Essential Personal Tax Deductions

Essential Personal Tax Deductions

The Canada Revenue Agency offers a range of personal tax deductions. These deductions are subtracted from your gross income to determine your taxable income. The more deductions you have, the less tax you will be required to pay.

Child Care Expenses

On line 214 of your tax return, you can deduct child care expenses for amounts you paid to have someone care for your child while you worked, ran a business, attended school or engaged in grant-funded research. The amount you can claim depends upon a number of factors including the actual amount of the expense, the age of the child, and the type of childcare provided. If your child is disabled, the expense threshold for childcare is higher than the basic limit.

Support Payments

If you have a court order or written agreement to pay spousal support, you can claim those payments as personal deductions. The person who receives these payments must declare them as income. Note that child support payments are not deductible.

Enter the total amount of all support payments on line 230 and enter the amount of your deductible payments on line 220. Although only the amount from line 220 is deductible, you must enter both amounts. You are also required to file your court order or written agreement through the CRA by filing Form T1158 — Registration of Family Support Payments.

Retirement Contributions

If you make contributions to your Registered Retirement Savings Plan, Registered Pension Plan or Pooled Registered Pension Plan, you may deduct those contributions from your taxable income. To determine how much you are allowed to deduct, you can refer to your last notice of assessment from the CRA, or use the CRA’s My Account online service.

To claim the deduction, enter the qualifying amount of your contributions on line 208 or enter the amounts when prompted to by your tax software.

Employment Expenses

Some expenses incurred for your job are deductible. Although you cannot deduct the costs of traveling to work daily or purchasing clothes, you can deduct accounting fees, allowable motor vehicle expenses, parking, supplies, office rent and home office expenses, for occasions when you were required to pay for those items as a condition of your employment.

In order to claim employment expenses, you must have a form T2200 completed and signed by your employer. It outlines the expenses you were required to pay as part of your employment.

Tradespeople can also deduct the cost of eligible tools. Enter all eligible employment expenses on line 229 of your return.

Moving Expenses

If you moved for a new job, to be closer to work, to attend school or to run your business in a new location, you can deduct moving expenses. To qualify, your new home must be at least 40 kilometres closer to your place of work than your old home. Eligible expenses include transportation, storage, movers, meals and incidentals such as fees for replacing your driver’s license.