What's with these tax credits for seniors?

[carverman]

Ok..what is going on with these "supposed" tax credits for seniors.

Being squeezed at both ends this year (pension reduction and everything going up..hydro/heating/insurances etc..
I am finally (because of my age), able to try and take advantage of Mr McGinty's tax credit for seniors...
energy tax credit, and property tax credit...that he is claiming, is available to seniors for 2010 and onwards.

but according to the 2010 tax forms..I only qualify for the energy credit IF I live on a Reservation or in a student housing....WTF? What kind of senior tax credit is that? How does this apply equally to all seniors? Are we lesser seniors because we don't
live in Northern Ontario on reservations or in Student Housing?

Now the property tax credit...I fill out the forms with the property tax I paid last year on line 18 of the form ON479

then I am instructed by this form...line 18 minus line 19, if negative, then enter "0"...

BUT the amount on line 19 IS THE SAME AS LINE 18, carried forward from the previous (reverse side) of this form..

Look Mr. McGinty, if you are going to squeeze my head some more,
then don't go telling me that you are giving all these extra credits for seniors because of the HST...
and you "feel sorry for us being caught in the squeeze"....these forms make as much sense as the hot air going around these days in the election campaign!

and....you won't be getting my vote in the next provincial election!

[kcowan]

There is nothing like completing the tax form by yourself to make your realize what are the governments real priorities (behind the rhetoric)!

[stardancer]

Ok..what is going on with these "supposed" tax credits for seniors.

Being squeezed at both ends this year (pension reduction and everything going up..hydro/heating/insurances etc..
I am finally (because of my age), able to try and take advantage of Mr McGinty's tax credit for seniors...
energy tax credit, and property tax credit...that he is claiming, is available to seniors for 2010 and onwards.

but according to the 2010 tax forms..I only qualify for the energy credit IF I live on a Reservation or in a student housing....WTF? What kind of senior tax credit is that? How does this apply equally to all seniors? Are we lesser seniors because we don't
live in Northern Ontario on reservations or in Student Housing?

No, the energy credit is for everyone; special circumstances apply if you live on a reserve or in student housing or in long-term care.

Now the property tax credit...I fill out the forms with the property tax I paid last year on line 18 of the form ON479

Line 18 is the amount of the senior homeowner's property tax grant you received in the mail or direct deposit about 8 weeks after last year's tax filing, anywhere $0 to $500 max depending on income

then I am instructed by this form...line 18 minus line 19, if negative, then enter "0"...

BUT the amount on line 19 IS THE SAME AS LINE 18, carried forward from the previous (reverse side) of this form..


The whole Ontario credit system is changing and is very confusing, even for me- a tax preparer. This is a transition year and next year will be completely different.

Make sure you complete and attach an ON-BEN form. Instead of getting your Ontario credit on your tax return next year, it will be mailed or dd to you 4 times a year, and this form is the application for all the Ontario credits.

It's too confusing to help over the net; the only thing I can suggest is to have someone look it over to make sure you didn't miss anything.

[carverman]

The whole Ontario credit system is changing and is very confusing, even for me- a tax preparer. This is a transition year and next year will be completely different.

Well I hope so. The 2010 ON tax credit form is very confusing and for anyone that has done their own returns for many many years..seems to be poorly designed and not well explained in some places.

The tax guide booklet supplied by CRA doesn't seem to explain all the variations or reasons for qualification like it should..so obviously these forms ....ONBEN and ON479 were added at the "last minute", without too much thought about providing a proper guide with them.



Make sure you complete and attach an ON-BEN form. Instead of getting your Ontario credit on your tax return next year, it will be mailed or dd to you 4 times a year, and this form is the application for all the Ontario credits.


Yes, I did. This one seems to be straightforward, unlike the ON479 with all of these inclusions/exclusions and exceptions which
must have been written by lawyers?



It's too confusing to help over the net; the only thing I can suggest is to have someone look it over to make sure you didn't miss anything.

Well, I don't think I did. I typed up a letter to CRA indicating the lines on the ON479 form where things are not exactly clear.

I realize that this is for the property tax credit for property taxes I paid last year in 2010 , and as you say, it was a transistion year with the HST coming in mid year.. but thay had at least 6 months before the tax forms came out to test it out.

I wonder if anyone actually does a test scenario to fill out the forms to make sure everything jives as it should.
IMO the ON479 is a very clumsy form..and there is room for improvement for next year.

