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Can I get a tax deduction for eating gluten-free food?

If you suffer from celiac disease, you may be eligible to get a tax deduction for eating gluten-free food. Here is advice from a Toronto Chartered Accountant.

According to the Canadian Celiac Association, it is estimated that 1 in 133 persons in Canada are affected by celiac disease (gluten intolerance). Currently, there is no known cure for this disease, yet it can usually be effectively treated and controlled with “strict adherence to a gluten-free diet for life”. This requires knowledgeable dietetic counseling and frequent ‘updates’ as commercial food contents change.

Gluten-free products could be quite expensive and the Canada Revenue Agency (CRA) is aware of this. If you suffer from celiac disease, you may be eligible to claim the incremental costs related to purchasing gluten-free food as a medical expense.

What is the incremental cost? And how is it calculated?
The incremental cost is defined as the difference in the cost between gluten-free products compared to the cost of similar products containing gluten. It is simply calculated by subtracting the cost of a product with gluten from the cost of a gluten-free product.

For instance, if a gluten-free loaf of bread costs $5.50 and a loaf of whole wheat bread costs $3, you could write off $2.50 as a medical expense on your income tax return.

What if several people are sharing gluten-free products with me, yet I am the only one who has celiac disease?
According to the CRA, “if several people eat the product, only the costs related to the part of the product that is eaten by the person with celiac disease may be claimed as a medical expense.” For example, if you split your loaf of gluten-free bread with a friend or your spouse, you may only claim half of the expense or $1.

What documents do I require to support the claim?
The CRA states, “Do not send any supporting documents. Keep them in case we ask to see them later.”

You will need to keep all of the following:

  1. A letter from a medical practitioner that certifies that you have celiac disease and cannot eat gluten.
  2. Receipts for each gluten-free food product to backup all your claims.
  3. A summary of each food product that was bought during the 12-month period for which the expenses are being claimed.

What is an example of ‘a summary of each food product’?

Food product: Bread
Number of products bought (for the 12-month period): 52
Average cost of product with gluten: $3.49
Average cost of gluten-free product: $6.99
Incremental cost: $6.99 – $3.49 = 3. 50
Amount to claim: $3.50 x 52 = $182.00

This table is based on a sample provided by the CRA website.

Here is a celiac disease medical expense worksheet. It is intended to help you document your gluten-free purchases. It is beneficial to print several of these sheets off and keep a file with this worksheet and your receipts together. This worksheet was taken from the Canadian Celiac Association.
In summary:

  1. The incremental cost of gluten-free products is an eligible medical expense.
  2. Eligible products are generally marketed specifically to the gluten free diet.
  3. Other products can also be eligible if they are used by the person with celiac. disease to make gluten-free products for their own use. These include, but is not limited to, rice flour and gluten-free spices.
  4. The gluten free tax deduction is only eligible with a medical note with a diagnosis of celiac disease.
  5. A summary of each purchase of gluten free products must be kept on file.
  6. A receipt for each purchase must be kept on file as well.

Related: Eligible medical expenses you can claim on your tax return


About S & P Accounting Services

S & P Accounting Services is a professional accounting firm situated in North York, Ontario. We are chartered accountants with extensive experience with audit, review, tax and bookkeeping. We strive to operate in accordance with our principles of quality, professionalism, and integrity and are dedicated to excellent service.  We aim to ensure that our clients receive the highest quality of financial, tax and accounting services and advice. We happily serve clients in Toronto, North York, Mississauga, Vaughan, Richmond Hill and in other cities in the GTA.

If you have any questions or inquiries about our accounting services, please contact S & P Accounting Services.

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

 

Here are some FAQs about income tax returns

Here are answers to some commonly asked questions about income tax returns

1. What income do I need to report on my income tax return?

All income is taxable. You’ll need to report all income on your tax return (also known as Income Tax and Benefit Return) and calculate how much tax you owe.

Income that you must report to the CRA (Canada Revenue Agency) includes:

  • Part-time and self-generated income
  • Employment income earned both inside and outside of Canada
  • Income from rental property or renting out a section of your house
  • Investments (e.g. interest, dividends, capital gains)
  • Being self-employed (e.g. a home business)
  • Your pension
  • Income from more than one job

2. Do I qualify for tax credits and benefits?

You may qualify for the following:

  • Ontario Children’s Activity Tax Credit
  • Ontario Political Contribution Tax Credit
  • Healthy Homes Renovation Tax Credit
  • Ontario Trillium Benefit
  • Ontario Senior Homeowners’ Property Tax Grant
  • medical expenses, caregiver amounts, disability amounts, etc.

