Global tax and advisory firm Ernst & Young offers 12 practical tips to help your clients save thier money this tax season.

1. Rewarding renovations

If your clients undertook any home renovations, remember the one-time home renovation tax credit. Projects undertaken between January 27, 2009, and January 31, 2010, are eligible for the credit, up to a maximum of $1,350.

2. Home, sweet home

Canadians who bought their first home after January 27,
2009, are entitled to a $750 credit.

3. Turn losses into gains.

Capital losses can be applied against capital gains. Investors’ net capital losses for 2009 can be carried back three years and applied to net gains in any year from 2006 to 2008. If your clients incurred business investment losses, they can claim them against any income in the year, not just capital gains. And if they have net capital losses from prior years, they can apply them to reduce taxable capital gains realized in 2009.

4. Share the love… and your income

For clients who received eligible pension income in 2009, up to 50% can be reported in their spouse’s or common-law partner’s tax return.

5. Helping others pays off

Clients who gave to charity in 2009 need to look into the federal tax credit for donations. This will help them decide if they should accumulate donations made over a few years or claim at once for the higher-rate credit. If they have donated stocks, bonds or mutual funds, additional tax benefits exist.

6. Sometimes less means more

Clients should claim all the family’s medical expenses in the lower-income spouse’s return. But remember — the individual who is making the claim should have sufficient income to absorb the entire credit. Dependent relatives’ expenses can sometimes be included.

7. Keeping it in the family

From child tax credits for children under 18 to an adoption expense credit or the child fitness credit — families family could be eligible for a host of tax reductions. Make sure to look into the possibilities.

8. Who’s the boss?

If self-employed, clients can claim a number of business-related expenses and reduce the tax they pay. Car and parking expenses, business association fees, convention costs and home office expenses, salaries paid to assistants including family members: the list is long. Exhaust all possibilities.

9. Check your files — twice

Some old receipts may still have value in tour clients’ 2009 tax returns. Receipts for charitable donations and medical expense receipts could be of particular interest.

10. Moving on up?

Canadians who moved in 2009 to start a new job, business or post-secondary education, may be able to claim certain expenses from the cost of moving to travel costs, including meals and lodging while en route.

11. Don’t forget the kids

Filing tax returns for children who had part-time jobs or have been paid for various small jobs (lawn care, babysitting) establishes contribution room for RRSPs (contributions can be made in any future year). Filing returns for older teens can also mean a refundable tax credit or GST credit.

12. Any carry-forward balances?

Client’s should check their prior year return and notice of assessment to see if they have any carry-forward balances that may be used as deductions or credits for 2009.

IE