Pattie Lovett-Reid

Chief Financial Commentator, CTV

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As tax season fast approaches, there are opportunities for seniors to save on the amount they have to pay the government. While getting older does come with some shopping and transportation discounts, according to Peky Tsang, a tax analyst at Turbo Tax Canada, there are opportunities to save on your tax that many seniors overlook.

"Age amount tax credits and pension income deductions can add up to some big savings come tax time," she says.  

I spoke to Turbo Tax looking to highlight a few of the key tax tips for seniors. 

Age amount: You are allowed to claim a credit if you were 65 or older at the end of the tax year. Your net income on your tax return must also be less than $82,353. The age amount you can claim depends on your income. If your income is less than $35,466 you would claim $7,033. If you earn more than $35,466 but less than $80,256 you would claim $6,854 minus 15 per cent of the amount by which your income exceeds $35,466. I'll give you an example, if your income is $50,000 your age amount would be $4853.

Pension income amount and pension income splitting:

As people get older and stop working, their income may be derived from a public or private pension plan. Currently, you may claim up to $2,000 in credit for the pension income amount if you have eligible pension income. Eligible income may include pension or annuity income you received as payments for a pension or superannuation plan or from payments you received from a RRSP.

If you earn a higher income than your spouse, your spouse may have a lower tax rate and transferring your eligible pension income to your spouse will decrease the overall tax your family pays. Currently, you can transfer up to 50 per cent of your eligible pension income.

Medical expenses:

Medical expenses are a big cost for anyone and as they age, the needs for medical care increases and the portion you pay adds up for medical costs. People are allowed to claim medical expenses that aren't reimbursed. However, the total of those expenses must exceed the lesser of 3 per cent of income or $2,237. Plus CRA allows seniors to claim a wide range of medical expenses, some obvious, but others, such as air conditioning, may not be. Home improvements that facilitate mobility and safety also qualify as medical expenses, and depending on your income level, can lower tay payable significantly.

Home accessibility tax xredit

If you are 65 or older, and you made changes to your home to improve your quality of life, you may be eligible for a non-refundable tax credit. This credit allows you to claim up to $10,000 in home improvement expenses. Of the expenses you claim, 15 per cent of them come back to you as a credit. Some of the expenses you can claim include: wheelchair ramps, walk-in bathtubs or wheel-in showers; widening of doors, non-slip bathroom flooring; ergonomic, easy to use, door locks, hands-free water taps and even motion sensor lights. Also, relatives who support a related senior may also be eligible for this credit.

CTV's Chief Financial Commentator Pattie Lovett-Reid offers a financial tip of the day during the month of February for Your Money Month.