You’re familiar with the saying, knowledge is power? When it comes to your taxes, it literally pays to educate yourself on what is available to you in terms of tax credits, deductions and rebates.
“There are dozens of tax credits, deductions and rebates that are available. However, in many cases, you may not be aware that they exist. If you’re not taking advantage of all of these tax breaks, you are literally leaving money on the table,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“Don’t wait until the tax deadline to investigate what is available to you. Include tax planning as part of your financial strategy throughout the year. If you are rushing to file, you may miss out on some great financial benefits,” says Schwartz.
Here are some commonly overlooked tax credits, deductions and rebates in Canada.
Do you pay any medical expense premiums? These expenses may be deductible. How about vision care or other expenses?
If you have an elderly parent that is dependent on you, in many cases you are able to deduct their medical expenses.
Did you move this year? There are a number of conditions, but in many cases, if you have moved more than 40km for work, you can deduct costs like title transfer, travel costs, fees to change documentation and costs for utility hookups and disconnections.
Make sure that you always ask for and keep your receipt when you make a charitable donation. The more you have the bigger break you can get, as the credit amount increases over $200. You can combine separate donations.
If you qualify for the disability tax credit, you are eligible for up to $8000 in tax benefit. If you have a child who has a disability, you are entitled to a tax-free benefit of up to $2,730 per year. To qualify, your child must be “under age 18 with a severe and prolonged impairment in physical or mental functions” as certified by a doctor.
Buying a home
Bought your first home this year? Congratulations! Bet you could use a little extra cash to help with those homeowner expenses. The good news is that first-time homebuyers are eligible for a sizeable tax credit, which is a one-time deduction of $5000. That helps! You and your home both need to meet some qualifying criteria.
Child care/child expenses
Do you pay for daycare, babysitting or boarding school? There is a tax break for those costs. Some camp costs are covered as well, (i.e. where the purpose of the camp is primarily to provide childcare). Amounts for this deduction vary according to the age of the child (they’re higher when your child is six or under when costs are higher, and lower from ages 6-15).
Student Loan Interest
Students saddled with debt will be pleased to take advantage of this tax break. The interest paid on your student loan is tax deductible. There are a number of conditions around this (i.e. if it is a qualifying loan). One note of interest, if you have combined your student loan with other loans, the interest is not tax deductible.
If you are parking your car at home and taking public transit to save money, here is a tax deduction that will increase your savings. Monthly and annual transit passes (no tokens or single rides) are tax deductible.
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