All you need to do is file a tax return and fill in three forms ON 479, ON-BEN and ON 428.

If you are submitting a paper tax return form, complete and mail the forms below when you mail your tax return.

Yet, if you are submitting your tax return online, the majority of accounting and tax return software will automatically ask you questions related to tax credits and benefits.

3. What if I have no income from last year, do I still file a tax return?

It’s important to file your taxes even if you have no earnings.

Even if you don’t have an income from the previous year, it’s beneficial to file your taxes because you may be eligible for various government benefits such as, the Ontario Trillium Benefit, the Ontario Child Benefit and Healthy Smiles Ontario.

However, please note two cases which it is mandatory to file an income tax return even though you have no earnings from the previous year: 1. if you owe taxes to the government and 2. if the CRA sent you a request in the mail to file your taxes.

4. Will I receive a refund?

The CRA will process your tax return and mail you a notice of assessment. If you qualify for a refund, you’ll get money back.

How much money you receive is contingent on a number of factors: your location, age, the size of your family, how much money you make and your expenses. Not everyone qualifies for a refund.

If you owe the CRA money, you will receive a letter in the mail stating that you need to pay by April 30. You can pay online, at your bank, or by mail with a cheque or money order.

5. From where do I get a tax return form?

To get a tax return form, you can either:

  • Download one from the CRA website
  • Visit your local post office or postal outlet
  • Visit a Service Canada office
  • Call 1-800-959-8281

The tax return forms are available at the above locations between February and early May.

6. Can I get help completing my tax return?

You may be eligible to get help from a free tax preparation clinic if you have a modest income and a simple tax situation. These tax clinics are offered through the Community Volunteer Income Tax.

Remember to bring your tax information slips and receipts such as old age security (OAS), employment insurance (EI) and Canada pension plan (CPP) tax slips. Volunteers will need them to prepare your income tax.

If you do not qualify for free tax services, you can get help from an accountant or a tax preparation company.

Our professional chartered accountants are committed to assisting you with your tax return and are highly qualified at finding the best tax credits and deductions that will maximize your refund from the government. Here is some more information about our professional accounting services. If you have any questions about tax returns or any accounting related inquiries, please contact S & P Accounting Services.

Here is an infographic which provides answers to some commonly asked questions about income tax returns. 

Income tax return FAQs

Income tax return infographic

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

How to budget wisely – top five tips from an accounting firm

S & P Accounting Services is an accounting firm situated in the Greater Toronto Area. A common question that our clients ask us is how could I budget wisely?

Overall, the top five tips that we recommend to our clients are:

1. Spend less than you earn. 

This is easier said than done, yet if you follow through with this, you could be well on your way to paying off debts, saving for your retirement, getting your hands on that next generation Macbook or buying that beautiful home you dreamed of.

2. Create a monthly budget and adhere to it.

In order to know how much money is coming in and out each month, it is essential to devise a budget. There are different smartphone apps that make it easy to track your expenditure such as, Mint.com, YNAB, or Freshbooks. Conversely, you could simply create a monthly budget on excel spreadsheet for free.

Creating a monthly budget could definitely be an eye opener for you.  It will allow you to see how much money you are spending on those sushi outings with friends or daily Starbucks fixes and may propel you to want to change your spending habits.

3. Pay with cash instead of credit cards.

A good way to reduce your spending is to pay your daily expenses with real cash instead of credit cards. Cash offers a real tangible experience. When you run out of cash in your wallet, you no longer have any more money to spend. “You see this and process it.” On the contrary, with credit cards, “it seems like it would be easier for someone to purchase more because a card, while tangible, does not represent actual money. It’s just a piece of plastic, and a shopper does not see the result of their expenditure for almost a month.”1


One well-documented study conducted by Dun & Bradstreet found that people spend 12-18% more when purchasing with credit cards instead of cash. McDonald’s reports that when customers purchase with credit cards, the average ticket is $7 as opposed to $4.50 with cash. Therefore, we advise that it is best to keep cash rather than credit cards in your wallet.2

4. Stick to your grocery list and brown bag your lunch.

Having a grocery list will save you money and time. Have you ever rushed to the grocery store two days in a row simply because you forgot that one important staple on your first trip to the grocery store?  Or have you ever gone to the grocery store wandering aimlessly through the aisles, with little knowledge of what you have in your pantry and fridge and ended up buying multiples of the same product?

Having a grocery list will remind you what you need to buy and will ensure that you are purchasing food you know you will eat. Unfortunately, people throw away too much money on food because they purchase it and never eat it, or it gets moldy or rotten. Purchasing food that you intend to consume because it’s on your grocery list will help minimize wasted food.

