service is available through some certified software. This secure service automatically fills in certain parts of your income tax and benefit return. To use auto-fill my return, you must be fully registered for My Account at cra-arc.gc.ca/esrvc-srvce/tx/psssrvcs/menu-eng.html.

UNDERGROUND ECONOMY

Even minor jobs around the house become costly when a professional is involved, which is why discounts for cash payments can be enticing. However, when you pay under the table, you’re participating in the underground economy. You might think you’re getting a deal by paying cash and avoiding taxes for such things as a small plumbing or electrical job, a roof fix, or even the construction of your dream porch, but it can leave you with no proof of payment or recourse should a goods or services provider not fulfil their obligations. Save yourself a lot of trouble and do everything by the book.

Don’t miss the latest CRA news or tax tips; follow the CRA on Twitter @CanRevAgency

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