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.
Students
- Moving Expenses (Car Rentals, Plane Tickets, Meals & Lodging)
- Tuition Fees
- Textbooks
- 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.
Personal
- 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).
Business
- Advertising
- Subscriptions
- Internet Fees
- Office Cleaning Materials
- Website Fees (Domain Name, Hosting, etc.)
- Computer
- 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).
Visit the Canada Revenue Agency’s website for more information on tax credits and tax deductions.
Comments
Hi Cassie,
Just a note that self employed individuals have till June 15 to file, however, any amount owing must be paid by April 30th…
Just a note the home renovation tax credit was only available for 2009. You are no longer able to claim 15% of your home improvements over $1,000 to a maximum of $10,000. This was a great incentive for home owners and I wish they’d bring it back 🙂
Awesome, thanks.
I use ufile.ca and it’s free as my income is under their bracet for free filing, lol.
Also, for first time home buyers (like me)… if you bought a house after Jan 29, 2010 (I think is the date).. you qualify for a credit… up to $5000 (again, I think it is)! 🙂
I always get money back, yay!
Oops, the first time home buyers is up there, lol, sorry. 🙂 Good info!!
Jenny – Yes, you are right. Thanks for the heads up! Since Richard and I file together, I’m hoping his refund will eat up whatever I owe so that we don’t have to pay anything.
Teresa – Oh no! Thanks for letting me know, I completely missed that 2009 part!
Tara – Lucky you! I miss the days when I would always get money back, haha.
Thanks for the tips! 🙂 I just filed our taxes yesterday, we used Turbotax. My first time doing my taxes on my own, and I don’t think I will ever pay an accountant to do them again! I had no idea I could write off tax preparation costs for my business…oh well probably wouldn’t have made a big difference, but at least I know for next year!
I just wish they would have income-splitting for those of us who chose to stay home and raise our children…tax on say $100,000 is far more than tax on 2x $50,000!!!! And if there is a child care tax credit, why don’t I get a credit too…once there was a politician in ?Alberta? that wanted to do such a thing…but surprise, he didn’t get elected!
Geesh, already filed? I don’t even think I have every form yet! Better check in case I can get them done and filed as we always get a rather large cheque. And no, dh can’t adjust it any more, but at least interest rates are in the pits so it doesn’t hurt so bad letting the govt keep that money all year.
Susan
Ashley – I didn’t know I could until last year, either!
teachermum – I know, I can’t believe some people have filed already, haha. We have all our papers, but I guess we’re lazy… and kind of scared we’ll end up having to pay. 😛
Hi All,
I would like to file as an independant consultant this year (owning my own business with me as the only employee), what would you recommend as the best online software to suit my situation?
Thanks for your help!
Sarah
Sarah – I think TurboTax is great. 🙂
Hello,
Can anyone explain to me what education amount is about ?! I know that as a student I can’t claim meals and residence fees, so this $400 is a deduction for what ?
Thanks 🙂
Can you file your taxes early? Can you get a refund early with a pay stub?
No, you cannot get a refund early.
I just recently started working- I used to be able to claim rent as an expense as a student and used to get some return. Am I still able to claim rent as an expense or is there no use?
Yes, you can still claim a portion of your rent.
I am an employee of a company, They pay me 1000/mo for me to use my own vehicle. They also pay for my fuel. I use the vehicle about 85% for work.
1) Can i write off my lease payments?
2) How do I report the income for the amount I have been paid?
3) Are there any forms my employer needs to fill out?
I have also been working from home for the last 6mos, is there any way I can write the use of my home office off?
1. Yes, I believe you can. Only a portion, though.
As for the other 2 questions, I am not sure. You will need to check with an accountant.
You can write off your home office, but only a portion of that (I write off 1/5).
i was wondering if we can claim drug receipts on our taxes if we dont pay taxes.my husband is on wsip and i am not working we live on a very low income so i was wondering that ,thanks
That is something you will have to ask an accountant.
If you have non-taxable income such as WSIB or Social Assistance payments (or have no income) then medical expenses such as prescriptions will have no impact on your tax return.
Question: if I’m operating small business from home, I know I can claim a portion of the utilities against income, but what if the bills are in my spouse’s name and not mine?
Thanks for any information!
You will have to pay your spouse from your business expenses for the utilities, then write off that payment that you made to him.
A few years ago there was an incentive type tax deduction for getting off EI or assistance and getting back to full-time work. Is that still available and how much. I still have to do my 2011 tax where I did land a full-time job and cancelled EI.
