Don’t pay more taxes than absolutely necessary by taking advantage of all the federal tax credits available to you -- including a number of tax relief measures introduced recently that you should know about.

Tax credits

• Basic personal tax credit – raised to $9,600.

• Spousal/equivalent-to-spouse credit – for support of an eligible partner whose net income was less than $9,600.

• Eligible dependent credit – for support of an eligible dependant whose net income was less than $9,600.

• Caregiver credit – up to $4,019 for care to an infirm or elderly relative in your home.

• Age credit – available to those over age 65 on a reducing basis up to an income level of $65,499. Transfer the unused portion to a supporting spouse.

• Medical expenses credit – combine family expenses on the return of the lower-income spouse to generate a larger credit; or maximize this credit by choosing any 12-month period ending in the current taxation year for previously unclaimed expenses.

• Disability credit – available to those suffering from a significant physical or mental impairment. Can transfer the unused portion to a supporting relative.

• Tuition fees and education costs – unused credits can be transferred to a supporting parent or grandparent (to a maximum of $5,000).  Remember that all scholarship or bursary income received by a post-secondary student is now tax-free.

• Textbook credit – fulltime students can claim $65 for each month of post-secondary enrolment; part-time students can claim $20 per month.

• Children’s fitness credit – claim up to $500 per child against eligible fees for a physical activity program.

• Public transit credit – claim the costs of certain public transit passes and electronic payment cards. [up to a maximum of what?]

• Pension income credit – claim up to$2,000.

• Universal child care benefit -- $100 per month for each child under 6 years of age;  income is taxed to the lower-income spouse

Other tax-reducing strategies

• Company pension-plan contributions – your 2007 contributions may be deductible within limits.

• Child-care – claim babysitting and other child-care expenses that allow you or your spouse to work or take a training course. Must be claimed by the lower-earning spouse.

• Canada Pension Plan and Employment Insurance contributions.

• Pension income splitting – you may be able to allocate up to half your qualified pension income to a lower-income spouse.

• Dividend credit – for eligible dividends from public companies.

• Charitable donation credit – claim previously unclaimed donations for a five-year period and pool contributions with your spouse to increase the amount that qualifies for a higher credit.

Trim your taxes by taking advantage of all your eligible credits and deductions (such as those allowed for Registered Retirement Savings Plan contributions). Talk to your professional advisor before you file your return.

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 Terry Doran is a Financial Consultant with The Investors Group Financial Services Inc. For questions or advice on any of his articles or questions in general he can be contacted by calling (519) 336-4262 or by email terry.doran@investorsgroup.com.