Things you need to know when filing taxes in 2022

Alan Rowell from The Accounting Place was back with everything you need to know to file your taxes this year. Last time he was on we ran out of time and didn’t get to talk about Ontario’s ‘staycation’ tax credit, so today he delved into what is it and how it works.

Rowell says Ontarians are looking to travel after a couple years of restrictions. The province’s travel and hospitality industries have also taken a huge reduction in business, so the Ontario government is offering a 2022 tax credit to help pay for Ontarian’s vacations.

Ontario taxpayers who vacation in Ontario will receive a 20 per cent refundable tax credit on eligible expenses up to $1,000 for an individual or $2,000 for a family.

Rowell says the qualifications require receipts and the expense be for accommodations where HST have been charged and paid. This means that the occasional rental of a friend’s cottage may not qualify.

Medical Expenses

Rowell says medical expenses such as prescriptions, dental and optometrist expenses do create a tax credit, but the total amounts are subject to a “deductible” of 3 per cent of net income.

He says, assuming an individual had dental bills of $2,000 and a net income of $40,000, three per cent of their net income would be $1,200 and would become that “deductible” amount. This would then leave an $800 tax credit to claim on their return.

Rowell then explained is the individual was married and the spouse a net income of $30,000, then this spouse would make the claim and the deductible would be 3 per cent of $30,000 and the remaining credit would be $1,100.

In general, the spouse with the lower income would make the claim for the family unit.

Rowell says the list of other related tax credits could go on and on. He says many people are unaware, or don’t realize they may qualify for some.

For example, the Disability Tax Credit is $8,662 and is more of a “Restricted Quality of Life” credit. There is also a “Refundable Medical Expense Supplement” which is a credit of up to $1,285 or 25 per cent of eligible expenses for taxpayers with employment income less than $28,446.

Other tax credits include Attendant Care Expenses such as Nursing Homes and Caregiver Credits, Disability Supports Deduction allows for a deduction up to the amount of earned income or $15,000, Home Accessibility Tax Credit of up to $10,000 allows individuals aged 65 and over to renovate their home allowing them to live there longer as opposed to moving.