Lilly Tax

07/31/2026

Self-employed Canadians fill out Form T2125 as part of their T1 personal tax return.
The costs that are deductible cover the home office, the vehicle (at a business rate), meals (at 50%), professional fees, advertising, the capital cost allowance on equipment, payments to subcontractors, and other similar items.
Personal expenses, fines, penalties, and subscriptions to clubs are never deductible.
You should retain all your receipts for six years since the CRA has the right to audit any return during that time.
The amount of expenses that are deducted for business purposes is limited by the net business income—these expenses cannot result in a loss.
The Full List of Deductible Self-Employment Expenses
1. Advertising and Marketing (Line 8520)
2. Meals and Entertainment (Line 8523)
The limit set by the CRA for meal and entertainment expenses is 50 per cent of the actual cost.
3. Insurance (Line 8690)
All the types of insurance mentioned—business liability insurance, errors and omissions (E&O) insurance, professional indemnity insurance, commercial property insurance, and business interruption insurance—are payable in full, whereas the premiums for personal life insurance are generally not. Insurance on a vehicle that is used for business should be included in the vehicle expenses section.
4. Interest and Bank Charges (Line 8710)
The interest in business loans, the amounts drawn on business lines of credit, and the balances on business credit cards are deductible. So are the monthly fees charged by your bank, the fees for wire transfers, and the merchant processing fees (if you accept credit cards). However, interest in money borrowed to invest in personal assets is not deductible.

5. Office Expenses (Line 8810)
Things such as paper, pens, toner, stamps, and file folders, together with software subscriptions used in business (like Adobe Creative Cloud, QuickBooks, and project management tools), and small equipment items which are not capitalized, are included. Generally the boundary between 'office expenses' and items that require Capital Cost Allowance (CCA) is about $500: anything that costs more is generally capitalized while cheaper items are expensed right away.
6. Fees of professionals (item 8860)
The costs of accounting for the preparation of your business tax return, the legal fees connected with your business, bookkeeping fees, and business consulting expenses are all deductible. Fees for your personal tax return are not deductible—although the part of those fees that relates to your T2125 generally is. The fee for becoming a member of a professional association that is required for your licence is deductible; however, the cost of a golf club membership is not.
7. Rent (Line 8910)
When you rent an office, a studio, retail space, or a workshop solely for business purposes, the entire rent can be deducted. However, if you work from home, you should not use this provision and instead should use the section on the business use of your home (Part 7 of T2125).
8. Salaries, wages and subcontractor fees (Line 9060 / Line 8860)
The amounts you pay your employees—such as salaries, employer contributions to the CPP, and EI premiums—are deductible. Similarly, payments made to independent subcontractors for services are also fully deductible. However, remember that if you pay a subcontractor more than $500 in a year, you must provide them with a T4A slip and submit the T4A Summary to the CRA by the last day of February in the following year.
9. Telephone and Internet (item 9220)
The business-use portion of your cell phone plan that is used for business purposes, along with home internet and separate business lines, can be deducted. When 65% of your phone use is for business, you should deduct 65% of the monthly bill. To back up your claim regarding the percentage, keep a record of your usage for at least one typical month. A business line that is used exclusively for business purposes is 100% deductible’s 9281–9283)
10. Vehicle Expenses (Lines 9281–9283)
Gas, insurance, repairs, maintenance, parking, registration, and the CCA on a business vehicle are all deductible — but only in proportion to business use. If you drove 25,000 km during the year and 15,000 km was for business, your business-use percentage is 60%. You must maintain a mileage logbook to claim vehicle expenses.
11. Capital Cost Allowance – CCA (section 9 of T2125)
Assets used in a business which have a long life—such as computers, cameras, machinery and furniture—are not deducted in the year that they are purchased. Instead, you claim CCA each year according to the asset class:
Asset Type CCA Class Rate
Computers & tablets Class 50 55%
Passenger vehicles (over $38,000) Class 10.1, 30%
Other vehicles & equipment Class 10 30%
Furniture & fixtures Class 8 20%
Buildings (non-residential) Class 1 4%
Software (not Class 12) Class 12 100%
Zero-emission vehicles Class 54 30%
The half-year rule (also known as the '50% rule') causes your CCA claim to be reduced to half of the normal rate in the year that you get an asset. You are not obliged to claim the full amount of CCA, since claiming less may be advantageous if you want to save your deductions for a year when your income is higher.

