12 Things You’re Not Claiming on Your Taxes—But Should Be
These little-known credits and deductions can make a significant dent in the amount you owe.
What Can You Claim on Your Taxes in Canada?
Tax season is here, and if you’re like most Canadians, you’re looking for ways to minimize the amount owing to CRA after filing your personal income tax return. Fortunately, there are plenty of ways to reduce your tax bill—but you have to know where to start.
Here are 12 income tax credits and deductions you may not be familiar with. For personalized advice, we recommend speaking to an accountant or other financial professional.
Digital news subscription tax credit
If you pay for a digital subscription to a qualified Canadian news journalism organization, you may be able to get a tax credit, says Dean Paley, a Chartered Professional Accountant (CPA) in Burlington, Ontario. This credit allows you to claim an amount based on the cost of any digital subscriptions you hold featuring content that is primarily written news. You can request a tax slip from the news organizations you subscribe to, and the details of this tax credit are available here.
Student loan interest
Are you fresh out of school, or still paying down post-secondary loans? If you paid interest on student loans that were issued under the Canada Student Loan Act, Canada Student Financial Assistance Act or the Apprentice Loans Act—“basically, not a personal loan,” Paley says—you can probably deduct your interest payments. Here are the details.
First-time homebuyer tax credit
Worth up to $5,000, this is a credit worth knowing about if you recently bought your first home. A first-time homebuyer is defined by the CRA as an individual who “did not live in another home owned by you (or your spouse or common-law partner) in the year of acquisition or in any of the four preceding years.” Here’s more information on this tax credit and other incentives for first-time homebuyers.
Deductions for medical expenses
A lot of people don’t realize that the premiums they pay for private health care can be claimed on a personal income tax return, says Paley. “If their benefits coverage plan pays 80 per cent and they pay 20 per cent, they can claim that 20 per cent expense—and it does add up.” He lists braces and glasses as common examples, but even gluten-free food can be claimed by people with celiac disease who have adequate medical documentation. Other qualifying items include mobility aids, dentures, fertility treatments, laser eye surgery and more. Here’s a complete overview of these deductions.
If you’re a self-employed individual who files taxes as a sole proprietor—especially if you work from home—there are plenty of deductions to be made. “You can deduct any expense that helped you make your sales—advertising, liability insurance, some meals and entertainment, travel costs, office expenses and supplies,” Paley explains, adding that you can also deduct expenses related to your utilities, home insurance and more. However, if you’re incorporated and paying yourself a salary, these deductions won’t apply.
Disability tax credit
“One [credit] that a lot of people don’t know about is the disability tax credit,” Paley says, explaining that the large range of conditions that apply aren’t all the same as what’s labelled a disability from a purely medical point of view. Paley notes that the credit is easy to apply for and can be worth up to $9,000. “It can be quite helpful in terms of offsetting some of the costs of various disabilities, and you can claim it for yourself, your spouse, your dependents or even parents that rely on you for support.” Here’s a look at the criteria for the disability tax credit.
Canada caregiver credit
This credit is available to any qualifying individual who supports a spouse, common-law partner or dependent (for example, a child or aging parent) with a physical or cognitive impairment. The amount you can claim is determined by your relationship with the person you’re providing care to. “It’s one that can be quite confusing to apply for, but a lot of people do qualify and they’ve made it a little easier to claim than in the past,” Paley notes. If you think you may qualify for this credit, consider reviewing the full details here.
Eligible educator school supply tax credit
If you’re an educator who bought school supplies out of pocket this year, this credit could be helpful. “Qualifying teachers and Early Childhood Educators can be credited for many classroom expenses,” Paley says, pointing us to this credit, which can be claimed to a maximum of $1,000.
Moving expenses deduction
Not every moving expense is deductible, but if you relocated more than 40 kms to be closer to your work or school (full-time studies only), you may qualify for a tax break. Both traditionally employed and self-employed individuals may qualify. Here are the full details.
Child care costs
Daycare bills are no joke, so be sure to claim them on your income tax return. You can also claim the cost of before and after school care, summer camps and other qualifying child care expenses. There are additional personal income tax deductions related to child support, adoption fees and other family expenses. A complete overview of these credits is available here.
Investment fees and carrying charges
Accountant fees, investment broker fees, even the cost of having your taxes done professionally—you can often claim these costs against your investment income. Canadians can also make deductions based on loans taken out for investment purposes. “If you borrowed to invest—for example, if you took out a loan and purchased some investment properties—you can claim that interest as a deduction on your tax return,” Paley says. The only caveat is that if you used the loan for things other than the investment property, the full interest amount isn’t eligible—just the interest on the amount used for your investment. Also, if you lost your job and had to pay a lawyer to help you recover severance fees or other money owed, you can write off those legal costs. Here’s a complete overview.
If you’ve donated money to any accredited charities throughout the year, save those receipts. “This credit is pretty straightforward,” Paley says, and you can include any unclaimed donations made in the last five years. Here’s more information on claiming this common (but often overlooked) tax credit.
Next, check out one financial expert’s take on what’s wrong with Canada’s tax system.