The Most Often Missed Tax Deductions
You might know the basic tax deductions you can get. Your RRSP contributions and that $20 donation receipt gets you something back, but there’s not much else that’s relevant for you… Right?
Well, that may not be the case; every year Canadian’s miss out on millions from the more than 400 potential deductions. No one has time to sort through all 400, so here’s a list of some common deductions that are often missed.
First Time Home Buyers Credit
You bought a new home. Congratulations! Now you’re broke.
Luckily for you CRA offers a tax credit for first time home buyers. This will get you $750 back. So you can at least afford to eat for a while.
Moving Expenses (Students Too)
If you made a move to a new city for work recently, you’re likely eligible for tax deductions. A lot of deductions.
As long as the move is over 40km almost all expenses related to the big move can be used. These include small costs like replacing your driver’s license and bigger ones such as costs related to house sale and purchase.
An even more commonly missed aspect is moving costs for students. As long as the student had to move the same 40km for school, moving expenses should be claimed. A student who moves back home for the summer may even get the deductions twice a year!
The most money stands to be lost if you miss some of the potential moving deductions. We recommend getting an accountant to look into this one.
Interest on Student Loans
The Canadian government is encouraging you to hold onto your old student loans I guess. Any interest you paid during the year can be deducted. So don’t feel bad about still owing, it’s good for your taxes.
Medical & Dental Premiums
It might be common knowledge that you can deduct medical and dental receipts. But the catch is that you must have spent over a certain amount in the year to be able to deduct any ($2K or 3% of income). Many people don’t quite get there, or at least they think they don’t.
Don’t give up hope on medical though. Many people aren’t aware that they should include private health care and dental premiums they paid personally or through their work. This could put you over the limit, make sure to include it in your total.
Childcare Expenses
Children are expensive. I’m sure you thought they would be saving you more taxes at this point. Well maybe they could. Most parents have heard that they can deduct childcare expenses like daycare, but did you know that anything can be a childcare expense…
Anything that was a full day or overnight activity that is. This includes activities like summer camps and sports training. Make sure the receipt shows the length of the activity.
Professional Exam Fees
If you were working towards or completed a professional exam in the year, make sure to claim your exam fees. This counts for different professions including the trades.
You can also often use training and courses required for the exam. Anyone who has wrote a professional exam knows how much these can add up to. Just make sure to check with the training providers, they should be able to issue you a proper tax receipt.
Automobile Expenses
You don’t have to own your own business to claim auto expenses. If you have to drive all the way out of town to meet with THAT client, you can probably claim automobile expenses.
As long as you paid your own auto expenses and are sometimes required to work outside of the office you can deduct a portion of expenses such as gas, maintenance and insurance. You will need to get your boss to fill out a form though (T2200). Try to keep track of your mileage and hold onto your receipts to support this one.
Did You Miss Something?
No need to worry, that money is still yours. Previous tax returns can be adjusted up to 10 years back.
If you missed something or maybe just wonder about those other 399 deductions, some accounting firms like Virtual Accountant, will review your prior returns for free.
Just make sure to thank them for all the money you get back.