If you are unable to use certain deductions or tax credits in a particular tax year, you might be
able to use them in a future year. Common carry-forward items include:
• Non-capital losses: business losses arising in taxation years ending after 2005 may be carried forward 20 years (previously ten years for losses arising in taxation years ending from March 22, 2004 to December 31, 2005, and seven years for losses arising in earlier years);
• Net-capital losses: losses on the disposition of capital property may be carried forward indefinitely and applied against capital gains realized in the future;
• Foreign business tax credits: unused foreign business tax credits arising in taxation years ending after March 22, 2004, may be carried forward 10 years (previously seven years) and applied against Canadian income taxes arising on business income from the country in which the foreign income taxes arose;
• Charitable donations: unused charitable donations may be carried forward five years;
• Tuition, Education, and Textbook credits: unused tuition, education, and textbook amounts may be carried forward indefinitely;
• Interest on student loans: unused student loan interest expenses may be carried forward five years; and
• Home office expenses: excess un-deducted home office expenses of an employee or a self-employed individual may be carried forward indefinitely and applied against income from the same office or employment or from the same business.
Transferring Income Tax Credits to Your Spouse or Common-law Partner
You can transfer some income tax credits to your spouse or common-law partner.
The transferable credits are the age credit, disability credit, pension income credit, your own education and tuition fee credits, and the textbook tax credit.
If you are able to reduce your taxes payable to zero without using all of your available credits, you might consider transferring some of these unused credits to your spouse’s return. Don’t let your credits go to waste. Consult the advice of a Chartered Professional Accountant for more information.
For more really useful tax tips, visit https://www.bccpa.ca/CpaBc/media/CPABC/News_Events_Publications/Publications/TaxTipsandRRSP/Tax-Tips-2015.pdf
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
This post has been prepared for general information purposes. It is not advice. The information presented may not fit your unique situation, please consult one of our trusted business advisors at RHN CPA for further clarification and interpretation of your particular circumstances.