[carverman]

The whole Ontario credit system is changing and is very confusing, even for me- a tax preparer. This is a transition year and next year will be completely different.
No, the energy credit is for everyone; special circumstances apply if you live on a reserve or in student housing or in long-term care.


Not according to the form. (See Energy Component portion on form ON479)

Long term care home..enter the amount...
\
Home energy costs on a reserve..enter the amount...

add lines blah-blah-blah..

No where in this part of the form does it say..Homeowners energy

Therefore the form is flawed..because as a senior, the form excludes me form
entering my energy component costs.

At least the property tax component.. well up to line 18 seems to be
valid and I qualify for that.. but then if you go to UNDER 65 YEARS OF AGE
AND 65 YEARS OF AGE OR OLDER..it goes through this stupid number
crunching formula.."if negative"..enter )..so obviously Mr. McGinty
doesn't want to pay out any tax credits if he can help it.

BTW..I did NOT receive any 2010 Ontario Seniors Property tax grant..
this is the first that I have heard of it..and on this form...very convenient
Mr. McGinty..to let us know after 2010!

[carverman]

The whole Ontario credit system is changing and is very confusing, even for me- a tax preparer. This is a transition year and next year will be completely different.

Line 18 is the amount of the senior homeowner's property tax grant you received in the mail or direct deposit about 8 weeks after last year's tax filing, anywhere $0 to $500 max depending on income

Oh was I supposed to get a check in the mail last year?...Didn't see any
checks (other than the customary $100 HST "rebate" from Mr. McGinty.

I guess he must have forgot about my property tax credit!:rolleyes:

[HaroldCrump]

This just proves the point that warp keeps making about how complicated and insane our tax system is.
I think it is deliberately kept this way so that most people are not able to claim the credits that are due to them.
Unfortunately, we are heading deeper and deeper along the same direction with more and more targeted tax credits both at the federal and provincial levels.
There are so many credits based on whether you are married, how many kids you have, what your income is, where you live, what car you drive, whether you drive or take transit, whether your kids are taking dance lessons or hockey lessons, etc.

[carverman]

This just proves the point that warp keeps making about how complicated and insane our tax system is.
I think it is deliberately kept this way so that most people are not able to claim the credits that are due to them.


Well maybe..especially if you are used to doing your own taxes..like I always have done..frugality being the main factor here.
I hate to pay someone $50 or more to do simple taxes where I only have the basic credits anyway..at least up to this year until
I turned 65...no wonder there are so many seniors living in poverty..they are getting ripped off by ALL levels of gov't! :(


[QUOTE]
Unfortunately, we are heading deeper and deeper along the same direction with more and more targeted tax credits both at the federal and provincial levels.

Because it's easy to thrown in some more targetted tax credits, and try to tell people that the gov't is really concerned about families struggling to raise kids or seniors at the near poverty (or even below poverty level).

All they have to do is offer another tax credit of say $300 "for something" and then have you include that $300 tax credit in the number crunching formulae that they dream up to minimize how much of the REAL tax rebate you get back...

in my case, (being almost at poverty level of 20K these days)...I'm in the lowest tax bracket..

so if I take $300 x 20% (15% fed + 5.05% prov), I only get $60 of that
tax credit applied against my taxes payable... and they get to keep the rest..which is the major part of the tax credit!

its all smoke and mirrors... so they can justify the expeditures for jets, jails and corporate tax cuts..on the backs of those that are just making ends meet..

and guess what?.... I heard somewhere that McGinty gov't is/was thinking of raising the HST another 2%...now that we have it shoved down our throats..its so easy for them to legislate another increase in future years!

[stardancer]

Oh was I supposed to get a check in the mail last year?...Didn't see any
checks (other than the customary $100 HST "rebate" from Mr. McGinty.

I guess he must have forgot about my property tax credit!:rolleyes:

Nor did I get one; it gets phased out depending on your other income.

[HaroldCrump]

and guess what?.... I heard somewhere that McGinty gov't is/was
thinking of raising the HST another 2%...now that we have it shoved down
our throats..its easy for them to legislate another increase in future years!If his past behavior is any indication, he will wait to get re-elected and then do it

[carverman]

If his past behavior is any indication, he will wait to get re-elected and then do it

Well if the Federal gov't gets a changeover, what do you bet that he will be "in like flint" with Mr Inagtieff.
Since the HST and personal taxes are the biggest cash cow for the province, expect some creative work in those areas.

With the choices we have in Ont, I can't see any change for the better over the horizon...the other parties don't have a platform
as of yet, that will define how they plan to run the province more responsibly and get us out of debt, so it's (probably) more of the same after next year.