A good way to create a grocery list is to first create your meal plan for the week.  After completing your meal plan, write down the necessary ingredients on your grocery list. Make sure to take note of what you already have in your fridge and pantry in order to avoid buying duplicate items.

One meal planning app worth checking is Today’s Parent Mealtime. It could help you create a weekly meal plan from thousands of family-friendly recipes and then create a grocery list that you could email to family members so that you are all on board with what’s needed.

We also recommend that you brown bag your lunch. This will save you hundreds or even thousands of dollars per year and as an added bonus it is usually healthier to eat a homemade meal.

5. Don’t buy on impulse.

Consumer psychologist, Ian Zimmerman, Ph.D., points out that “impulse buying is related to anxiety and unhappiness…The impulse buyer may feel unhappy and may think that being seen with an expensive new purchase will bring respect and happiness. This perceived road to happiness motivates the impulse buyer to go shopping…likes [a] product, and experiences pleasure at the thought of being able to purchase it immediately and go home with it.”3

Therefore, when you are down in the ruts, don’t use shopping as a therapy to give you a quick pick me upper. Instead try to find different avenues to deal with frustrations, boredom, and fatigue such as meditation, exercising, writing, drawing which are all practically free. One technique that could help you avoid impulse shopping is doing deep breathing exercises. You are window shopping with no intention of buying anything and you see those new Nike shoes and want them like now…”Take a breath and try this instead: Tell yourself you can buy it, but not until next month. By then, you’ll either have enough saved up or you’ll decide you don’t like it that much after all. Even better, if you wait it may be on sale! Problem solved.”4

In the same vein, when you go grocery shopping, stick to the items on your grocery list and never shop hungry.

Related: What motivates impulse buying

In conclusion, in order to budget wisely and help achieve your financial goals, it is well worth it to follow these five tips: 1. spend less than you earn, 2. create a monthly budget and adhere to it, 3. pay with cash instead of credit cards, 4. stick to your grocery list and brown bag your lunch, and 5. don’t buy on impulse.

Sources:

https://www.nerdwallet.com/blog/credit-cards/credit-cards-make-you-spend-more/

http://www.businessinsider.com/studies-help-explain-why-credit-cards-make-us-spend-more-2014-7

https://www.psychologytoday.com/blog/sold/201207/what-motivates-impulse-buying

https://www.everydollar.com/blog/8-steps-to-help-you-stick-to-your-budget

 


About S & P Accounting Services

S & P Accounting Services is a professional accounting firm situated in North York, Ontario. We are chartered accountants with extensive experience with audit, review, tax and bookkeeping. We strive to operate in accordance with our principles of quality, professionalism, and integrity and are dedicated to excellent service.  We aim to ensure that our clients receive the highest quality of financial, tax and accounting services and advice. We happily serve clients in Toronto, North York, Mississauga, Vaughan, Richmond Hill and in other cities in the GTA.

If you have any questions or inquiries about our accounting services, please contact S & P Accounting Services.

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

Five steps to creating a successful monthly budget

What is a monthly budget?

A monthly budget is a tool that helps you manage your money. It allows you determine how much money you are earning, spending and saving. Devising a budget can help you balance your income with your regular expenses and guide your spending habits to help you attain your monetary objectives.

Creating a budget can initially be overwhelming and a difficult feat, yet as you read through the following five steps, you’ll see that it’s feasible and definitely worth the effort.

What are the steps to creating a monthly budget?

Overall, the steps for creating a monthly budget are as follows: 1. Track your spending to determine where your money is going, 2. Divide your expenses into various categories, 3. Record your daily expenses, 4. Assess where you can cut your expenses and 5. Define your financial goals, make a plan and stick to it.

1. Track your spending to determine where your money is going. For a month or two jot down every single cent you spend, yes even that $3.75 caffe latte you sip at your daughter’s ballet practice and the chow mein meal you devour after dancing the night away with your girlfriends.  

At the end of the month add the total expenditures and subtract this total from your net earnings to see whether or not you’ve spent more than you’ve earned. This calculator will show you how seemingly inconsequential purchases can add up over time.  For instance, if you spend $2.50 on a daily coffee, it will cost you more than $900 per year.   On the flip side, if you make small changes to your spending habits, such as reduce the amount of coffee you buy, this minor change can have a positive effect on your budget and your ability to save.

2. Examine what you spend money on during the 1 to 2 month period and divide your expenses into various categories. You could divide your expenses into broad categories such as housing, car, food, and then set up sub-categories within them. For instance, under the category housing, you could further divide it into mortgage payments, rent, utilities, and repairs.

