With spring comes the urge to order, and organize, to put every last scrap in its rightful place. Why not take some of this productive energy and apply it to optimize your tax return?
Currently, the Canadian government offers over 400 credits and deductions that can help increase your tax refund or decrease your tax bill.
Some of these tax breaks – like the T-slips you can access by logging into your CRA My Account —are hard to miss. Others are less obvious. That’s why we’ve put together this list of 20 ‘hidden’ tax deductions waiting to be found and put in the right place: your tax return!
- Tax deductions are used to reduce your taxable income before any credits are applied.
- Keep track of your expenses and save receipts to help you stay organised and ready to claim those deductions.
- TurboTax searches through over 400 credits and deductions for you.
1. Charitable donations
There are a zillion reasons to donate to your favourite registered charity, but did you know that receiving a charitable tax credit was one of them? For every donation you make, a percentage (ranging from 15% to 33%) comes back to you as a credit that reduces your taxable income.
2. NEW! One-time cost of living tax credit (for Québec only)
The 2022 budget offers something special for Québec residents: a one-time refundable tax credit of up to $500 to help offset the rising cost of living. It’ll be paid out to eligible taxpayers whose net income for the year is less than $105,000.
The Canadian government offers family tax deductions and credits on everything from birth-related medical expenses to higher education. Whatever your child’s age or stage, there’s probably a benefit with their name on it.
3. Adoption expenses
Parents who adopt a child can claim eligible expenses to a maximum amount of $16,563 for each child (under 18 years old). To claim these expenses, you must have incurred them in the tax year that coincides with the adoption period.
4. Child care expenses
Going back to school or work? You can claim the childcare costs for nursery schools, daycares, caregivers, boarding schools, day camps, and sleepaway camps. There are annual limits that vary with each child’s age. If your child has a disability, a higher limit may be available.
5. First-time home buyer’s tax credit
Taking the plunge and buying your first home? The Home Buyers Amount (HBA) is worth looking into. If you’re a first-time buyer, or a purchaser with a disability, you may be able to claim up to $5,000.
6. Home renovations that improve mobility or access (for B.C. only)
The B.C. Home renovation tax credit offsets the cost of permanent renovations to make homes more accessible and functional for seniors and individuals with disabilities.
Eligible medical expenses are extensive and often overlooked. Here’s a sampling of the medical deductions you, your spouse (or common law partner), and your eligible dependents may be able to claim under the medical expense tax credit (METC):
7. Disability tax credit (DTC)
The CRA created the Disability Tax Credit (DTC) to make life a little easier for Canadians with a serious and prolonged physical or mental impairment. If your condition gets in the way of performing daily activities, it’s highly possible you qualify. Answer a few questions here to see if you are eligible.
8. Private medical insurance premiums
Any premium or contribution you pay to a private medical, dental, or hospitalization plan is considered an eligible medical expense.
9. Tutoring for children with disabilities
If your child has a learning disability and needs a professional tutor, you can write off this expense (as long as the tutor isn’t a relative). All you need is a letter from a medical practitioner certifying this service is needed.
10. Travel expenses to seek medical treatment
Live outside a major city centre and need to travel for medical care? The costs may be tax deductible. If you travel at least 40km (one-way), eligible expenses may include transportation and parking costs, meals, and accommodations.
11. Prescription contact lens or glasses
Prescription glasses and contacts are another allowable medical expense that often gets overlooked. To claim this expense, you’ll need to provide a copy of your prescription, along with a dated receipt.
12. Dentures and dental implants
Most dental expenses, including basic dental care and cleaning, dentures, and implants, are tax-deductible. The only exception is dental work that’s purely cosmetic, such as teeth cleaning.
You can’t put a price on education, but the Canada Revenue Agency (CRA) offers education tax credits that can help reduce the expense of one.
13. Student loan interest
To decrease the burden of repaying a student loan, the CRA offers a deduction for qualifying student loan interest payments.
14. Canada training credit
Are you a working Canadian in a training program for which you pay tuition or fees? You could be eligible for the Canada training credit, an annual credit of up to $250 with a lifetime limit amount of $5,000.
Whether you’re employed or self-employed, here are a few work-related deductions waiting to be claimed.
15. Employment expenses
Earning a living as an employee comes with its own set of expenses, ranging from accounting and legal fees to tools and technology. If this sounds like your situation, our list of deductible employment expenses is worth looking into.
16. Self-employment expenses
While dedicated office space in your home can mean big tax savings, there are countless other deductible self-employment expenses worth claiming. A general rule: if an expense contributes to your business, you can claim it against your earnings, even if your business isn’t incorporated.
17. Moving expenses
Relocating for work or school? You can claim certain moving expenses if you meet two conditions. First, you moved either for work, to run a business, or to become a full-time student in a post-secondary program. Second, you moved at least 40km to be closer to your new workplace or school.
18. Union dues and licensing examination fees
The CRA lets you deduct various union dues, professional membership dues, and insurance premiums related to your employment. You can even claim dues that were paid on your behalf if they were included as part of your income.
Look closer: your savings plan and investment income may also reveal opportunities to reduce your tax bill.
19. Registered Retirement Savings Plan (RRSP)
In addition to creating a more financially stable future, contributing to your Registered Retirement Savings Plan (RRSP) reduces your net income and shelters your money from taxes until you start withdrawing it – ideally when you retire (at which point you’ll be in a lower tax bracket!)
20. Carrying charges
Tax-deductible carrying charges and interest expenses are the eligible expenses you generate while earning investment income. Examples include fees for investment management and interest charges on borrowed funds.
The only downside to the hundreds of tax breaks offered by the CRA is the nagging worry that one – or more—will slip through your fingers. TurboTax can eliminate every doubt with an easy, breezy process that ensures you’ll get the biggest refund or pay the least tax possible.
Get every credit you deserve
TurboTax automatically searches 400+ credits and deductions for you.