To reduce the deficit...how many billion is it going to be by end of 2012?..
http://www.fin.gov.on.ca/en/budget/ontariobudgets/2010/ch2a.html

"The government has a responsible plan to cut the deficit in half in five years and eliminate it in eight years."
Umm..and where is that money to reduce and eliminate the deficit going to
come from?....can Mr. McGinty spin straw into gold?....not likely..so
Mr & Mrs taxpayer..expect more creative tax ways for those dollars to leave
our pockets ...

[warp]

This just proves the point that warp keeps making about how complicated and insane our tax system is.
I think it is deliberately kept this way so that most people are not able to claim the credits that are due to them.
Unfortunately, we are heading deeper and deeper along the same direction with more and more targeted tax credits both at the federal and provincial levels.
There are so many credits based on whether you are married, how many kids you have, what your income is, where you live, what car you drive, whether you drive or take transit, whether your kids are taking dance lessons or hockey lessons, etc.


Thanks for the shout -out Harold.

I have been ranting for years about how complicted and ridiculous our tax system is.

And for years it just keeps getting more and more insane, with forms that are near impossible for regular taxpayers to read and understand.

Way should ANY taxpayer have to pay someone to prepare their taxes for them? If it is a leagl requirement to do so, then it stands to reason that it should be a relatively easy thing to understand and to do.
We know this is not the case.

I have asked my lawyer if we could take "the government" to court and argue this as an excuse to relieve ourselves of the royal pain in the *ss it is to comply with tax law. Then we both have a good laugh.

[andrewf]

Any substantiation to that rumour about McGuinty and the HST? I hadn't heard anything, and on the face of it, it seems unlikely. If I'm not mistaken, the terms of the deal the province got to adopt the HST (courtesy of the federal Tories) was that the rate of the HST should remain fixed for five years.

As for why we have all these credits for old people, it's pretty simple. They vote.

[carverman]

Any substantiation to that rumour about McGuinty and the HST? I hadn't heard anything, and on the face of it, it seems unlikely. If I'm not mistaken, the terms of the deal the province got to adopt the HST (courtesy of the federal Tories) was that the rate of the HST should remain fixed for five years.

Good..I'm sort of relieved..I just heard it as a rumour somewhere online.
I'll try to find that article and post it.

Harper cut the GST by 2% as part of his election promises..but then the recession hit and all the car company bailouts
and now..we are deeply in deficit..and that 2% HST hike would make the balancing occur much faster, that may be occuring in Less Than 5 years..
IF a new (Liberal Fed gov't gets elected, and they decide to raise the GST by 1% each year, back to
7%, to pay for health care transfers and other social programs).
Ontario will have no choice in this matter if that comes about.

Here's the jist of it..
http://www.vancouver-real-estate-direct.com/HST/BCvsOntario.html
<quote>
The Ontario Government never made an election promise regarding the harmonized tax. On the contrary, they told the public that they were determining the best coarse of action regarding the combined tax. The BC Liberal Government broke their election promise not to implement a harmonized tax and not to increase taxes. <endquote.



As for why we have all these credits for old people, it's pretty simple. They vote.
yes, other than sit on our proverbial asses and collect gov't checks ;)

[HaroldCrump]

Thanks caverman for reminding us about the bailouts.
We seem to have forgotten about that in the govt. spending related discussions that have been going on here recently.
That is tax payer money that we can kiss adios, dosvidaniya, auf Wiedersehen to.
We'll never recover a dime of it.
It went primarily in securing unionized jobs, fat bonuses for the auto execs and big loss write offs for the auto companies against future profits.
Just one of many ways tax payer money has been blown away.
This one is slightly debatable since it helped secure some jobs (here in Ontario, esp.) however the tax payers got a raw deal.
The govt. did not win any concessions whatsoever from either the unions or the corporation.
This year, GM was allowed to write off past losses against this year's profit - all paid for by the tax payer.
And of course the execs got big fat bonuses.

[carverman]

This one is slightly debatable since it helped secure some jobs (here in Ontario, esp.) however the tax payers got a raw deal.
The govt. did not win any concessions whatsoever from either the unions or the corporation.
This year, GM was allowed to write off past losses against this year's profit - all paid for by the tax payer.
And of course the execs got big fat bonuses.

Well the gov't giveth and the gov't taketh away..and that's what keeps the economy (of Ontario) going.

