The rising living expenses and inflation are putting hardships on a lot of Canadians. Tax credits and tax deductions can help minimize the load on your finances. Also, they put more money in their pockets by saving on taxation. Every cent you can save on tax is a dollar more you have to spend on necessities. When tax slips come and the 1st May deadline draws near, Canadians are collecting their T4s and receipts.
However, not many aware about tax deductions and tax credits in 2024 that they might be eligible. Moving, medical, and child care costs, charitable contributions, as well as certain news subscriptions, can all be used to offset tax payments.
In this post, we have shed insight about top tax deductions and credits in 2024 that Canadians can avail of and save money if eligible. Alternatively, you can hire tax preparation services from Billah & Associates if you prefer not to DIY.
Some deductions and credits are available by design and apply automatically. The GST/HST tax credit, which would be automatically allocated depending on your family income, is a nice illustration of this.
As you file your returns, you must manually claim other tax advantages, such as the home office tax credit and the Canada Child Benefit. Basically, the goal is to save money using tax deductions and credits in 2024.
Some of the top tax credits and tax deductions include:-
GST/HST Tax Credit
Families with children qualify for the Goods and Services Tax/Harmonized Sales Tax Credit (GST/HST Credit), a refundable credit for sales tax. It aims to help Canadians with modest incomes by reducing the taxes they incur on consumer goods and services.
The GST/HST credit is disbursed by the Canada Revenue Agency every quarter. Most of the time, even when you have no income to declare, all you need to do to be eligible for the GST/HST credit every year is to submit your taxes on time. Under its new Affordability Plan, the CRA suggests tripling this benefit over six months in 2022.
Canada Workers Benefit
Commencing on January 12, 2024, eligible Canadians will begin receiving the Advanced Canada Workers Benefit (ACWB) from the Canada Revenue Agency (CRA). The ACWB is designed to offer financial assistance to eligible individuals and their families with lower incomes. Depending on income levels, qualifying single workers can receive support of up to $1,518, and families may be eligible for up to $2,616 in assistance.
Work From Home Expenses
The CRA introduced the Work from Home Tax Rebate in 2020, gaining popularity due to the surge in remote work facilitated by the internet. For the tax year 2023, the CRA increased the maximum flat-rate employment expenditure deduction for all workers who work from home from $400 to $500.
If your employer signs the new T2200-s, “Declaration of Conditions of Employment for Working at Home Due to COVID-19,” you might be eligible to claim more than the flat rate account. This form details all of the expenses you may deduct as well as any refunds you may have received.
Home Buyers’ Amount
Tax preparation services can help to figure out if you are eligible for the Home Buyers’ Amount (HBA). “If you or your partner purchased a qualifying house in Canada last year, you may claim a tax credit of up to $5,000.” This credit will reduce the total amount of federal tax you must pay.
To qualify, you must be a first-time homebuyer, as defined by the Canada Revenue Agency. Having not lived in a property owned by you or your spouse in the year of purchase or the previous four years. The federal budget asks for a $5,000 to $10,000 increase for 2022; if approved, the tax incentive will thereafter be worth $1,500.
Capital Loss Tax Deduction
In 2022, the financial markets under performed, and many Canadian investors saw their investments lose money. You can offset these losses against any other investment income for the year, which is fantastic news.
The capital loss tax credit may lower your capital gains tax obligation, but you can’t use it to offset your income tax obligation. You can preserve the remaining capital loss tax credit. You can utilize it in future years if you’ve completely eliminated your capital gains tax due (or up to three years prior).
Child Care Expenses Deduction:
The Child Care Expenses deduction is a lifesaver for parents who need to juggle work and childcare. It lets you claim a portion of your childcare costs, like daycare or babysitters, as a deduction on your taxes, helping to ease the financial burden of raising kids while working. The deduction only applies to eligible childcare expenses and has limits on the amount you can claim.
Canada Child Benefit (CCB):
The Canada Child Benefit (CCB) is like a little extra help from the government for families with kiddos under 18. It’s a monthly payment that’s based on your family income and the number of children you have. So, it’s a nice boost to the budget that can help cover things like groceries, school supplies, or family outing. While the CCB is paid monthly, it is important to note that you need to apply for it and it is not considered “extra help” but rather a benefit based on your eligibility.
Medical Expenses Tax Credit:
The Medical Expenses tax credit, a beacon of hope for anyone facing hefty medical bills. Basically, it lets you claim a chunk of your medical expenses on your tax return, which can include everything from prescriptions to dental work to travel expenses for medical treatment. It’s a nice little break on your taxes for all those times you’ve had to shell out for health-related stuff. You can only claim eligible medical expenses and only if they exceed a certain threshold.
Conclusion
Canadians can use certified tax software to file their returns for income taxes online or on paper. Some of these services might be of assistance by outlining potential tax credits.
The truth is that numerous tax credits go unutilized. As of August 2022, unclaimed Canadian tax refunds totalled more than $1.4 billion. If you’re unsure of the tax credits you qualify for, hire tax preparation services. Even while your accountant may charge upfront fees, you might end up saving much more than that. Contact us today. We provide tax filing services in Mississauga, Etobico*ke, Brampton, Toronto, and the rest of GTA.
Related posts:
- Corporate Tax Filing Tips in Canada
- When are Taxes Due Date in Canada
- Benefits of Filing Tax Returns on Time
- Top Tax Deduction Tips For Business
