With personal tax season fast approaching, we often get asked the question – “What should I be claiming on my income taxes that I don’t know about?” The answer is not necessarily the same for everyone. It depends on their personal situation and what deductions, or credits may be of benefit.
There are certain tax savings that some people don’t know about or forget to claim. So much so, that we decided to make a Top Ten list:
1/ Disability Tax Credit
The Disability Tax Credit (DTC) is a non-refundable tax credit that helps people with impairments, or their supporting family member, reduce the amount of income tax they may have to pay.
If you have a severe and prolonged impairment, you may apply for the credit. If you are approved, you may claim the credit at tax time.
2/ Canada Caregiver Credit
You may be able to claim the Canada Caregiver Credit (CCC) if you support your spouse or common-law partner (or for one of the following individuals if the depend on you) with a physical or mental impairment.
- Your (or your spouse’s or common-law partner’s) child or grandchild
- Your (or your spouse’s or common-law partner’s) parent, grandparent, brother, sister, uncle, aunt, niece, or nephew (if they resided in Canada at any time in the year)
An individual is considered to depend on you for support if they rely on you to provide them regularly and consistently with some or all of the basic necessities of life, such as food, shelter and clothing.
3/ Home Accessibility Tax Credit
Renovations that make homes safer or more accessible for seniors or the disabled may qualify for the Home Accessibility Tax Credit. If you are a senior or have a valid disability tax certificate or are supporting a qualifying individual, you can claim up to $10,000 in expenses.
4/ Charitable Donation
When you make a donation a charity, you can receive tax benefits for your donations. The Charitable Donation Tax Credit is available to anyone who donates to a registered charity. In Manitoba, the first $200 is subject to a 25% credit, with a 46% credit on amounts after $200.
5/ Medical Expenses
Medical expenses can add up quickly over the course of a year. Everything from routine dental visits to prescriptions to doctors’ fees could earn you a credit at tax time. To get the most out of your claim, it’s usually best to have one spouse claim all the medical expenses for the immediate family. Some overlooked medical expenses include:
- Premiums for private medical insurance
- Home renovations that improve mobility or access.
- Travel expenses to seek medical treatment (over 40 km one-way).
- Prescription contact lenses or glasses.
- Dentures and dental implants.
6/ Work from Home Expenses
This is a very popular credit that was introduced by the Canada Revenue Agency since 2020 after the surge in remote work with the pandemic is the Work from Home Tax Credit.
You may be able to claim more than the flat rate account if you have the new form T2200s “Declaration of Conditions of Employment for Working at Home Due to COVID-19” signed by your employer. This form outlines exactly what expenses you can claim, and any reimbursements you’ve received.
7/ Child Care Expenses
You can claim tax-deductible childcare expenses paid to nursery schools and daycare centers, caregivers such as nannies and babysitters, overnight boarding schools and camps that provide lodging, day camps and day sports schools.
There are limitations on who can claim the expenses. For example, in a two-parent household, only the spouse or common-law partner with the lower net income can claim childcare expenses.
8/ Self-Employed Expenses
If you are self-employed, the CRA allows you to deduct a range of business expenses on your tax return.
Regardless of the amount of the expense, it’s important to claim all of your business-related expenses on your tax return. The most common expenses for self-employed taxpayers include:
- Advertising
- Vehicle expenses
- Bank fees
- Office supplies
- Inventory
- Business-use-of-home expenses
- Cell phone
9/ Moving Expenses
Did you know that if you relocated more than 40 km for work, you may be eligible to claim your moving expenses? You can claim eligible moving expenses if:
- You moved and established a new home to work or run a business at a new location; or
- You moved to be a student in full-time attendance in a post-secondary program at a university, college, or other education institution.
Eligible expenses include travel costs, and fees for selling your previous residence.
10/ Home Buyers amount
If you or your spouse or common-law partner purchased a qualifying home in Canada in the previous year, you can claim a tax credit of up to $5,000, which will reduce the amount of federal tax you have to pay. The catch is that you must be a first-time home buyer, which Canada Revenue Agency defines as a person who has not lived in another home owned by you or your partner in the year of acquisition or in any of the four preceding years.
There are many other deductions and credits that are available and have not been discussed here. If you have questions or require more information, please call our office, or go to our website at www.accentcpa.ca and download our free Personal Tax Checklist.