Basically, the McGinty gov't didn't have any options..if they hadn't done the bailout of GM & Chrysler and any other
US subsidaries affected severely by the recession, those companies would have high tailed it back to the US and Ontario would have been left with mothballed plants, and a lot of unemployed workers/pensioners holding the bag.

Electrolux took the corporate tax breaks and maybe bailout too and still hightailed it back over the border because the
economic situation was still favorable to them there in spite of tax concessions here in Ont.
(i'm having a warranty issue with door seals on my energy efficient Frigidaire fridge..which is a subsiduary of Electrolux
as I just found out..so it's not just vacumn cleaners that we have to import..maybe most of our appliances as well now,
that were probably still made here..at least for our own consumption)

..anyway...

As we all know, workers on the dole, pay very little taxes and areas that those companies are located in, go into a mini recession themselves because it ripples down the chain as they say, into the local economies..hair salons, pizza parlors, ma & pa corner
stores, etc.

There will always be political issues to spend taxpayer dollars on, wisely or maybe not so. Gov't sometimes are pressure by public opinion..and in an election year, by the voters to do something..even if it turns out not to be such a good decision in future years.

McGinty seeing Ontario go deep into the red, struck a deal with the Feds, to get more Fed money into the coffers by going with harmonization..something that previous prov gov'ts said they would not do...but times and economic situations change and
now most provinces except Alberta, Sask and Mantoba are now HST..because they are in deficit..so when that happens
you sign up with the "devil you know".

And if you remember a few years back, Mr.McGinty was quite adamant during his first election campaign......
"read my lips..no new taxes"..I still remember him saying that on TV.

..and then we got the OHIP tax...but ok, that one affects us all and health care is costing more and more each year..,,
and as a pensioner, I don't mind paying my fair share of the health care..because I've had to use it on a monthly basis.

and then the HST which applies to fossil fuels and just about anything else except property (only 8% prov..so far...( and auto insurance (0% so far..)..BUT...these are other " cash cows" that Ont by itself , can change later on...

and.... if Mr Ignatieff gets in..and finds out how much of a fiscal mess there really is , that has been hidden from the public/parliament, then we could see another tax action plan there as well..

Summarizing again..the gov't giveth (tax incentives) and the gov't taketh away (tax dollars)......
...and that's our tax dollars at work..as they claim.

[peterk]

I don't know if someone's mentioned it already, but there's an error in the forms Carverman. http://www.cra-arc.gc.ca/E/pbg/tf/5006-tc/

[I'm Howard]

I just pay the $50 and let someone do it.

Raise the GST, taht's O.K by me,. 90% of our purchases are done in the U.S, Senior's Discounts and 7% not 13%.

Vote with your feet.

[kcowan]

Just finished my Income Tax using the free version of Ufile. Aggregate tax rate is 20% for 2 seniors. Lot of capital gains in 2010! Filed my 1135 declaring foreign ownership just in case we decide to rent our condo out in the future.

Most of the work was calculating the capital gains on all the stock sales, an effort that cannot be done by a 3rd party. Corriente Resources was taken out for a gain of 277%. Still shopping for some early mining opportunities to replace it.

[carverman]

I don't know if someone's mentioned it already, but there's an error in the forms Carverman. http://www.cra-arc.gc.ca/E/pbg/tf/5006-tc/

Thanks Peterk. I thought so, because it just didn't make sense...so I calculated my "Senior's discount" property tax credit anyway based on
what I thought the form should read and sent in a letter to the CRA.
I use the T1 special forms because I have to send in proof of alimony payments to my remarried "succubus", and in the past, when I didn't..... they
just held up my refund, and demanded all sorts of documents... and to who I
was paying the " perpetual alimony" to..so I just send in all the documentation
with the forms.


Here's what I said in my letter enclosed with the tax return.....


RE: Calculations on ONTARIO FORM ON479

The instructions given on this form don’t appear to make any sense to me.

After calculating the amount of property tax component and putting it in
Line 18 (of this form) $294.51, I am then instructed:

“line 18 (284.51) minus line 19, if negative enter 0”
But the amount on line 19 is the same as the amount on line 18, as you just carry
forward the same amount from the previous page of this form.

Otherwise, why calculate at all ; see (IF UNDER 65 YEARS OF AGE….)
arriving at $216.22.

Now it does make more sense to subtract this calculated amount
(line 1 “amount” minus $20,000 x 2%) from line 19.

Ie: $284.51
Minus $216.22
--------------------------
$68. 29

This difference makes more sense in the Property Tax Credit, so I am claiming $68.29 as the correct amount, and entering it on line 479 on the T1 Special,
adding it as the credit to the income tax I have already paid.