12. Business-Use-of-Home (Part 7 of T2125)
So long as your home is your main place of business or if you have a separate area that is used entirely for business purposes, you are allowed to deduct your share of the various home expenses such as rent or mortgage interest (but not the principal), property taxes, utilities (including heat, hydro and water), home insurance, and maintenance. The proportion is generally worked out by dividing the square feet of the area used for business by the total square feet of the home. It should be noted that these expenses cannot result in or increase a business loss; any amount by which a loss exceeds the deductible expenses will be carried forward to the following year.

13. Other Expenses, Line 9270
The general provision on T2125 includes genuine business expenses which are not covered by the categories mentioned above. Examples include professional development courses and books, subscriptions to trade magazines, business-related parking that has not already been claimed in relation to the vehicle, licensing fees, and safety equipment necessary for your job. You should list each item separately together with the amounts.

04/02/2026

Self-Employment Expenses You Can Claim
Self-employed individuals in Canada can claim various expenses to reduce their taxable income. Below is a list of common deductible expenses:
Common Deductible Expenses
Expense Category Description
Business-Use-of-Home Expenses: Costs related to maintaining a home office, such as rent or utilities.
Advertising Costs: Expenses for promoting your business, including online and print ads.
Meals and Entertainment: 50% of costs incurred for business-related meals and entertainment.
Professional Fees: Fees paid for services from accountants, lawyers, or consultants.
Motor Vehicle Expenses: Costs for fuel, insurance, repairs, and depreciation related to business use.
Supplies: Items used in the course of business, such as office supplies.
Utilities: Costs for electricity, heating, and water for your business premises.
Insurance Business-related insurance premiums.
Travel Expenses: Costs for transportation, accommodation, and meals while travelling for business.
Bank Charges: Fees associated with your business bank account.
Important Considerations
•Keep detailed records and receipts for all claimed expenses.
•Ensure that expenses are reasonable and directly related to earning business income.
•Personal expenses cannot be claimed.
By understanding and utilizing these deductions, self-employed individuals can effectively lower their taxable income and retain more of their earnings.

Maria Facundo-Lilly
Certified Tax E-filer since 2006
[email protected] 778-388-2751

03/19/2026

Taking CPP at 60 can help when you need immediate income, have a lower life expectancy, or lack savings. But taking it early means a permanent reduction in monthly benefits.



Reasons to Take CPP at Age 60

Immediate Financial Needs

If you need income for living expenses, unemployment, or health issues, taking CPP at 60 can provide relief and bridge an income gap.

If you are unemployed or have health issues that prevent you from working, early CPP can bridge your income gap.

Life Expectancy Considerations

If you have health concerns, a family history of shorter lifespans, or expect reduced life expectancy, taking CPP early may offer financial benefit.

If you expect a shorter lifespan, taking CPP at 60 can yield more benefits than waiting. If you haven't contributed from 55 to 60, benefits are based on fewer years, making early CPP more attractive. Really, CPP can help pay off debts or cover essential expenses, letting you manage your finances better.

If you qualify for GIS at 65, early CPP can supplement income.

Personal Circumstances

If you have limited savings or income, early CPP can be crucial for financial stability.

If you want to retire early and enjoy life, CPP at 60 can help you do so.

Inflation Considerations

CPP payments are indexed to inflation, so starting early helps manage rising costs.

Flexibility in Retirement Planning

Trial Retirement: Taking CPP early lets you test retirement life while still receiving income, helping you adjust your plans as needed.

Lifestyle Choices

Travel or Hobbies: If you want to pursue travel or hobbies during early retirement, early CPP can provide the funds you need.

Financial Security

A guaranteed income stream can reduce financial stress and provide peace of mind in retirement.


Maria Facundo-Lilly

Certified Tax E-Filer

778.388.2751 [email protected]

03/17/2026

02/28/2026

Save up to $5,000 on career-boosting courses with the Canada Training Credit. This refundable tax credit helps Canadians pay for eligible training costs for courses taken during the year. To qualify, you must meet specific conditions, including being a resident of Canada and having paid tuition or fees to an eligible educational institution.

Overview of the Canada Training Credit

The Canada Training Credit (CTC) helps you pay for eligible tuition and other fees for courses taken during the tax year.

Eligibility Criteria

To qualify for the CTC, you must meet the following conditions:

You must file an income tax return for the year (for example, submitting your annual taxes).

Your Canada training credit limit (CTCL) must be greater than zero (this limit appears on your Notice of Assessment from the previous year).