Scott – I think you are thinking of the Working Income Tax Benefit (WITB). Here is a link that should answer some of your questions about it http://www.cra-arc.gc.ca/bnfts/wtb/fq_qlfyng-eng.html
You should include daycare/day home expenses on the list!
For those of us way up here in the middle of nowhereville you can claim northern living allowance. If you get an annual print out of your hydro bill you will get an extra aprrox 45 dollars per month on the northern live out.
Hi Ive worked with a lady before and she only paid for my EI.She gave my T4 week ago and I asked her where did she put my payments and she dont have my SIN # with her. Is it okay for her to claim me or either way?Thanks.
School Parking–most definetly NOT!
Also you do not claim exact tuition and textbook amounts and tuition expenses…
As a student the deduction you are allowed to claim is a tuition and education amount (the $400/120 referred to in your post). The amounts are calculated by using the form you will receive from your educational institution (a T2202A). There will a provincial amount also figured out (it varies by prov.)
Transit passes – yes, keep the pass AND the receipt which shows the purchases of the pass
Moving expenses are trickier, but are allowed under certain conditions.
The info on Student loans/student loan interest is correct.
Also, students be sure to claim your tuition amounts even if you are expecting to receive a refund as these amounts can be carried forward for many years and used against future income. Also students should file a return even if they don’t have income if they are over the age of 19 as they may be eligible to receive the GST credit. (anyone over 19 may qualify) 🙂
Cassie PLEASE be careful about how you word things in your post. I do love all the information you post here and am extremely grateful to have found your site; however the information you have here today is not fully correct.
Can you claim the interest even if it is a student line of credit loan from a bank? I have been told both yes and no. It is so confusing on this subject.
You CANNOT claim interest paid on student line of credit from bank – the only interest that can be claimed is from government student loans.
There is also a $500 Arts credit for children under 18. This is not the sports credit. This one covers music lessons, art class, photography, public speaking.
Also you can claim your safety deposit box rental costs.
There is a new non-refundable tax credit this year called the Family Caregiver amount. If you care for a family member (including a spouse) who is mentally or physically impaired you may be eligible for this $2000 non-refundable credit which may increase your refund or lower your balance due by $300 (non-refundable tax credits are calculated at 15% so $2000 x 15% = $300).
If there is no disability tax credit on file with CRA you can have your doctor write a letter indicating what your family member’s impairment is and how long it is expected to last and the CRA will likely request to see that.
For more information click on this link: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/fmlcrgvr-eng.html
Thanks for sharing!
Hi! Can you write off Naturopath costs?
Thanks!
If a accountant prepared mytax can I write off the cost? this year i will prepare the tax myself
Yes, you can.
I used my spouses car for my personal business use. Can i use the cost of insurance, wear and tear, etc on the car as a tax deduction?
Thank you
Please contact an accountant about this, I am unsure if you can claim these expenses.
Can I claim baby food or anything to do with my son ? He is only 7 months so I do not have any activity he is in yet.
Thank you
No, you cannot claim baby food.
I do not own a vehicle. I sometimes use rental vehicles for business purposes. I cannot find any info on this for tax purposes. The info in the federal tax guide is for vehicles you own or lease. It would be impossible to fill in the info on each vehicle on the tax forms. What is the situation for rental vehicles?
Bob
You can deduct the cost of rental vehicles used while engaged on business. You do not have to complete the info you would on a personally owned vehicle. Keep all receipt for a minimum of 7 years for presentation to CRA on demand.
In general , all expenses incurred in the pursuit of business income is deductible. Expenses that have a useful life greater than a year are capitalized and depreciated at CRAs stipulated rate. Some expenses ( i.e. meals and entertainment) are subject to further restrictions ( in this case the 50% rule)
Can a T-4 employee deduct on the T-2200 form travel costs for business specifically flights if required and not re-imbursed?
I am not too sure, you will need to ask an accountant.
Can CPPD or ODSP be claimed as income? I’m told that I can’t claim medical because I have no income. But I thought that I read somewhere that CPPD was considered income? I also have a service dog who I’d like to be able to claim some of her expenses.
I believe you can claim it as income, but I’m not entirely sure. You will need to check with an accountant.
I know you can claim medical expenses but you can also claim the money you pay for medical benefits at work. I didn’t know that and was only claiming the extra expenses that were not covered by my work health benefits but then found out that since they deducted money from my pay to pay for a portion of the medical benefits I could claim that I even went back a couple of years and got $800 back.
The money you pay for a health plan can indeed be claimed as a medical expense, but usually, that is indicated in BOX 85 of your T4 if the plan is through your employer.
You cannot claim that amount twice, so be careful not to claim in both box 85 and line 330.
