Reinhard: Tax saving tips for seniors

With the rising cost of living every time we turn around, my major concern in writing this column will always be to create awareness for seniors. It’s still early in 2019, so let’s look at available options for seniors to save on their income tax and possibly even maximize the refund.

Denise Aiken, CPA, CGA of Aiken & Associates located in Parksville, says “a bit of planning and a discussion with an accountant can save a senior anywhere from a few hundred to thousands of dollars. Make sure you are aware of all the allowable tax benefits.”

First, your medical expenses are deductible. This not only includes your portion of prescriptions paid but also medical supplies such as hearing aids, dental expenses including dentures and other items such as walkers, canes and wheelchairs.

As well, travel is deductible if you must seek medical treatment more than 40 kilometres from home.

Pension splitting is a true benefit for couples. This will often drop the income to a lower tax bracket and will save you the marginal tax rate.

The beauty of having RRSPs (Registered Retirement Savings Plan) in your back pocket can be a gift to yourself in your later years when they are turned into a RIF (Retirement Income Fund). You can then draw from these funds on a monthly basis when your income is low, and your expenses are higher than you ever expected.

If you are not retired yet, speak to a professional. RRSPs can be utilized to average your income over the final years you work, again saving you tax by lowering your income to a level with a lower tax rate. Talk to your accountant for more information on how RRSPs could benefit your unique circumstance.

If you are not collecting a private pension when you turn 65 consider starting a RIF. Seniors receive up to an extra $2,000 tax credit for having a private pension plan income and a RIF is considered a private pension plan. RIFs can also be used in pension splitting.

Often seniors become disabled. There is a Disability Tax Credit (a non-refundable tax credit) that can be utilized by the senior or their spouse if the senior’s income isn’t high enough. This tax credit must be applied for.

If you are caring for a dependant that is disabled, you may also be able to utilize the Caregiver Tax credit (a non-refundable tax credit).

Tax savings are worth investigating, so talk to an accountant or other tax professional to see what areas might benefit you. If you would like to talk to Aiken, give her a call at 250-586-5886.

Karla Reinhard lives in Qualicum Beach, where she explores seniors’ issues and personalities in the area. For story tips or questions, she can be reached at

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