 The Clarinet BBoard
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Author: Brenda ★2017
Date: 2009-04-07 03:25
Besides the obvious business-related tax deductions that are discussed in the "US Tax deductions" thread: In our accounting office we're reminding parents about a case that went to the Tax Court of Canada. The result?
Music lessons at the Grade 9 and above (Grades 9, 10, and ARCT) in the Royal Conservatory of Music program are considered to be "post-secondary". As such, the cost of the lessons are deductible as Tuition Fees, and if the student doesn't need them to reduce taxes then the deduction can be transferred to a parent, grandparent or spouse. For Canadian residents who need to know, there's no corresponding education deduction or textbook amount as there would be for full-time or part-time courses. The lessons don't need to be taken at a brick-and-mortar school but include private lessons in the teacher's studio.
The actual judgement is here: http://decision.tcc-cci.gc.ca/en/2007/2007tcc632/2007tcc632.html
The mother of the high school aged music student was so bugged by the arrogance of the CRA's auditor that she took CRA to court. She showed the judge that CRA's published criteria for claiming the Tuition Fee deduction (and the tuition transfer) was that the education had to be post-secondary. Since the Grade 8 RCM level is considered an equivalent to Grade 12 High School Music credit and Grade 9 is considered college level, she argued that there's no reason that CRA should disallow it. The judge agreed with her.
In our office we actually had a high school freshman taking the Grade 9 level piano lessons! (If only I'd realized this back when I was taking the advanced lessons....)
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Author: Margaret
Date: 2009-04-07 21:03
Hello,
That is way above my level, but thanks for the information... maybe in 10 or 12 years
Anyhow, I'm responding because if you took these lessons within the last 5 tax years, you can redo your taxes and claim these benefits.
Margaret
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Author: Brenda ★2017
Date: 2009-04-08 02:10
Well, as we tell our clients, it's always worth a try. CRA can surprise you sometimes. Their written line says three years, but they sometimes give you wiggle room, especially if they see you've been faithfully filing your returns on time every year.
They'll need the detailed receipts or copies of the front and back of cashed cheques, something to show proof of payment. If you can send photocopies of the written exam results for the appropriate grade level then you only strengthen your case.
Something I forgot to mention is that the judge in this case specifically mentioned that the criteria is not the age of the student, but rather the educational level of the course that determines whether or not the tuition is tax deductible. One of our other accountants phoned me to ask about this because his client brought in the official tuition receipt from a Music School in town, but the children were only 9 and 10 years old. If they're geniuses and have reached that level of ability at their ages, then great! But I warned him to ask the parents what exam level the kids were working towards. Those receipts should have been more specific.
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