Tax season may not be everyone’s favorite season of the year, but with a little information, you can maximize your refund. To maximize the size of your tax return, it’s essential to be aware of the tax credits to which you are entitled. Tax season can be stressful, and the tax filing deadline (April 30, 2023) always seems to come out of nowhere for many Canadians. Therefore, it makes sense that many beneficial credits and deductions are overlooked in a rush to file. Each year, unclaimed money from Canadians totals millions of dollars. Therefore, we’ve compiled a list of five tax deductions that many individuals often forget to claim in order to make things easier. By doing this, you can increase your refund and make sure no money is lost.

Tax Deductions

Do you have any experience with filing taxes? The amazing world of tax deductions is yours to explore. You can deduct these listed expenses from your income to lower your federal income tax liability or boost your tax refund.

Over 13 million refunds, or 78% of all refunds, were issued to Canadian taxpayers by direct deposit last year. The benefits of submitting your taxes are numerous. In 2022, the average tax refund for Canadians was $2,092. Deductions are an efficient approach to lower your tax liability and save money. So don’t wait; utilize all of the write-offs that are available this tax season to maximize your return on investment.

5 Tax Deductions You’re Probably Overlooking

Moving costs

Except under certain circumstances, moving expenditures are generally not allowable deductions on tax returns. For instance, you might be able to deduct the costs of moving if you moved to begin a new work or enroll full-time in post-secondary education. You can deduct the price of renting a moving truck or hiring movers if either of these circumstances applies to you, but did you also know that you can deduct the price you paid for your new home (such as legal or notary fees) as well as the cost of maintaining your old home while you’re trying to sell it?

Medical costs

When most individuals think of medical bills, they usually think of things like dental cleanings, prescriptions, and eye care. The truth is that as long as your doctor has given his or her approval, you can deduct a wide range of medical expenses. For instance, you might not be aware that, given the appropriate circumstances, items like a furnace, an air conditioner, electrolysis, and gluten-free items can all qualify as medical expenses.

Interest in student loans

Repaying student loans is a hassle that no one wants. The good news is that the CRA allows you to claim a tax credit for the interest paid on your provincial and federal student loans. But you cannot use this credit for interest paid to a private lender (if you obtained a student line of credit from your bank) or if two or more of your student loans were consolidated. You may not have to report all of the interest on your student loans on your tax return this year, depending on your salary level and personal circumstances. If so, you have up to 5 years to carry any unused amount forward for use on a subsequent return.

First-time home buyer

In Canada, you are eligible for a sizable tax credit if you are purchasing your first house. The government can reimburse you up to $750 if you buy an eligible house in Canada during the tax year. This excludes the different grants offered by provincial governments to homebuyers. These range from grants for property taxes to grants for property transfer taxes. Find out what subsidies and credits you are qualified for as a first-time homebuyer by contacting your provincial government.

Charity donations

Even little donations to charities can pile up over the course of a year. You may already know that when you give to an eligible charity, you are entitled to a 15% tax credit on the first $200 you donate and a 29% tax credit on the balance (up to 75% of your income). CRA allows you to keep your donation amounts (for up to five years) and claim them all on one return in order to maximize the impact of your donations on your return.

Bottom Line

The deadline for filing your tax return is April 30, 2023, but because it falls on a Sunday, the deadline is May 1st. It’s important that you start making preparations so that you can claim any deductions and ensure that everything is in place without any rush-hour agitation.

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