You must be a resident of Canada for the entire year (that is, living in Canada from January 1 to December 31).

You must have paid tuition or fees to an eligible educational institution for courses taken in the year (for example, a university, college, trade school, or another post-secondary institution that qualifies for tax purposes).

The tuition and fees must be eligible for the existing tuition tax credit (typically, full-time or part-time courses that lead to a degree, diploma, or certificate).

You must be between 26 and 65 years old at the end of the year (for example, you must have turned 26 but not yet 66 by December 31).

Claiming the Credit

You can claim the CTC on your tax return by completing Schedule 11. The amount you can claim is the lesser of:

- Half of the eligible tuition and fees paid

- Your CTCL for the year

For example, suppose you enrolled in a course that cost $1,200 and your Canada training credit limit for the year is $500. Your tuition and fees are $600, but since your CTCL is $500, you can only claim $500 for the CTC this year. This shows that your actual claim is limited to the lower of half your eligible fees or your available credit.

The CTC accumulates at a rate of $250 per year, with a lifetime maximum of $5,000.

Additional Information

You can claim both the CTC and the tuition tax credit, but claiming the CTC will reduce the amount of the tuition tax credit you can claim.

Common Misconceptions: Myth vs. Fact

Myth: The Canada Training Credit is applied automatically when I file my taxes.

Fact: You must specifically claim the CTC on your tax return. It is not automatically applied and requires you to meet all eligibility criteria.

Myth: You can claim the full amount of both the CTC and the tuition tax credit on the same tuition.

Fact: Claiming the CTC lowers the amount you can claim for the tuition tax credit for the same tuition or fees.

By clarifying these points, you can avoid surprises at tax time and make the most of your credits.

The CTC is available for courses taken from 2020 onwards.

For more details, consult the Canada Revenue Agency or a tax professional. To get started right away, check your personal Canada Training Credit Limit (CTCL) in your CRA My Account today and see how much you can claim this year.

Maria Facundo-Lilly

Certified Tax E-Filer

Lilly Tax 778.388.2751 [email protected]

02/28/2026

National pharmacare in B.C.

The BC PharmaCare National Pharmacare Plan (Plan NP) officially launches this March, providing full coverage for many types of prescription medication. With the rising cost of living, residents who require medication will have one less cost to worry about very soon.

Plan NP is B.C.’s newest medication coverage program, which will fully cover things like diabetes medications and menopausal hormone therapy (MHT) starting March 1, 2026. Since contraceptives—including prescription pills, IUDs, hormonal implants, and injections, among many others—are already covered by the Province, B.C. is instead putting federal funding for contraceptives towards free treatment of menopausal symptoms.

According to the Government of British Columbia, those with diabetes “will generally have free access to medications like:

Metformin, which can cost about $100 per year

Insulin, which can cost between $900 and $1,700 per year

Sulfonylureas and SGLT-2 inhibitors, which can cost from $100 to over $1,000 per year.”

Plan NP will not cover all diabetes medications. This includes Ozempic and its generic forms.

If your medication is already covered by BC PharmaCare, it will still be covered. Some will be 100% covered under national pharmacare, and coverage will transfer automatically. Others may no longer need Special Authority for coverage.

How Does It Work?

Coverage is applied automatically at the pharmacy counter, just like with other BC PharmaCare plans. You don’to need to register or submit receipts. Present your prescription for a covered medication and your BC Services Card. The pharmacist will process your medication and give it to you. Items fully covered need no payment. The B.C. The government advises to “always ask for a prescription with the best coverage. You can also askif thea pharmacist can substitute your prescription for an equally safe and effective medication with better coverage.”

What’s Covered?

For diabetes medications:

Insulins

Metformin

Glyburide

Gliclazide

Dapagliflozin

Empagliflozin

Empagliflozin with metformin

These diabetes medications require Special Authority for coverage:

Linagliptin

Linagliptin with metformin

Pioglitazone

Saxagliptin

Saxagliptin with metformin

Oral conjugated estrogen

Oral medroxyprogesterone

Oral micronized progesterone

Vaginal estrogen

Topical estrogen and estrogen/progesterone (gels & patches)

Oral estradiol

Plan NP officially launches on March 1, 2026, and will eventually get expanded coverage for certain diabetes-related devices and supplies on April 1, 2026.