What constitutes as educational expenses, or do you just write off $400 or $120 monthly just for education? and if so where do you write it?
If you are a student in Canada at a post secondary institution, (university or college), you can print the tax forms from your student account. The form you need is a T2202(A). Any unused portion can be carried forward or transfered to a spouse, parent or grandparent.
You would receive a T11D if you were a Canadian student at an American university or college.
There are a few other T11 forms (A, B, C) which can be issued in Canada, but these are the only identifiable tuitions that can be claimed.
Unless it has changed you can also claim expenses for moving to be with a spouse, I believe it is for over 200km.
Just wanted to point out that the deadline for self employed is June 15 not April 15 however if you owe you still need to pay before the April 30th deadline.
Now I have paid for a private medical company to diagnose my wife to see what was making her sick, Can I claim those bills and travel expenses?
It’s possible, but you will need to confirm with an accountant to be sure.
Hi, I’m from Italy and I’ll be in Canada as apermanent worker with my family from July 1st. Actually I got some info about taxes ecc… What I’m not sure is about tax refund for House Rental. Is there any chance to get a refund for Taxes due on the rent with the Income Tax return?
Then, about Parent & Child Tax Write-Offs.
you mean I get $2,089 per child, per year, for each child under 18 living at home as a refund or I can deduct from taxes $2,089?
Thank You!
Luca
Hi Luca! To my knowledge, you can only write off rent if you’re a student or business owner (and even then, you can just write off a portion).
As for child tax benefits – yes, that is the amount per child, per year (give or take). 🙂
You mentioned “For individuals moving or relocating for a job…”, that also includes plane fare, right?
If so, I can’t figure out where to put the amount in my uFile. Would appreciate any advise. Thanks…
Yes, that includes plane fare. I am not sure where to put this amount though, so I suggest visiting this page: http://www.drtax.ca/en/UFile/help-support/faq.aspx
Hi,as a tfw paying for my own flights how do I claim them as a deduction and can I get child care credit if my kids still live in the states
The worst is that most people give the government an interest-free loan all year long for no good reason.
If you have child care expenses, make regular rrsp contributions, make regular charitable donations, etc., you can request that your taxes at source be adjusted so your employer takes less in the first place.
If your employer said, “hey, I’m going to keep a few hundred dollars of your paycheque every month, and then give that money back to you at the end of the year. No, no interest,” would you be okay with that? Why let the government do the same? Check out http://www.cra-arc.gc.ca/E/pbg/tf/t1213/README.html
Thanks, Melissa!
Actually you get 3% interest from the government if they are holding money due to you.
I cannot find work as a teacher in the community I live in so I took a job at a remote school 3.5 hours away. I need to rent a separated apartment and pay for commuting each week. It is not possible to have my family move to this remote community as there is a lack of resources for our child. Can I claim any of these additional costs for living out of town in a remote community?
Hmm, that is a very good question. Your best bet is to contact an accountant, as they will be able to give you a better answer than I could.
Moving expenses yes. Commuting no. Rental no. Possibly something available if you are living in the far north. Otherwise you’re probably hooped.
Any info on school transportation costs?
My son was accepted to an arts school however it is not in our town so bussing is not provided.
We pay a bussing company to transport him to and from school.
He is in grade 5, so this is not university or college related.
Any info would be appreciated.
Lisa
what is a reSONABLE tax course for A SINGLE MALE. THANKS
Are coupons, or discounts ( such as E-codes) tax deductible for incorporated company?
I’m confused about things like a computer keyboard $29.95, or a small coffee maker, or an $89.00 printer. Do all of these really need to be fixed assets. In the USA if the cost is under $100 you can expense it. Is there a threshold something like that here in Canada? Thanks.
I moved out from an apartment I was renting to my parents (2015). I am using a storage unit to keep my belongings in. I plan to start up a business this spring (2016). I was wondering under the moving expense tax credit can I claim my storage unit as a deductible for 2015?
I used to walk to work until my company shuy down my local dispatch area. I had to buy a car to travel to another city to start my work day. Is there any way to claim this new expense?
Thanks
Hi Cassie,
For business under Research & Development, the Canadian government has actually provided us with a program for cash refunds and tax incentives. This program also goes by various names such as SR&ED or SRED, R&D (Research & Development) Tax Credit, Research Tax Credit, R&D Credit, Research & Experimentation Tax Credit, Investment Tax Credit, R&D Funding. With the current pandemic, the government has been pushing for additional support for these kind of programs to help sustain current projects and help business stay afloat to fight Covid 19.
Medical expenses for prescription drugs. Is the whole amount charged tax deductible or only the portion not refunded by private insurance company? The part that you pay cash for?