3. Consistently keep a tab of your daily expenses. Write down all your purchases on a Post-it Note and keep it conveniently in your wallet. Then when you get home, transfer your purchases to an excel spreadsheet or a budget app. Here is an excellent budget calculator worth checking out.

4. Assess where you can cut your expenses. This is where the real fun begins. It’s now time to examine each category (see step 2) and determine where you can trim your expenses. You may be surprised by the seemingly minor purchases that are eating away at your credit card, such as the extra $50 you rack up at the grocery store simply because you are purchasing food when you are hungry or not adhering to a grocery list.  Carefully review your spending habits and devise a list of items to par.

The accompanying activity might help you figure out which spending to cut from your budget. Divide your expenses into two classes: “needs” (e.g., groceries and utilities) and “wants” (e.g., tickets to a show). Assess your needs and wants. A need is something that is important, required or fundamental. For instance, a roof over your head, heat for your home, nourishment, clothing or medicine. On the contrary, a want is something that you’d like, however, don’t really require. Dinners at restaurants, coffee from Second Cup, tickets to a concert, a gym membership or designer clothes and shoes are examples of wants. Needs and wants aren’t the same for everybody. One individual’s want might be someone else’s need. Let me explain. If for instance, you live in a metropolitan area near a bus route, a car may be more of a want rather than a need. On the other hand, if you live in the suburbs, and don’t easily have access to public transportation or can’t walk or cycle to work, a car may be a need.

Some suggestions on how to cut your expenses include: borrowing books from your local library instead of buying them on Amazon; borrowing movies from the library instead of going to the movie theatre; running or walking outside instead of purchasing a gym membership;  getting rid of one car and relying on public transportation; using the washer and dryer during off-peak hours; and shopping at discount food stores or using the app Flipp, which could help you price match and save on weekly food essentials. These changes no matter how small may save you hundreds or even thousands of dollars each year.

5. Define your financial goals, make a plan and stick to it. Creating a budget won’t magically transform your spending behaviour.  You will need to consistently monitor your spending and define your goals and priorities and stick to them. Monitoring your spending could be done by consistently writing down your weekly budget and reviewing it to see if you are spending less than you earn.  Whereas defining your goals involves sitting down and reflecting on where you want to be financially in a year, three years or five years from now. One important goal you should consider is to increase the amount of money you deposit into your savings account each year.  Yet, this goal should be a priority only after you have paid off your debts because it won’t make sense to put money away while you are paying interest on your debts. Other goals that are worth attaining include setting up an emergency fund, paying off your mortgage in x amount of years or saving money for your children’s post-secondary school education. 

What are some tips that could help you to adhere to your budget?

  1. Minimize your spending behaviour as much as possible to what is in your budget. try to stick to buying products and services that are needs rather than wants.
  2. Record your receipts and bills in your budget app or excel spreadsheet.
  3. List your income and expenses and compare the two at the end of the month to see if you are spending more than you earn.
  4. Evaluate your monthly budget to see if you are your spending greatly differs from your budget. If this is the case, you may need to reevaluate the figures to make it more sensible and realistic.
  5. When contrasting your budget with your actual spending, ask yourself the following:
    1. Are there huge or little differences between your actual spending and budget?
    2. Which categories have the biggest differences?
    3. Are differences due to an atypical circumstance (e.g., repairing the washer) or is this prone to happen every month?
    4. Are you able to save enough money to achieve your financial objectives or pay off your debts?
    5. Continue to reflect on your spending behaviour and to ask yourself these above questions every month.
    6. You are going in the right direction if your spending differs a bit from your budget.

Are you looking for more info on how to make smarter financial choices?

A great resource to check out is MyMoneyCoach.ca.

MyMoneyCoach.ca is a free public service provided by the Credit Counselling Society (CCS). The Credit Counselling Society is a non-profit, government registered, charitable organization dedicated to helping individuals and families find solutions to their debt and money problems. CCS provides consumers with confidential and free counselling services, credit education, and debt management programs.

Source: https://www.canada.ca/en/financial-consumer-agency/services/make-budget.html


About S & P Accounting Services

S & P Accounting Services is a professional accounting firm situated in North York, Ontario. We are chartered accountants with extensive experience with audit, review, tax and bookkeeping. We strive to operate in accordance with our principles of quality, professionalism, and integrity and are dedicated to excellent service.  We aim to ensure that our clients receive the highest quality of financial, tax and accounting services and advice. We happily serve clients in Toronto, North York, Mississauga, Vaughan, Richmond Hill and in other cities in the GTA.

If you have any questions or inquiries about our accounting services, please contact S & P Accounting Services.

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.