Maria Facundo-Lilly

Certified Tax E-Filer

778.388.2751

02/28/2026

Eligibility Under Section 118.5 of the Income Tax Act

Did you know claiming the tuition tax credit could save you hundreds of dollars on your tax bill this year? Before you file, it is essential to understand which tuition fees and expenses actually qualify under section 118.5 of the Income Tax Act.

The Canada Revenue Agency (CRA) addressed this issue in a written response to a taxpayer’s inquiry. Their explanation sheds light on how tuition tax credit eligibility is determined and which fees qualify.

The Legislative Framework
Subparagraph 118.5(1)(a)(i) of the Act provides that an individual may deduct tuition fees where, during the year, they were enrolled at:

a university, college or other educational institution providing courses at a post-secondary school level.

Let’s break that down into its core components, with brief explanations for each part:

- a university (that is, an institution typically focused on academic degrees at undergraduate and graduate levels)

- a college (such as community or technical colleges offering diploma or certificate programs)

- or another educational institution (for example, a professional association or institution) that provides courses at a post-secondary school level (meaning, coursework beyond the high school level toward certificates, diplomas, or degrees)

Together, the rules cover three categories of educational institutions, but the critical point is that their courses must be considered post-secondary.

This wording highlights three categories of institutions:

Universities

Colleges

Other educational institutions offering post-secondary level courses

Now, let's explore what qualifies as an eligible educational institution under these rules.
There is no official master list of qualifying Canadian institutions. Each case is reviewed individually, often by the local Tax Services Office (see IT-516R2, paragraph 3).

However, CRA’s Interpretation Bulletin IT-516R2 (Tuition Tax Credit) outlines a few guiding principles:

An institution named “university” or “college” is generally eligible if its courses are post-secondary.

“Other educational institutions” may include professional bodies, provided that the minimum admission requirement is a high school diploma.

For example, in Quebec, many professional organizations listed under Schedule I of the Professional Code may be considered eligible educational institutions, provided they offer structured post-secondary education.

Eligible Tuition Fees
Not all educational payments qualify. CRA says eligible tuition fees must meet these criteria:

Meet Jane, a registered nurse who is taking night courses at a local community college. Anne pays tuition for her Anatomy and Pharmacology classes, which include textbooks, assignments, and final exams. These tuition fees are eligible for the credit since they are for structured, post-secondary courses. However, Jane also signs up for a stand-alone certification exam to update her CPR qualification, and pays an exam fee with no accompanying coursework. In this case, the certification exam fee does not qualify, since it is not part of a formal instruction program. Jane can only claim credits for tuition relating to her college courses, not the separate certification test.

They are paid for courses or seminars structured around a formal program of study.

The courses are typically theoretical.

Students may be required to study textbooks, complete assignments, and write examinations.

Special Case: Certification Exams
Certification exam fee eligibility creates confusion. CRA states:

If a certification exam is an integral part of a program of study, then the exam fees may qualify as eligible tuition fees.

Fees paid solely for certification exams without instruction do not qualify, as these exams assess knowledge rather than provide education.

Key Takeaways for Students and Professionals

Confirm your institution offers structured, post-secondary instruction to determine eligibility. For example, if you pay $5,000 in eligible tuition, you could get up to $750 off your taxes this year.

Only tuition fees for formal instruction and study programs are eligible expenses. Knowing this can help you calculate your potential credit and avoid missing out on hundreds of dollars in tax savings for qualified courses.

Certification exam fees paid only for testing do not count as tuition. Excluding these fees means you focus your claims on amounts that will provide you with an actual benefit when tax time comes.

Final Thoughts
The tuition tax credit reduces your tax. To qualify, the institution and fees must meet CRA criteria. If unsure, consult IT-516R2 or a tax professional.

Before you file, use this three-step checklist:

1. Confirm your school and program meet the post-secondary requirements set by the CRA.

2. Gather your official tuition receipts and ensure the fees you claim are for formal instruction, not for stand-alone exams.

3. Double-check your eligibility and calculations, or ask a tax expert if you have questions.

Following these steps will help you claim your tuition tax credit with confidence.

Maria Facundo-Lilly

Certified E-Filer

Lilly Tax I 778.388.2751 I [email protected]

02/26/2026

Five Financial Mistakes That Can Leave You in Poverty

Imagine walking along, oblivious, as coins slip one by one from a hole in your pocket—slowly draining away until you’re empty. Money doesn't vanish; it quietly escapes through unnoticed habits.

