The days are getting longer, the average temperature is finally above zero, and everyone has a skip in her step—tax season has arrived!
Some people begrudge tax season, anticipating huge tax bills coming down the pipeline. One year, I actually owed the government money and I promised myself that would never happen again. With some planning and familiarization with available tax credits and benefits, anyone can turn this time of year from a burden to a benefit.
Wouldn’t you like to get hundreds or thousands of dollars back from the government? Well you’re in luck! I’ve compiled a handy list of the most popular tax credits and benefits you can claim against your income so that a few weeks after you file your return, you’ll get a nice cheque coming to you.
Child Fitness Tax Credit
Okay, okay, I don’t actually have children, but if I did, I’d put them in a “prescribed program of physical activity” (pee-wee soccer, T-ball) and claim up to $500 in fees.
Low Income Tax Credit AKA the Working Income Tax Benefit
Tax relief for low-income earners.
Medical Expenses Tax Credit
As if universal healthcare isn’t awesome enough, Canadians who have sustained significant medical expenses for themselves or their dependants can claim those expenses.
Tuition Tax Credit
The Tuition Tax Credits are not just for keg-standing college co-eds, I claim them for my continuing education writing courses. It feels like the government is paying me to learn stuff I actually want to learn in my spare time.
Public Transit Passes Tax Credit
Every time the TTC raises its fare, a baby angel cries. The only thing that makes me not want to curl up into a ball each month I fork over $126 for a bus pass is that I can get back 15% of the cost as a tax refund.
Contribute to Your RRSP
A personal favourite of mine, the big fat refund from contributing to your RRSP is quite satisfying. I liken maximizing your RRSPs each year to a triple-threat: your forcing yourself to save for your first home purchase or retirement, you get back some of that money The Man skimmed off your paycheck, and you get yet another opportunity to invest some cash (for more info on this, please see my ABCs of RRSPs and TFSAs article).
First-Time Home Buyer’s Tax Credit
When I was buying my first place, the rate at which my bank account drained of any signs of life made me physically ill, and I’ll admit it, a bit depressed. But, I have a roof over my head, so I guess it worked out. What helped me swallow the expensive pill of home purchasing was the $750 tax credit coming my way. No, that didn’t even cover my lawyer fees, but yes, I’ll take it!
I heard through the grapevine that you have up to 5 years to claim your donations, so it’s probably makes more of an impact if you let the receipts accumulate to at least $200 and then claim away. Be rewarded for your kind heart!
I made my first Important Art purchase this year. Art isn’t just for rich people. Galleries regularly accommodate payment plans if you can’t afford to drop thousands of dollars in one go. I negotiated a four-month payment plan and the gallerist assured me that it’s common practice. He also gave me the heads up that my piece is part of a sought-after series and that if I wanted to donate it to a museum, I could get back the current market price from the government at tax time. How cool is that? I’m not letting go of this piece anytime soon, but it’s definitely good to know.
What are some of your most-used tax credits and deductibles?
Written by M. Alice Allen