The Canada Revenue Agency (CRA) offers countless tax breaks to taxpayers. However, most people miss the most common ones. The tax deadline is approaching, so it would be best to know about the tax deductions that are often missed to reduce your taxes payable.
If you qualify for these tax breaks, you will have more money in your pocket when tax season is over. Here are four tax breaks you might miss in recent tax years.
1. Medical expenses
Canadians are familiar with medical expense claims. However, like private medical insurance premiums, a lot of them are tax deductible, in case you didn’t know. You can also claim tuition fees for children with disabilities. If you need to do home renovations to improve mobility or access, the CRA allows you to claim such an expense.
If you are seeking medical treatment in a clinic or hospital more than 40 kilometers away, your travel expenses are also tax deductible. Remember, you can also get tax breaks on prescription contact lenses or glasses, dentures, and dental implants.
2. Union or professional dues
Members of trade unions or professional organizations can claim union dues or professional fees at tax time. Be sure to keep receipts as documentary proof. Even the certification or licensing exam fees for a profession can be considered tuition fees. The CRA clarifies that expenses reimbursed by employers are not eligible expenses.
3. Interest on student loans
One non-refundable credit that taxpayers typically overlook is interest paid on a student loan. However, a line of credit or a personal loan to finance education is not eligible. Only student loans received under the Federal law on student financial assistance and Canada Student Loans Act Is eligible. You can defer this loan interest for up to five years.
4. Charitable donation tax credit
Generous Canadians Get Tax Relief for Charitable Donations. You can claim the charitable donation tax credit if you donate to an eligible donee. The tax credit could reach up to 33% of the supply at the federal level. An additional duty of 24% is possible depending on your province of residence.
For tax-conscious Canadians
Tax-conscious Canadians can further reduce their tax burden by maximizing their Tax-Free Savings Account (TFSA). Your TFSA is a great tool for generating tax-free income. Maximize your annual contribution limits each year if finances allow.
Brookfield Real Estate Partners (TSX: BPY.UN) (NASDAQ: BPY) is a high income stock that fits well in a TFSA. This real estate share is trading at $ 22.23 per share and pays a very high dividend of 7.55%. An investment of $ 6,000 will produce $ 453 of non-taxable passive income in a TFSA. Current shareholders are up 23.03% since the start of the year.
The diversified $ 20.66 billion global real estate company owns and operates one of the largest real estate portfolios in the world. Durable assets include offices, commercial properties, multi-family, industrial, hotel, triple net leases, student housing and manufactured homes.
The goal of management is simple and straightforward. The company acquires high quality assets in resilient and dynamic markets. All investments should generate attractive long-term returns on equity (12% to 15%). It aims to achieve the goal through stable cash flow, asset appreciation and annual distribution growth in line with earnings growth.
Make your tax preparations profitable
Please make your 2021 tax preparations worth it by not neglecting the four tax breaks under your nose.
The ARC post: 4 Tax Breaks Most People Missed appeared first on The Motley Fool Canada.
Foolish contributor Christophe Liew has no position in any of the stocks mentioned.
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