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Adoption - Elgibility - What expenses can claim on your taxes. Lisa Patrick

For eligible adoptive families who have finalized their adoption, the federal adoption tax credit helps to offset some of the costs of adopting.

As a parent you can claim an amount for eligible adoption expenses related to the adoption of a child who is under 18 years of age. The maximum claim for each child is $11,128. You can claim these incurred expenses in the tax year that includes the end of the adoption period in respect of the child.

Canada Revenue Agency defines the adoption period as:

  • begins at the earlier of:
    • the time that the eligible child's adoption file is opened with a provincial or territorial ministry responsible for adoption (or with an adoption agency licensed by a provincial or territorial government); and
    • the time, if any, that an application related to the adoption is made to a Canadian court; and
  • ends at the later of:
    • the time an adoption order is issued by, or recognized by, a government in Canada in respect of that child; and
    • the time that the child first begins to reside permanently with you.

Expenses that can be claimed:

  • fees paid to an adoption agency licensed by a provincial or territorial government (an "adoption agency");
  • court costs and legal and administrative expenses related to an adoption order in respect of the child;
  • reasonable and necessary travel and living expenses of the child and the adoptive parents;
  • document translation fees;
  • mandatory fees paid to a foreign institution;
  • mandatory expenses paid in respect of the immigration of that child; and
  • any other reasonable expenses related to the adoption that are required by a provincial or territorial government or an adoption agency.

C2online provides several tools to assist you with your needs to keep all your claims organized to ensure that you maximize on your tax deduction. 

If you are unsure how to claim any of the above expense please contact us so we may assist you.

Have you considered these tax strategies?? Lisa Patrick

When you are looking for a strategy regarding your personal and corporate income taxes these are some things you may want to consider:

1.      Have your company buy you your RRSPs?   Money taken and deducted on your personal income would mean no tax consequence to you personally.

2.      Have your company pay your children’s tuition for college or university or trade school?   Tax on the Money can be avoided to the children in the event they do not attend the educational program for that year.

3.      Have your company pay you rent to use your personal items and less wages?   This will avoid CPP premium cost.

4.      Have you considered talking to your tax accountant before your company year end?

It is never too late to explore a possibility but take advantage of them this year!

 Call your accountant or contact us to learn more about income tax deductions and corporate tax strategies.

Darlene Lafond R.P.A.

Claiming Interest Expense on Your Taxes - What to do? Lisa Patrick

You must keep the initial loan documents and any renewals in order to claim them as expenses on your income tax.  According to CRA, the bill of sale or paper work showing purchase, any document used to distribute the proceeds like a cheque or money order, any interest statement that reflects the annual interest paid must be kept as well.

The Documents must reflect the name of the person or company claiming the interest expense.  Note: If not - try getting a sub agreement indicating the initial named person did borrow the funds for you or your business.

Keep all the documents including the annual interest statement for 7 years after the loan is paid off.  Please store the documents safe from fire, flood, etc.

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