You might be wondering why Milestone Health, a company that provides caring and affordable services for seniors is blogging about taxes today but the truth is, seniors have a lot to consider when springtime comes and one of those things is taxes. Whether we like it or not, the arrival of spring also typically signals the arrival of tax season and for seniors – that can sometimes be a good thing. Here’s why:
What’s So Good About Taxes Anyway?
- The short view is no one likes paying taxes but the longer view? In Canada, our taxes cover a great many of our healthcare-related expenses. As we blogged about recently, it may even allow you to claim some of your expenses related to health care services like ours. Family Managed Home Care is something you or your loved ones can look into in order to determine if you might qualify and what kinds of services qualify. You may then want to speak to your regular financial advisor or a qualified tax service provider to then find out how these programs may benefit you from a tax perspective.
- Help for seniors might be available to you for free. For those with a modest income and/or a relatively straightforward “simple” tax return, the CRA can point you in the direction of qualified volunteers who will do your tax returns for free. You can access this list here: canada.ca/taxes-help.
More Good News, including Credits and Tax Assistance.
As a senior, there have to be some benefits to aging other than enjoying the sound of grandchildren’s laughter or not having to get up to go to work each morning! Now there are, including these possible credits, deductions and benefits you may be eligible to claim:
- Goods and Services Tax Credit
- Disability Tax Credit
- Medical Expense Tax Credit
- Canada Caregiver Tax Credit
- Age Credit
- Home Accessibility Credit
- Pension Income Credit
The CRA offers a great deal of information on their website and we would encourage you to visit them directly for detailed descriptions of each of these credits and whether or not they may apply to you or a loved one. You may also want to look into pension income splitting if you and your partner or spouse live together and ask about the guaranteed income supplement too. Visit here to find out more: https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2021/seniors-tips-help-tax-season.html
What Else Should You Be Asking?
- Depending on your age, there are some other questions you should be asking in spring (and we’re not just talking about when you can expect to see tulips and daffodils bloom!) The Canadian government has defined a senior as anyone aged 65 or more. At this age, you become eligible for OAS or Old Age Security and you can begin collecting OAS as a source of income. However, if you are still working you can elect to defer this until a later date and under some circumstances, between the ages of 60-64 you may be eligible for other sources of income that while modest, may be of assistance. Rules around the start point and collection of OAS are changing in the future (2023 will see a phased-in approach to these changes) so if you think this might impact you, consider making changes now before the changes impact you in 2023.
- RRIF’s are another source of income that will have a direct impact on your taxes, particularly if you do NOT withdraw the minimum eligible amounts in a given year.
- RRSP’S, if you are aged 71 or older, are no longer your friend. You are required, at age 71, to transfer any remaining RRSP’s you may have in to an RRIF or an annuity. If this is you this year – make an appointment at your financial institution or your adviser before the end of tax season, April 30th, 2021!
Milestone Health is the expert at providing a variety of care related services for seniors. If you or a loved one needs support, whether that’s a helping hand with bathing and dressing, wound care, companion visits or physical therapy, we can help. If you need tax advice – we suggest you go to the tax or finance professionals who, like us, are experts in their field. However, we know that with the arrival of spring, taxes are on everyone’s mind and wanted to provide readers with this “highlight reel” of related programs, credits or deductions (many of which are health related) so that you could plan ahead for an informed conversation with your personal financial caretaker! When you feel calm and relaxed about your taxes, you’ll be able to focus on finding those spring flowers and enjoying the great outdoors – possibly with a little help from your friends here at Milestone Health.