These 6 Canada Tax Credits & Deductions Could Make Filing A Bit More Bearable
How many are you eligible for?
Let's be real: while we all know it helps society run (somewhat) smoothly, few people really like paying their taxes. Filing your taxes in Canada — whether you do it yourself or enlist a professional — can be complicated and it can sting to watch some of your hard-earned cash fly out of your bank account.
The good news is that, beyond putting money into RRSPs or TFSAs, there are expenses you can deduct from your taxes this year — and even credits that will get you some cash! Here are six of the most common tax deductions and credits.
Canada Workers Benefit
The Canada Workers Benefit is meant to help supplement the earnings of workers with a low income. You're eligible for the benefit if you are a resident of Canada, earned working income, and you're either 19 by December 31 of the taxable year or living with a spouse, common-law partner or your child. You can expect a maximum amount of $1,395 for single individuals and $2,403 for families.
Home Buyers' Amount
First-time homeowners are eligible to claim the Home buyer's amount of up $5,000. On your return, this takes the form of a 15% credit, meaning you essentially reduce your taxes by up to $750. To be eligible, you (or your spouse or common-law partner) must have bought a qualifying home in the taxable year. It's also essential that the home you lived in during the year of acquisition and the four years before that was not owned by you, your spouse, or your common-law partner.
Child Care Expenses
If you're the primary caregiver of a child, you can declare child care expenses on your taxes. If you live with a partner, the one of you with the lower net income typically declares child care expenses on their taxes, though there can be exceptions. Only one partner can declare child care expenses each year.
Home Office Expenses
Here's one most of us can use! If you (like most of us) worked from home at any point in 2021, you can declare home office expenses on your taxes, with up to $500 in play. You need to factor in some specifics, but everything from office supplies expenses, your phone bill, and a portion of your rent can potentially be deducted from your taxes for the year.
Medical expenses are another cost you can deduct on your taxes. For 2021, you can declare expenses for any 12-month timeframe ending in 2021, provided that you didn't already declare any of those expenses on your 2020 taxes. With very few exceptions, all out-of-pocket medical expenses can be deducted – even medical expenses incurred in another country.
You can declare tuition fees on your taxes, provided that you enrolled in post-secondary education in 2021. It also applies if you're at least 16 years old by the end of 2021 and "developing or improving skills in an occupation and the educational institution has been certified by the Minister of Employment and Social Development Canada." You can carry forward up to $5,000 of tuition fees to next year's taxes.
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