Somehow it seems that April 30 comes faster every year. Of course, that is the day Canadian tax returns are due. Besides RRSP, TFSA, and RESP, there are some legitimate ways to reduce the amount of tax.
Deductions
RRSP – In addition to being a great way to save for retirement, these contributions reduce the amount of taxable income. Under the current tax laws, you are entitled to contribute to your RRSP in the first two months of the calendar year and still apply that deduction to last year’s return that you file on or before April 30.
Child Care – Generally child care expenses are a deduction for the parent with the lower net income and there are limits. However, many overnight camps and summer day camps are eligible for this deduction as well.
Moving Expenses – If you took a new job, or attended an educational program, look into deducting expenses for:
Temporary accommodations and meals
Vehicle expenses
Utility reconnections and disconnections
Title transfer expenses for a new home purchase
Other – Consider whether you are eligible to claim other items like union or professional dues, support payments, and others.
Credits
Note that there are two different types of credits: refundable and non-refundable. Refundable tax credit like GST means you can take the credit even if you have no tax to pay. Non-refundable means you can only take this credit if you have tax owing on the return.
Basic Personal Amount – For the taxes filed in 2021 the amount is $12,069. That means that your annual reported income is reduced $12,069 and that reduced amount is what the tax is calculated on.
Spousal Support – You can claim the support you provide your spouse or common-law partner, reduced by the net income of that spouse or partner.
Age – If you are 65 or older at the end of the taxable year, you are entitled to a tax credit. If the person claiming the tax credit can’t use the entire amount, the remainder can be transferred to the spouse.
Other – There are additional credits available depending on your circumstances, including adoption expenses, education costs, medical, donations, and others.
Overlooked Items
There are some deductions and credits that are commonly overlooked. See if any of these apply to you:
· Brokerage fees
· Capital losses
· Caregiver amount for those who had a parent move in for care
· Child Disability
· Charitable donations
There are other deductions and credits that are frequently overlooked as well. Be sure to check all the criteria and restrictions to see if you qualify and for how much.
To be sure you get all the tax breaks you are entitled to, you can use one of the software products on the market. Or, you can hire an accounting firm. If your situation is complex, like owning your own business, you definitely need to visit with a qualified accountant who can not only complete your taxes, but advise on other strategies for the coming year.
Contact your Accountants today click on this link —> https://capexcpa.com/contact
- The Capex Team