Top Tax Deductions and Credits in Canada: Key Takeaways and Explanations

When it comes to taxes, there\’s no one-size-fits-all solution. The Canadian Revenue Agency (CRA) outlines over 400 deductions and credits to help you get the most out of your taxes and maximize your refund. Here are the top 18 most popular items:

Tax Deductions vs. Tax Credits: Deductions are amounts subtracted from your total income to reduce taxable income, while credits directly lower the tax owed on taxable income. Some credits are non-refundable (i.e. charitable donation credit) and only lower your tax payable, while others (i.e. GST/HST credit) are refundable and can result in a tax refund if the credit amount exceeds the tax owed.

1. GST/HST Credit: A refundable sales tax credit available to families with children to help offset tax paid on consumer goods and services. To receive the credit, simply file your taxes on time.
2. Charitable Tax Credit: A credit available for donations to qualifying donees (registered charities).
3. Self-Employment Expenses: Deductible business expenses for self-employed individuals, such as advertising, vehicle expenses, office supplies, inventory, and business-use-of-home expenses.
4. Work from Home Expenses: A credit for employees who worked from home during the pandemic, allowing up to $500 in employment expenses as a flat rate. More can be claimed with a signed T2200 form from the employer.
5. Canada Workers Benefit: A refundable tax credit for low-income individuals in the workforce, with the amount based on income and family size.
6. RRSP Deduction: Contributions to a Registered Retirement Savings Plan (RRSP) are deductible from taxable income.
7. Medical Expenses: Eligible medical expenses not covered by insurance can be deducted.
8. Tuition and Education Amounts: Credits and deductions available for tuition, education, and textbook expenses.
9. Child Care Expenses: Deductible expenses for child care while earning income or attending school.
10. Moving Expenses: Deductible expenses for moving to start a new job or business.
11. Caregiver Amount: A credit for those who care for dependants with physical or mental impairments.
12. Adoption Expenses: Credits and deductions available for adoption expenses.
13. Public Transit Amount: A credit for public transit expenses.
14. Disability Amount: A credit for individuals with disabilities.
15. Home Accessibility Expenses: Credits and deductions available for home renovations to accommodate disabilities.
16. Caregiver Tax Credit: A credit for caregivers of dependants under 18 years of age.
17. Home Buyers’ Amount: A credit for first-time homebuyers.
18. Business Investment Loss: A deduction for losses from investing in small businesses.

These are some of the most popular tax deductions and credits available in Canada. Be sure to consult with our tax professionals to determine which deductions and credits you\’re eligible for and to maximize your tax refund.