Tax Credits and Deductions Canadians Should Be Aware Of

Canadians are eligible for a variety of tax credits and deductions. When tax season approaches, it is important to be aware of these in order to ensure that all of the possible credits and deductions are claimed. There are some that are common, and then there are others that people are likely to miss. Here is an overview of the credits and deductions that are commonly missed.

Childcare Expenses

Canadians that spend money on childcare expenses, whether day care, summer camp or any extra curricular activities, can claim up to $7000 for each child. This can either be claimed by one parent, or split between the two parents. Generally, it is claimed by the parent with the lowest income. Visiting the CRA website can give you further information about the childcare deductions.

Medical Expenses

Canadians that spend on medical expenses throughout the year that are not covered by their insurance can usually be claimed on their taxes. It is considered a non-refundable tax credit. Sometimes, even expenses that are incurred for dependents can be claimed as well. For example, attendant care for disabled dependents, including expenses that are incurred through home renovations to accommodate the disabled person, may be covered. Health insurance premiums may also be considered a medical expense.

Disability Expenses

Canadians that suffer from a physical or mental disability may be able to use this as a deduction. To determine eligibility, it is the responsibility of the patient to have their medical doctor complete the Form T2201.

Self Employment Expenses

Self employed Canadians may qualify for particular tax credits and deductions. For instance, a business owner that works from their home may be able to claim part of their monthly mortgage interest, property taxes, utility bills, and homeowner’s insurance payments on their taxes. Renters may be able to claim a portion of their monthly rent as a deduction. This percentage will depend on how much of their home is used for business.

Moving Expenses

Canadian taxpayers can claim certain moving related expenses on their taxes. This is true if they move in order to find work or do business in another area. Students can also claim moving related expenses if they move in order to further their education at a college or university. The new home has to be 40 km closer to the new place of employment or school in order to be eligible.

Charitable Donations

Any donations or gifts made throughout the year can also be claimed on the tax return. Spouses can combine their charitable donations in order to maximize their tax breaks. Charitable donations can be carried forward through the following five years, but only if they are going to be in a higher tax bracket.

Carrying Charges

Taxpayers can also claim certain carrying charges, like interest that is paid on loans, fees paid for managing investments, or payments made for investment advice. There are some restrictions that go along with this deduction.
There are a variety of other deductions that can be claimed as well. These are just a few of the most frequently missed deductions and credits.