At TurboTax Canada it’s our job to think about taxes all year so that you do not have to. We do this because not only are we passionate about taxes, but also because we know that for many Canadians, getting organized at tax time can be a huge challenge. Not being organized often means missing deductions which could have resulted in either a bigger refund, or reduction in taxes owing.
There are many things you can start doing now that will positively impact your tax return next year.
Here’s a list of ways you can help boost next year’s tax return and get a bigger a refund.
1. Tracking Deductions
Did you know there are more than 400 credits and deductions available to Canadian taxpayers?
It’s worth the time and effort to find out which of these you can take advantage of and one way to keep track of these deductions is to prepare a file, label it accordingly, and use it store records of deductions such as medical expenses, donations, business expenses, tuition costs, and others. An even easier way is to use the QuickBooks Self-Employed software which is a fantastic tool for self-employed Canadians track all their receipts and keep organized.
2. RRSP Contributions
The RRSP deadline is usually around March 1, and you can find how much you’re allowed to contribute on your Notice of Assessment, or in your profile through CRA’s MyAccount. When you contribute to your RRSP, you’ll either be able to use that contribution to receive a tax refund, or reduce the amount of taxes owing, which you can later use for things like contributing to your TFSA or paying down an outstanding debt.
3. Student Loan Interest
You may be eligible to claim an amount for the interest paid on your student loan in 2018 or the preceding five years for post-secondary education if you received it under:
- the Canada Student Loans Act;
- the Canada Student Financial Assistance Act;
- the Apprentice Loans Act; or
- similar provincial or territorial government laws.
Only you can claim an amount for the interest you, or a person related to you, paid on that loan in 2018 or the preceding five years.
You can claim an amount only for interest you have not already claimed. If you have no tax payable for the year the interest is paid, it is to your advantage not to claim it on your return. You can carry the interest forward and apply it on your return for any of the next five years.
You cannot claim interest paid on any other kind of loan or on a student loan that has been combined with another kind of loan. If you renegotiated your student loan with a bank or financial institution or included it in an arrangement to consolidate your loans, the interest on the new loan does not qualify for this tax credit.
In addition, you cannot claim interest you paid because of a judgment obtained after you failed to repay a student loan
4. Charitable Donations
Donations have come under a lot of scrutiny over the past few years as a result of some unfortunate donation scams, so the CRA has made some changes to the types of donations allowed.
You can claim a tax credit based on the eligible amount of your gift to a qualified organization, such as;
- registered charities;
- registered Canadian amateur athletic associations;
- registered national arts service organizations;
- registered housing corporations resident in Canada set up only to provide low-cost housing for the aged;
- registered municipalities in Canada;
- registered municipal or public bodies performing a function of government in Canada;
- the United Nations and its agencies;
- registered universities outside Canada that are prescribed to be universities the student body of which ordinarily includes students from Canada;
- Her Majesty in Right of Canada, a province, or a territory; and
5. Moving Expenses
If you had to move for a new job or to take courses as a full-time student, then you may be eligible to deduct your moving expenses from your tax claim. In order to qualify for this deduction, your move must have been at least 40kms closer to your new job or school. Moving expenses aren’t just limited to the cost of the movers, other expenses that may be deductible include:
- Fees for the costs of selling a house, such as agent and legal fees, advertising, and mortgage penalties;
- Travel expenses to the new location, including vehicle expenses, meals and accommodations for you and your family members are all eligible. To claim vehicle or meal expenses, you must use either the detailed or simplified method.
- Temporary living expenses (for up to a maximum of 15 days), including meals and accommodations for you and your family, can be deducted.
- Costs of cancelling a lease of your old residence and costs to maintain your old residence (maximum of $5,000) when it was vacant after you moved are also eligible.
- Incidental costs, such as changing your address on legal documents, replacing driver’s licenses, vehicle permits, and utility hookup and disconnections are deductible as long as they are related to the move.
Using trusted tax software, like TurboTax, can help you maximize your refund by walking you through your taxes step-by-step and automatically searching through all available credits so you never miss out.