Income Tax Tips: SAVINGS FOR SENIORS | March 9, 2022
Here is a list of some tax benefits you can claim:
Home Accessibility Tax Credit: Seniors and persons with disabilities who are eligible for the Disability Tax Credit can qualify for tax relief of 15% on up to $10,000 in eligible expenses. To be eligible, expenses must be incurred in relation to a renovation allowing for better mobility and functionality or reducing the risk of harm.
Doubling the Pension Income Amount: Years ago, a non-refundable pension income credit was introduced to apply to the first $1,000 of eligible pension income. A lot has changed since then, which is why the previous Conservative government increased the maximum amount of eligible pension income that can be claimed to $2,000.
Increasing the Age Amount: The Age Amount allows seniors to claim up to $7,637 on their 2021 tax return, depending on the individual’s net income.
Pension Income-Splitting: Generally, each individual Canadian pays taxes on their full income earned. Pension income-splitting allows any Canadian resident who receives qualifying pension income to allocate to their spouse (or common-law partner), with whom they reside, up to one-half of that income. By doing so, a pensioner and their family can dramatically reduce their tax load.
Increasing the Age Limit for Converting RRSPs to RRIFs: Registered Retirement Savings Plans (RRSPs) provides one of the best opportunities for Canadians to save for the future. Since RRSP contributions are not taxable below your RRSP deduction limit, they are an ideal way to plan for retirement. However, some Canadians have been restricted by the way RRSPs are structured. Even though they chose to work past 69 years of age, it was a requirement to convert their RRSP into a Registered Retirement Income Fund (RRIF) and begin making withdrawals.
The previous Conservative government increased the age limit for converting RRSPs to RRIFs from 69 to 71. Now, more Canadians have the freedom to choose when they convert their RRSPs.
