5 Ways to Maximize Your 2023 Tax Return in Canada

With hundreds of tax credits and deductions available in Canada, you might be asking, “How can I possibly keep track of them so I don’t miss any?” Add to that the dozen or so new federal or provincial tax credits introduced each year, and figuring out how best to maximize your refund could make you have to quit your day job!

Well, we don’t want you to do that. There are ways you can make the most of your tax refund after completing your return. And, as with any complicated task, you’ll want to take it one step at a time. Keep these best practices at the forefront to score the max tax return you can get. 

• Input all your personal info. This will ensure your tax return (and deductions are calculated correctly).
• Claim all your credits and deductions. Don’t leave a chance to save behind. 
• Update your dependant info. Dependants can help you save on your return. 
• Include all your carryforwards (donations, tuition, capital and non-capital losses, and RRSP deduction limits). Don’t forget any previous credits.

Along with the points above, these 5 tips can help:

1. Input all your tax slips to get your max tax return amount

Everyone’s income and finances are different. Despite that, there are a few common categories of tax slips to track and input. This will ensure your taxes are properly calculated and you get all the deductions you’ve eligible for. 

• Employment income. Working? You’ll have employment income to input from one or more employer (T4 slip) or self-employed income streams (T2125 statement) . 
• Retirement income. Retired? Whether you have pension income (T4A slip), income from a Registered Retirement Investment Fund (T4RIF slip), or income from a Registered Retirement Savings Plan (T4RSP slip), make sure you claim all of it.
• Investment income. Do you invest outside of registered accounts? In that case, you’ll likely have one or more T5s or T3s to add to your return. What if you sold investments in the past year? Make sure to note that on your T5008 slip.

Bad at keeping track of paper? The good news is that many tax software programs (such as TurboTax) can connect to your Canada Revenue Agency (CRA) account and pull the tax slips they have on file for you.

2. Claim all your deductions on your tax return

Claiming all your deductions is a great way to get the max return amount. Here are some deductions to pay attention to: 

• Registered Retirement Savings Plan (RRSP) contributions. Figuring out how much RRSP contribution room you have is easy—just look at your last Notice of Assessment (NOA) or log into your account on the CRA website. By making the maximum contribution you can afford (up to the specified limit), you’ll qualify for the biggest deduction. And you have 60 days after the end of the calendar year to do it!
• Child care credit. You can deduct up to $8,000 in qualified child care expensesper child annually for kids under age 7, and $5,000 per year for kids 7 to 16. 
• Other deductions. Unsure of what other credits you might qualify for? Comb through these deductions listed on the CRA’s website for ones that apply to you, like investment expenses, disability support, moving expenses, support payments, and more.

3. Claim all your credits to lower your bill

Think you’re done reducing the tax you owe? You may want to check out these tax credits first: 

• Canada employment amount. This is an automatic credit for uniforms, shoes, clothing, or any supplies you need for work.
• Charitable donations. Get back between 15% and 33% of what you donated. You can max them out even more if you combine them over 5 years and claim them all at once.
• Tuition tax credit. Get a 15% credit for what you spent on tuition. 
• Digital news subscription credit. Do you subscribe to a Canadian news source? You can claim that on your taxes.
• Other credits. There are many other tax credits to take advantage of. Do an exhaustive search to make sure you don’t miss any tax credits or deductions!

4. Update your dependants for your max tax return amount

Did you get married in the past year? Have or adopt a child? You may want to learn about tax credits for new parents.

If you are a single parent, you may be able to claim one of your children as an eligible dependant each year. Plus, you’ll receiveadditional GST/HST credits, and become eligible for other credits or deductions no matter your marital status.

A new spouse (or common-law spouse), could also reduce your tax bill. For example, if your common-law spouse is unemployed or low-income, you can claim their basic personal amount against your income. And if they’re in school, you can claim their education credits—up to a maximum of $5,000 a year. 

5. Include all capital losses to maximize your tax return

If you have investments in a non-registered account, you might face capital gains taxes if you have a good year and sell some of your investments. But if you had losses in previous years, make sure to use those losses to offset the capital gains. 

Other tips for maximizing your tax return

Here are a few more quick ways to reduce your tax amount:

• Check past returns for things you’ve claimed.
• Look for new credits.
• Transfer or pool credits from your kids or spouse, if applicable. Not sure which can be transferred? Tuition, medical, and charitable donation credits all qualify.