Each year many Canadians loathe the approach of tax time and worry about receiving a hefty tax bill after everything is submitted and filed.
Fortunately, there are many tax deductions available to Canadians – most you probably haven’t even heard about.
The accountants at Liu & Associates know taxes and want to help you save money every year. Here are 5 costs you didn’t know were tax-deductible:
1. Child Care Expenses
Most Canadians know that childcare expenses can be claimed on income tax, but that deduction extends beyond just daycares and in-home sitters.
Hired caregivers, day nursery schools and centers, educational institutes that provide childcare services, day and overnight camps and boarding schools are all considered tax-deductible.
As long as the primary purpose of any of these services is to provide childcare, they can be claimed on your taxes.
2. Moving Expenses
If you are required to move because of your work, business, or for school, you may be able to claim costs associated with relocating to a home at least 40 km closer to the new workplace, business, or school.
You may also be able to claim travel costs such as accommodations, meals and vehicle expenses as well as additional expenses related to selling your home and purchasing a new one and connecting and disconnecting utilities.
When you are moving for a job or business, eligible moving expenses are deducted from the income earned at that location. Any excess can be carried forward to the next year’s tax return.
Tax credits for moving are non-refundable, meaning that they only count against taxes owing and you will not receive a refund from any unused amounts.
3. Dependents
Dependants are family members, and not just immediate ones, with mental or physical disabilities that depend on you for care.
If you have dependent family members, you are eligible for two tax credits:
Home Accessibility Tax Credit (HATC)
This non-refundable tax credit covers goods or renovations related to an individual who is eligible to claim a disability tax credit or is over the age of 65. For example, if you were responsible for the care of an elderly parent in a wheelchair, you could claim the cost of installing a wheelchair ramp.
Canada Caregiver Credit (CCC)
If you taking care of a family member or eligible relative outside of the national health care system who depends on you due to a mental or physical disability, you can claim this credit on your taxes.
4. First Time Home Buyers
In order to encourage young Canadians to purchase homes, the Canada Revenue Agency (CRA) offers a tax credit when buying your first house.
The First Time Home Buyers’ (FTHB) tax credit can be used to claim legal fees, disbursements and land transfer taxes. Up to $5000 can be claimed as a non-refundable tax credit.
There are also grants available from provincial governments such as a property transfer tax grant and property tax grants.
If you are interested in seeing what grants are available for you, please contact our expert accountants at Liu and Associates for more information!
5. Medical Expenses
There are many medical expenses beyond prescriptions that can be claimed on your taxes.
For example, travel costs for medical procedures greater than 40 km from your home can be claimed – as long as the necessary medical services are not available near you.
The cost of service animals trained for individuals who are blind, deaf or have Autism, epilepsy or diabetes can be claimed on taxes, as long as the animal is procured through a recognized provider. The claimable costs include the cost of the animals as well as veterinary bills and food. This deduction does not apply to emotional support animals.
Medical marijuana is also a claimable deduction on your taxes, as long as it is authorized for medical purposes and purchased from a designated producer.
Click here for more medical expenses that are tax-deductible.
And There’s More!
These are just a few of the lesser known costs that can be claimed on your yearly tax return.
Contact us today to learn more about tax-deductible costs that can save you money!