[carverman]

I just pay the $50 and let someone do it.


That's not very frugal?....and you miss out on all the fun of filling out complicated forms and stupid number crunching formulas to arrive at
some percentage of tax deduction..it's all smoke and mirrors..and sometimes
they throw a little error into the forms to keep you on your toes..gotta love
the gov't...that's our tax dollars "at work"..if business ran their business the
way the gov't runs itself..most of the businesses in the country would be
in deficit and bankrupt...unless of course, we are talking about "the big boys",
the oil barons, the car companies..the ones that donate generously to the
re-election coffers of ..Mr Harper and company.



Raise the GST, that's O.K by me,. 90% of our purchases are done in the U.S, Senior's Discounts and 7% not 13%.

Vote with your feet.

Well from what I've heard and seen..it reminds me of the old saying..
"Two things you don't want to see made..sausages and the law (er..the liers
on parliament hill). It's enough to make a grown man cry..but..hey I will
take their money..CPP/OAS..because I've earned it..all those years of paying
taxes and taxes..and now..nothing to show for it..practically.

I gotta find me some gal that has a diamond mine...and is worth her weight
in gold! :D

[carverman]

Just finished my Income Tax using the free version of Ufile. Aggregate tax rate is 20% for 2 seniors. Lot of capital gains in 2010! Filed my 1135 declaring foreign ownership just in case we decide to rent our condo out in the future.

Most of the work was calculating the capital gains on all the stock sales, an effort that cannot be done by a 3rd party. Corriente Resources was taken out for a gain of 277%. Still shopping for some early mining opportunities to replace it.

Don't ya just hate those rich yuppies? :D

[warp]

I don't know if someone's mentioned it already, but there's an error in the forms Carverman. http://www.cra-arc.gc.ca/E/pbg/tf/5006-tc/

Thanks for the heads up about the error on the "Ontario Credits" form.

I actually caught this ridiculous error when doing my mom's taxes.

Just another example of govt screwing up as per usual.

I do wonder how many seniors will miss this, and miss out on credits they are supposed to get, and if "the government" will correct their returns and send them their credits.

[carverman]

Thanks for the heads up about the error on the "Ontario Credits" form.

I actually caught this ridiculous error when doing my mom's taxes.

Just another example of govt screwing up as per usual.

I do wonder how many seniors will miss this, and miss out on credits they are supposed to get, and if "the government" will correct their returns and send them their credits.

Ya gotta wonder if this was an intentional error? This way any senior that
still can do their own taxes..and that's very few of them..will come up with
"if negative ..then, you get zero $0" . Very convenient! How else do you think
the Conservatives..(actually the Alliance party in disguise)..can afford to pay
$75million for the F35 jet airframes..(no engines come with that, or complex
avionics/ or any weaponry)..after all, we are supposed to be "peacekeepers"!
Real cost projected to 15-20 years $110 million per copy x 65 jets = 7.15 Billion!
But wait!..there's more..it's just growing as I type...
check out the deficit counter....more taxes in the future anyone?
http://www.debtclock.ca/

Now that $75mil per jet x 65 jets is...BILLIONS!..that Mr Harper has to collect
from somewhere..lets see who still pays taxes in this country...

The rich don't pay because they can claim almost everything as "business expenses"
The poor don't pay because they are all mostly on welfare
The guys rotting in our super jails don't pay because they have no income
The guys in the military away from Canada get special tax concessions
The rich bankers don't pay because they OWN the banks and the gov't too.
The kids under 18 don't pay..
The people in mental instutions don't pay..
So that just leaves the seniors to pay (and pay)..

From the proposed budget the PC were trying to get us to eat....even though
they realized some of the seniors were below poverty level, and it was time
to increase the GIS (guaranteed income supplement for the poorest of the poor)..they just couldn't afford to give those seniors what the other parties
were proposing to try and pull most of them out of poverty. They were
just going to throw them a bone..actually not even a full bone.

Jets, Jails and corporate tax cuts come first!

[kcowan]

I just pay the $50 and let someone do it...I took over doing taxes for DW and MIL. In the case of DW, a bookkeeper kept track of things and then turned them over to an accounting firm for her business. I discovered many deductions that had not been taken by the professionals.

In the case of MIL, there was a capital loss for her bonds that they had not included. So I was able to claim a loss and carry it forward against future gains.

So yes you can leave it to someone else and hope they get it right!