Common Canadian Tax Credits and Deductions

With Tax Season just around the corner we at Team Tax thought it would be nice to share some common Tax credits and deductions for your 2020 T1 Personal Tax Return.

  1. Donations – Tax Credit

If you made any donations from 2018-2020 and haven’t reported these donations on your previous tax returns, you may be eligible for a 15-25% tax credit. You can search for a list of eligible charities, here.

  1. Medical Expenses – Tax Credit

If you paid out of pocket for medical expenses, you may be able to claim a portion or all of those expenses. You can claim the lesser of 3% of your net income (Line 23600) or $2,397. Eligible medical expenses available, here.

  1. Interest on Student Loans – Tax Credit

The interest you paid on your student loans is a separate tax credit then your tuition credits (tuition paid in the year). These credits can be used to reduce your tax liability and increase your refund amount if you worked in the year.

  1. Basic Personal Amount – Tax Credit

The CRA provides Canadian Residents a basic personal amount credit for $13,229 in 2020. This means that the first $13,229 you earn in Canada is tax free!

  1. Union Dues – Tax Deduction

If you paid any union dues in 2020, you could claim a dollar for dollar deduction for the amount you spent. For example, if you paid $500.00 in Union dues, you could claim a deduction for $500.00, reducing your taxable income by the same amount.

  1. Rental Expenses – Tax Deduction

If you rented out your basement or investment property in 2020 you can claim multiple deductions to reduce your rental income. Some common deductions include utilities, internet, property maintenance and interest on mortgage payments. Contact us today for a complete and more detailed list of deductions, we ensure to maximize your after-tax cash.

  1. RRSP Contributions – Tax Deduction

You have until the end of February 2021 to contribute towards your RRSP, which can be applied against your 2020 or 2021 taxable income. Consulting a Tax Professional will ensure your RRSP tax deductions is applied against your taxable income in the year you made more. This means more after-tax cash in your pocket, which can be used to reinvest into yourself or your brand.

  1. Child Care Expenses – Tax Deduction

Did you know you can claim childcare costs you paid for nursery schools, daycare centers, caregivers such as nannies, overnight boarding schools and camps that provide lodging, day camps and day sports schools. Contact us today to determine if you are eligible to claim these expenses, we determine both your child and your expenses eligibility.