1. Spending money before you receive it means you commit funds you don't have. This emotional decision-making leaves you financially behind. For instance, a $500 credit-card cash advance, borrowed before payday, can cost you more than $25 in interest and fees in just one month. That quick convenience quietly drains your future, making the price of impatience painfully real.
2. Buying wants before necessities leads to financial instability. But financial discipline is about designing a system—not just relying on willpower. If you set up your paycheck to automatically send a portion to your savings or bills first (also known as "pay yourself first"), your essentials are covered before you even see what's left. With this simple split-deposit habit, your wants have to stand in line behind your needs, and making smart choices becomes automatic.
3. Not tracking your cash flow. If you don’t know where your money goes, you don’t control your life. No number means no direction , and without direction, there is no Growth.
4. Not saving for emergencies. Problems don’t announce themselves without savings. Every surprise becomes debt. No buffer means no protection.
5. Lending money to the wrong people. Some borrow easily and disappear even faster. Never lend what you can’t afford to lose, and never confuse. Generosity with weakness. Poverty is not just unmanaged behaviour. Fix your habits, and money stops controlling you.

Maria Facundo-Lilly

02/20/2026

The British Columbia renter's tax credit provides eligible low- and moderate-income renters with up to $400 per year to help offset rental costs. To qualify, you must have rented an eligible unit for at least six months, be a resident of B.C., and meet specific income criteria.

Overview of the B.C. Renter's Tax Credit

The B.C. renter's tax credit is a financial benefit for low- and moderate-income renters in British Columbia. Introduced in 2023, it provides up to $400 per year to eligible individuals and families.

Eligibility Criteria

To qualify for the credit, you must meet the following conditions:

* Residency: You must be a resident of British Columbia on December 31 of the tax year.
* Age: You must be 19 years or older, or a parent, or cohabiting with a spouse or common-law partner.
* Rental Agreement: You must have occupied an eligible rental unit for at least six one-month periods during the year.
* Income Limits:
* Full credit of $400 for adjusted income of $60,000 or less.
* Reduced credit for adjusted income between $60,000 and $80,000.

Eligible Rental Units

The following types of rental units qualify for the credit:

* Single-family dwellings
* Apartments
* Condominiums
* Townhouses
* Basement suites
* Detached suites
* Co-operative housing
* College and university dormitories
* Long-term care facilities
* Shared housing (roommates)

How to Claim the Credit

To claim the B.C. renter's tax credit:

1. File Your Taxes: Complete your T1 Income Tax and Benefit Return.
2. Use Form BC479: Fill out this form to claim the credit.
3. Provide Documentation: Keep records of your rental payments and agreements.

This credit is refundable, meaning you can receive it even if you do not owe taxes.

Maria Facundo-Lilly

Certified E-Filer

Lilly Tax I [email protected] I 778-388-2751

02/20/2026

New for 2025

Tax rates and income brackets

The income levels used to figure out your BC tax have changed.

Credits, benefits, and rebates

The amounts for most provincial tax credits you cannot get back have gone up.

The training tax credit for individuals has been extended until December 31, 2028. As of April 1, 2025, the program has changed. Eligible First Nations individuals and persons with a disability can continue to receive the enhanced credit after the federal Apprenticeship Incentive Grant ends on March 31, 2025.

The annual limit for the small business venture capital tax credit has increased to $300,000 for investments made on or after March 4, 2025.

The deadline for qualifying expenditures for the clean buildings tax credit has been extended to March 31, 2026.

The deadline to complete a qualifying retrofit has been extended until March 31, 2027. The certification deadline is also extended by one year.

The BC Climate Action Tax Credit program has ended. The final payment was issued in April 2025.

British Columbia benefits for individuals and families

To make sure you get your payments on time, you and your spouse or common-law partner need to file your 2025 Income tax and benefit return(s) by April 30, 2026. The Canada Revenue Agency (CRA) will use the information from your return(s) to calculate the payments you can get from these programs:

The BC family benefit is a non-taxable amount paid to families with children under 18 who qualify based on their income, as assessed by the CRA. This amount is combined with the Canada Child Benefit into a single monthly payment. You do not need to apply separately for the BC Family Benefit. The CRA will use the information from your Form RC66, Canada Child Benefits Application, to determine if you are eligible for this credit. The BC family benefit is funded by the Province of British Columbia. For details, call the CRA at 1-800-387-1193.

Maria Facundo-Lilly

Certified E -Filer

Lilly Tax I [email protected] I 778.388.2751