Canada Tax Deductions & Tax Credits to Take Advantage of
Have you filed your taxes yet? All tax returns are due on or before April 30 (or April 15 if you or your spouse are self employed), which means there are just about 2 months left to file your paperwork.
Do you normally get a cheque or are you the one who always ends up having to pay the government in the end?
Below is a list of tax deductions and tax credits that you can claim on your tax return.
- Moving Expenses (Car Rentals, Plane Tickets, Meals & Lodging)
- Tuition Fees
- School Parking
- Transit Passes
- $400 worth of education expenses for every month that you were in university full time, or $120 per month part time.
Note: Student loans are non-taxable and students can claim a tax credit on any interest incurred on loans.
Note: If a student received a research grant, any expenses accumulated while completing the research can be deducted.
Parent & Child Tax Write-Offs
- $2,089 per child, per year, for each child under 18 living at home. If a child has a disability, the Canadian Child Tax Benefit is increased.
- Up to $500 in registration costs for each child if they are registered in a sport or fitness activity and are under the age of 16. Children with a disability receive an additional $500.
- Tuition or Private Schooling Costs
- Recreational Activities (Camp, Ballet): If the fees were paid while the parent was in school or working.
- First time home buyers can claim a personal amount of $5,000 when qualifying to buy their first home.
- Medical Expenses (Pharmeceutical Prescriptions, Eye Exams, Glasses, Hearing Aids, Medical Insurance, Chiropractic Costs, Massage Therapy Costs, Dental Work)
- Transit Passes for: Buses, Ferries, Subways or any other local transit
Note: For individuals moving or relocating for a job, they can claim moving expenses as well (moving trucks, storage, temporary lodging).
- Internet Fees
- Office Cleaning Materials
- Website Fees (Domain Name, Hosting, etc.)
- Meals & Entertainment (50% only)
- Office Supplies (paper, pens, etc.)
- Employee Salaries
- Telephone Bill
- Accounting, Tax Preparation Costs, Legal Fees
- Business Travel Expenses
- Home Office Expenses: Rent, Utilities, Property Taxes, Mortgate Interest, Repairs & Maintenance (Note: If your home office space is 15% of the total square footage of your home, then you can deduct 15% of your home office expenses.)
- Company Car(s), Gas & Oil, Repairs & Maintenance, Lease Payments, Toll Charges, Insurance, Parking, Vehicle Registration Fees (Note: If you drive 20,000KMs for the year, and 50% were for business, you can write off 50% of your car expenses. If you own your vehicle, you can write off 30% of the cost of your vehicle each year – prorated for the business use portion of your car.)
What is a Capital Asset?
A capital asset is something of tangible value, which will last a long period of time (1 year or more).
Capital assets are written off over a period of time based on the CRA’s specified depreciation rates, which are:
- Equipment (a camera for a photographer, a computer for a blogger, paint for a painter, etc.) = 30% per year
- Furniture (computer desk, filing cabinet, etc.) = 20% per year
- Software = 50% per year
- Computers & Computer Equipment (printer, scanner, etc.) = 100%
- Vehicles = 30% per year
Preparing your taxes doesn’t have to be an expensive endeavor. Get back as much money as you can and always file on time to avoid late fees.
Be sure to hold on to any receipts you may need, because you never know if you will end up being audited (but let’s hope you want).