By Sarah Thomas
(NC)—Tax time is a time when Canadians are willing to try just about anything to legally reduce their tax bill. So before you collect up your receipts, here is some advice on what deductions you can and can't claim.
Cleo Hamel, a Senior Tax Analyst with H&R Block (hrblock.ca), has heard just about every possible reason to make a claim on a tax return.
"Maternity clothes are not considered a medical expense by Canada Revenue Agency and pets with people names cannot be claimed as dependents," says Hamel. "However, our tax system does allow you to challenge the guidelines if you believe you have a legitimate deduction that the CRA will not let you claim."
The tax courts can side with the taxpayer. For example, the court decided a farmer was allowed to claim cat and dog food because they were outdoor pets meant to keep wildlife away from their blueberries.
Many people incur expenses directly related to their job but unfortunately, most of these cannot be claimed against employment income. For the serviceman required to get a haircut every two weeks, it was still considered a personal expense.
"The Canada Employment Amount will give working Canadians a little credit for their jobs," explains Hamel. "If you had employment income in 2007, you will be able to claim the credit."
Hair transplants are considered a medical expense since it is generally considered to be beneficial to the patient's health.
"You can always ask if something is covered," says Hamel. "You may be surprised to find there are already guidelines on a deduction or credit. You can file a Notice of Objection if a deduction is declined. If that fails, you can appeal to the Tax Court."
More information is available online or toll-free at 1-800-HRBLOCK.
- News Canada
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