Tax season is back, and local accountants are seeing an influx of senior citizens eager to file their taxes.
However, according to David Jung, owner of Image Accounting in downtown Langley, some seniors make common mistakes that can backfire later.
“Sometimes we see seniors being the first out the gate to file taxes, or they reach out to me even before the tax season because they received their pension information slips in the mail,” said Jung.
“This is great, but also sometimes banks or other institutions that hold their investments have not filed their income slips in the system yet or sent the summary out in the mail, and this can cause issues later when it is submitted to the Canada Revenue Agency (CRA) and their taxes are reassessed automatically.”
Jung advised that the onus is on each individual to be aware of any and all income-generating activities throughout the year and to report them to the government.
“Canada uses self-reporting for tax filing, so it’s important to wait for all tax-relevant documents in the mail or email before bringing it to an accountant or tax professional,” he said.
Jung also pointed out some new tax credits and deductions that seniors should be aware of this year, including the “One-time top-up for Canada Housing Benefit.”
If eligible, seniors can receive a one-time payment of $500 to go towards their rent. To be eligible, individuals must be a resident of Canada and have made $20,000 or less in adjusted net income or $35,000 or less for families.
“Another deduction that is often overlooked is the joint election to split pension income,” added Jung.
“If you are getting pension income outside of Canada Pension Plan or Old Age Security, and are married or in a common-law relationship, you are eligible to split a portion of your pension income – to your benefit.”
Jung emphasized the importance of consulting a tax professional about splitting pension income, especially if there is a balance owing with previous tax returns.
Jung also addressed the process for seniors who have retired or are on a fixed income and the special considerations for those who have dependents or are caretakers of dependents.
To protect themselves from tax fraud and identity theft during the tax filing process, Jung advised seniors to be wary of texts or phone calls pretending to be from CRA.
“Most automated messages or texts can be assumed as scams or frauds, and if anyone is calling from CRA, it will be a real person,” said Jung, who is a resident of the Walnut Grove neighbourhood.
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“One safety precaution would be if you do receive a phone call from CRA, make sure not to give out your personal information. Ask which department they are from, and once you have that information, search online for that department and call back on the official number on the CRA website.”
For seniors who need help with their taxes, Jung noted that there are free tax clinics available throughout the Lower Mainland, including The Salvation Army’s Gateway of Hope, plus S and N Tax Clinic in Langley.
These clinics can be found by searching “Free Tax Clinic Canada” on Google or visiting the Canada Revenue Agency’s website.
Jung’s final tip for seniors, ahead of tax season, is to keep all medical receipts handy or to ask their pharmacy for an annual summary of their prescription bills.
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