By Sebastian Kanally, Times Chronicle

There is much value to be gained in understanding how different tax filing looks in this country if you are a senior. There are numerous tax benefits that you become eligible for that younger taxpayers do not have access to, resulting in even more ways to save money. 

Tax season is almost over with a deadline of May 1, 2023 for the Canada Revenue Agency to receive your return. Despite the ongoing labour dispute and strike of thousands of public servants, there is no extended deadline for filing your tax return electronically and therefore it must be submitted soon. 

With the current rate of inflation impacting Canadians it is worth taking a little extra time to apply for additional credits and deductions, even though considering these can make the process of filing your taxes more complicated and confusing. 

The Government of Canada’s income tax page on their website and tax experts such as Intuit TurboTax provide some important considerations for seniors or retirees when filing. They explain that there are plenty of tax credits that you might qualify for, depending on your tax situation. 

Medical expenses are often a major part of people’s spending as they continue to age. Costs that you have not been reimbursed for can be claimed as expenses. 

Some examples of expenses that you can claim are prescription costs, assisted living devices like Continuous Positive Airway Pressure (CPAP), ventilators, or hearing aids, ambulance services and even some doctor visits. Also bathroom aids like grab bars and rails, can be claimed. 

Cosmetic procedures such as liposuction, hair replacement procedures, filler injections for removing wrinkles, or teeth whitening are not eligible expenses. Athletic or fitness club fees are not eligible either to be claimed as medical expenses. 

The CRA has a full list of medical costs that are deductible on their claiming deductions, credits and expenses page. You may need to show proof for expenses that you claim, but not always. It is a good practice to hold onto the receipts and statements after you file for your return. 

If you have a pension income you can also claim up to $2,000 as a credit when filing. Income that you received as a pension, an RRSP, or payments from splitting your spouse’s pension are all eligible to claim. 

In addition to these is the Disability Tax Credit, which allows anyone over 65 years of age and has a disability to apply for it. The credit is intended to reduce costs associated with disability expenses. The maximum disability is up to $8,870.

The Home Accessibility Tax Credit is there for you if you have made improvements to your home for accessibility. This is a non-refundable credit where you can claim up to $10,000 in home improvement expenses that went towards making your home more accessible.

Examples of accessibility home improvements can include widening doorways, adding wheelchair ramps, or installing stair lifts among others. It is important to note that this tax credit does not only apply to people that are 65 and older, but includes relatives that improved their home to support a senior living at the residence. 

The Old Age Security Pension (OAS) allows people to receive  financial help throughout retirement. If your income exceeds $81,761 you might need to repay some OAS back to the government: a process known as OAS Pension Recovery Tax, or more colloquially known as “OAS clawback”. 

You do have some options and strategies to reduce the amount you have to pay back such as splitting pension with your spouse, using a Tax Free Savings Account which can generate income that is not taxed, and trying to avoid capital gains before reaching the age of retirement. 

There are specific pages that can help you through this process, such as a TurboTax page: “Old Age Security (OAS) Clawback and Strategies to Help Reduce It” dedicated to providing information on the topic. 

There are also some free tax clinics that may be able to do your taxes for you if you have a modest income and a more simple tax situation. There is the Seniors Centre Tax Clinic in Penticton that offers this in person and virtual service. For more information contact Brigid Kemp at 250-493-2111.