7 tips on saving taxes.
Childcare expenses and family benefits - Include, daycares, summer camps, overnight boarding schools, and in-home providers like nannies. You need to file your taxes every year to continue receiving family benefits like the GST/HST benefit and the Canada Child Benefit (CCB).
If you’re self-employed and use your car to earn business income, you may be able to claim vehicle-related expenses like gas, insurance, licensing and registration fees, maintenance and repairs, leasing costs, and interest on money borrowed to purchase a car. You can also claim vehicle expenses if your employed and the company you work for needs you to run errands. Keep the km driven for all trips to calculate business from personal portion.
Union/Professional dues and other employment expenses - most professional association fees and union dues can reduce your taxable income. for example, professional board dues, trade union membership fees, and insurance premiums related to your profession.
for employment expenses, It's possible to deduct cell phone bills and
office supplies as long as your employment contract required you to purchase
these items and you don't receive an allowance for them. Unfortunately you can
not claim things like, tools, clothing, and travel cost to and from work.
4. Registered Retirement Savings Plan Contribution (RRSP) - Contributing to you
RRSP is an excellent way to lower your tax bill or get a tax refund. The deadline to
contribute for 2021 tax year is March 1, 2022.
5. Medical Expenses - From Dental Checkups and laser eye surgery to orthopedic
shoes and private insurance premiums, The CRA allows you to claim a variety of
medical expenses as non-refundable tax credits. Keep all your receipts,
prescriptions, and other supporting documents in case CRA wants to see them
later.
6. Simplified home office deductions - Many Canadians are working from home
due to the past year pandemic. If you qualify, you could use the CRA's New
temporary flat rate method, which allows you to claim $2. for each day you
worked from home, up to a maximum of $400.
The following must be met to qualify:
you worked from home in 2021 for reasons related to COVID-19 or your employer required you to work from home.
You worked from home for more than 50% of the time for at least 4 consecutive weeks in 2021.
Expenses claimed on income tax were work related during this period.
If you decided to use the detailed method, a completed and signed form T2200
from your employer is required. on the detailed method you have to indicate the
size of your workspace and keep supporting documents.
7. Interest paid on Student Loan - CRA lets you claim interest paid on student
loans. These are interest paid on Canada Student Financial Assistance Act, the
Canada Student Loans Act, and equivalent provincial or territorial programs.
You cannot claim interest on personal loans, lines of credit, or student loans
from foreign banks or home equity line of credit.
The interest paid on student loan is a non-refundable tax credit. It can only be
used to lower your tax bill and cannot be used to receive a tax refund. The
interest can be carried forward up to 5 years, so it might be wise to save your
claim for a year when you owe a lot of tax.
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