Tax Credits and Tax Deductions

tax credits and tax deductions

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 May 1 deadline draws near, Canadians are collecting their T4s and receipts, but many may not be aware of the tax deductions and tax credits for 2024 that are available to them. Moving, medical, and child care costs, charitable contributions, as well as certain news subscriptions, can all be used to offset tax payments.

This article will highlight some tax deductions and credits in 2024 that Canadians can avail of and save money. Alternatively, you can avail of tax preparation services from Billah & Associates.

5 Canadian Tax Credits and Tax Deductions for 2024

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 2023.

Some of the top tax credits and tax deductions include:-

  1. 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.

  1. 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.

  1. 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.

tax deductions 2023

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.

  1. 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.

  1. 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).

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, Etobicoke, Brampton, Toronto, and the rest of GTA.

Related search:

Billah and Associates Inc. is a name you can trust for skilled, detail-oriented Accountant Mississauga and the surrounding Greater Toronto Area.