Tax season can be a stressful time of year and for many Canadians, the tax filing deadline seems to come out of nowhere. It’s understandable then, that in the hurry to file, many valuable credits and deductions are missed; in fact, Canadians leave millions of dollars in unclaimed amounts on the table each year.
To make sure you’re prepared for this tax season, take a few minutes to go through the list below; you just might find a credit or deduction (or two) you didn’t realize you could claim.
As a rule, moving expenses can’t be claimed on your return except for specific situations. For example, if you moved to start a new job or to attend a post-secondary institution as a full-time student, you might be allowed to claim the amounts you paid to move (within reason, of course). Sure, if either of these situations applies to you, you can claim the cost of renting a moving truck or hiring movers, but did you also know you can claim the cost you paid to buy your new home (like legal or notary fees) or to maintain your old home while you’re trying to sell it?
For more information, check out our article, Moving expenses.
When most people’s thoughts turn to medical expenses, they most often think of things like the cost of dental cleanings, prescription medications, and eyeglasses. The truth is, there are many different medical expenses that you’re able to claim as long as your doctor has signed off on them. For example, you might not have known that things like an air conditioner, furnace, electrolysis, and gluten-free products can all qualify as a medical expense under the right conditions.
Note: You can also claim the premiums you paid during the year for private medical coverage.
For more information, check out our article, Medical expenses.
Student loan interest
Nobody enjoys the burden of repaying a student loan. Thankfully, the Canada Revenue Agency (CRA) lets you claim a tax credit for interest you paid on your federal and provincial student loans. Be careful however; you can’t claim this credit for the interest you paid to a private lender (as you would if you took out a student line of credit from your bank) or if you consolidated two or more of your student loans.
Depending on your income level and personal situation after you graduate, you might not need to claim all of the student loan interest you paid on this year’s return. If that’s the case, you can carry forward any unused amount up to 5 years for use on a future return.
For more information, check out our article, Student loan interest paid in 2016 or interest not claimed in a previous year.
Charitable donations, even small ones, can certainly add up over the course of a year. You might already be aware that when you donate to an eligible charity you’re entitled to a tax credit equal to 15% on the first $200 you donate, and a tax credit of 29% on the remainder (up to a maximum of 75% of your income).
What you might not realize is that the CRA lets you hold on to your donation amounts (up to 5 years) and claim them all on a single return so that you can maximize your donations’ impact on your return.
Have you heard of the First-time donor’s super credit? Introduced in 2013, this credit provides first-time donors with an extra 25% donation tax credit on monetary donations up to $1,000 – something to consider if you’re planning on claiming any donations on your return this year.
Public transit passes
Like charitable donations, the amount you pay for transit passes can be considerable by the time the end of the year rolls around. In addition to claiming the cost of your own transit passes, you can also claim this credit for your spouse or common-law partner and your dependants as long as the transit passes allowed for unlimited travel on local buses, streetcars, and subways. Short-term passes can also be claimed.
For more information, check out our article, Public transit passes.
If your child suffers from a learning disability, you can actually claim a credit for the amount you paid for after school tutoring sessions to help them complete their homework or to better understand the day’s lessons. Before you claim this amount, be sure to get written confirmation from your doctor that tutoring is necessary. To be eligible, the tutor cannot be related to the child in any way.
At first glance, most Canadians probably aren’t familiar with what a carrying charge is, let alone whether or not it’s a deduction they can claim on their return. Carrying charges are simply expenses that are associated with financing and investment charges. These can be fees you paid to your investment advisor or interest on loans taken out for investment purposes.
For more information, check out the CRA website.
Home buyer’s amount
If you recently bought a home (and you haven’t lived in a home owned by you or your spouse in the last 4 years) you might be able to claim the home buyer’s amount. This credit lets you claim $5,000 (equivalent to $750 in savings) for the purchase of an eligible home.
For more information, check out our article, First-time home buyers’ tax credit (HBTC).
Union or professional dues not reported on a slip
If you pay union or professional dues, the amount you paid will only be reported on your T4 slip (or RL-1 slip if you live in Québec) if it was withheld by your employer. If you pay your union or professional dues directly to the union hall, you’ll be issued a receipt when you make your payment.
For more information, check out our article, Where do I enter my union or professional dues?
Generally speaking, you can’t claim a tax credit for the amount you paid in rent. There are, however, a few exceptions to this rule. For instance, if you’re eligible to claim one of the following benefits or credits, you’ll be able to claim the rent you paid during the year on your return:
- Ontario Trillium Benefit
- Manitoba Education Property Tax Credit
- Solidarity Tax Credit (residents of Québec only)
- Tax Credit for Home-Support Services for Seniors (residents of Québec only)
If you owned and operated a business out of your home in 2016, you can deduct a portion of the rent you paid that’s related to the workspace you used. For more information, refer to the CRA website.
Working Income Tax Benefit (WITB)
The WITB is a refundable tax credit for low-income individuals and families who have a working income over $3,000. The amount that you’re entitled to receive for the basic and disability supplement amounts (if applicable) is based on your working income and your family’s adjusted net income.
Note: Residents of Alberta, British Columbia, Nunavut, and Québec must meet a different working income threshold in order to be eligible. For additional eligibility requirements, check out our article, Working Income Tax Benefit (WITB).
Solidarity tax credit (Québec only)
The Solidarity tax credit is a refundable tax credit for low-income earners who live in Québec. The credit amount that you’re entitled to depends on several factors including your family income and the number of dependants that live with you. Generally, you have to be at least 18 years old in order to be eligible for this credit – but that’s not always the case. For example, if you’re less than 18 years of age, you might still be eligible to claim the solidarity tax credit as long as you:
- Have a spouse
- Are the parent of a child who lives with you
- Are recognized as an emancipated minor by a competent authority (like a court)
For more information, check out our article, Schedule D: Solidarity tax credit & Relevé 31.