Previously published in The Fund Library

The tax-filing deadline is April 30. So you still have time to take advantage of a variety of lesser-known credits, deductions, and transfers that the Canada Revenue Agency doesn't exactly advertise with ringing bells and flashing lights. Here are five of my favorites of particular interest to higher-bracket taxpayers and investors.

1. The Equivalent-to-Spouse Tax Credit

This tax credit could add up to at least a $1,500 tax saving, once you take federal and provincial taxes into account. You may be able to claim it if:

  • You are divorced of legally separated (not supported by your spouse), and you support a child under 18 in your home.
  • You are a single parent with a child under 18 living with you.
  • You are single and support a brother or sister under 18 living with you.
  • You support an elderly parent who has moved in with you.

To claim the credit, you must be either unmarried or legally divorced, maintain and live in your own residence, and have a qualifying dependant who lives with you and is wholly dependent on you for support during the year (the dependant may live away while attending school).

2. Transferring dividends to your spouse

If your spouse has little or no income except for taxable dividends from Canadian companies, you may be able to reduce the family tax bill by including your spouse's dividends in your income.

While that may seem totally counterintuitive, doing so will help reduce your tax if your spouse can't make full use of the Dividend Tax Credit. However, you may do this only if the transfer of dividends increases the claim you make for your spouse as a dependant. Moreover, if you do decide to transfer dividends, you have to include all of your spouse's dividend income from Canadian companies.

These strategies can be effective in the right circumstances. But everyone's tax situation differs in the particulars. The best way to determine whether a transfer would work for you is to consult a qualified tax specialist.

3. Claim reserves for capital gains

If you have sold assets in 2014 and realized a capital gain, in some cases you may be able to claim a capital gains reserve to defer recognition of that capital gain for tax purposes.

You can claim a reserve if you sell a property but do not receive all of the proceeds right away. An example of this would be selling appreciated shares and taking back a promissory note as consideration.

Under the reserve rules, you need only recognize one fifth of the gain in the current and each later year (cumulatively), so that the entire capital gain will be accounted for by the fourth year after the year of sale. If you are not able to claim a reserve because you received all of the proceeds immediately on the sale, look to see if you have a capital loss carryforward balance from previous years that can offset your capital gain.

4. Objection expenses

If you tangled with the CRA in 2014, find bills or invoices from your tax and legal advisors. You can deduct legal fees paid for advice to object to (or appeal) an assessment under the Income Tax Act, the Unemployment Insurance Act, the Canada Pension Plan or the Quebec Pension Plan, plus any related accounting fees (net of any award or reimbursements for such expenses).

As always, with any tax strategy that involves more complex financial, investment, or commercial arrangements, I advise getting professional legal tax advice in advance.

5. Claim foreign tax credits

You may be able to claim these if you have received investment from a foreign source. File Form T2209. If your federal foreign tax credit is restricted owing to certain tax rules, you may be able to claim a provincial credit by filing Form T2036. If you still can't claim the full credit, the excess foreign tax credit may be deductible.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.