Slideshow: Help clients avoid these common tax return errors

If a client, or their spouse or dependant, received medical care in the past year, the client can claim those expenses on their tax return. “If you have a case where it’s a couple with children, the parent with the lower net income can claim the medical expenses to receive the highest income tax benefit,” says Gittens. Medical expenses include more than just prescriptions, she adds. They include medical supplies, walking aids, and tests and vaccines that have been paid for.

Clients can now use a Canadian caregiver credit if they taking care of a relative with a physical or mental illness in their own home. “The credit is worth about $8,000 and its one credit that has combined three previous credits [the caregiver credit, the family caregiver credit, and the credit for infirm dependants age 18 or older], Gittens says.

Revenue Canada has become more stringent on self-employed Canadians claiming credits on their return. “Revenue Canada has stated that there must be a reasonable expectation of profit. They want to make sure that it’s a viable businesses and that expenses are related to that business and that business alone,” Gittens says. The government is making a clear distinction between those who are self-employed and those who have an employer but are working from home, she adds.

The principal residence exemption allows citizens to sell their home and not pay tax on any gain from the sale. Until last year, Canadians didn’t have to report any information regarding a sale of property. This year, however, clients should report the sale of a principal residence to their capital gains summary in their return, says Carroll. “If [clients] don’t do this and it comes to light, they could face some penalty charges for late filing and, in the worse case scenario, end up with some denial of their principal residence exemption,” he adds.

The biggest tip Gittens has for financial advisors is that they should remind their clients about the benefits of RRSPs around tax time. “When it comes to taxes, an RRSP is one of the safest and surest mechanisms to create a tax refund,” she adds. H&R Block recently conducted a study, she says, that revealed only 47% of Canadians are contributing to an RRSP or TFSA. The overall value of an RRSP and how it impacts taxes should be clearly communicated, she adds.