The rising living expenses and inflation are putting hardships on a lot of Canadians. Tax credits and tax deductions can help minimize the load on your finances. Also, they put more money in their pockets by saving on taxation. Every cent you can save on tax is a dollar more you have to spend on necessities. When tax slips come and the May 1 deadline draws near, Canadians are collecting their T4s and receipts, but many may not be aware of the tax deductions and tax credits for 2023 that are available to them. Moving, medical, and child care costs, charitable contributions, as well as certain news subscriptions, can all be used to offset tax payments.
This article will highlight some tax deductions and credits in 2023 that Canadians can avail of and save money. Alternatively, you can avail of tax preparation services from Billah & Associates.
5 Canadian Tax Credits and Tax Deductions for 2022-23
Some deductions and credits are available by design and apply automatically. The GST/HST tax credit, which would be automatically allocated depending on your family income, is a nice illustration of this.
As you file your returns, you must manually claim other tax advantages, such as the home office tax credit and the Canada Child Benefit. Basically, the goal is to save money using tax deductions and credits in 2023.
Some of the top tax credits and tax deductions include:-
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GST/HST Tax Credit
Families with children are eligible for the Goods and Services Tax/Harmonized Sales Tax Credit (GST/HST Credit), a refundable sales tax credit. Its purpose is to assist Canadians with low to moderate incomes in offsetting the taxes they pay on consumer products and services.
The GST/HST credit is disbursed by the Canada Revenue Agency every quarter. Most of the time, even when you have no income to declare, all you need to do to be eligible for the GST/HST credit every year is to submit your taxes on time. Under its new Affordability Plan, the CRA suggests tripling this benefit over six months in 2022.
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Canada Workers Benefit
Low-income Canadians can apply for the refundable tax credit known as the Canada Workers Benefit. Wherever you live, your marital status, and if you have children, all have an impact on how much you get. Individuals are entitled to $1,395 and families are entitled to $2,403, according to the CRA. It’s crucial to remember that “the maximum basic CWB amount will vary for residents of Quebec,” according to the CRA.
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Work From Home Expenses
The Work from Home Tax Rebate is a very well-liked credit that the CRA implemented starting in 2020 in response to the boom in remote work brought on by the internet. For the tax year 2021, the CRA increased the maximum flat-rate employment expenditure deduction for all workers who work from home from $400 to $500.
If your employer signs the new T2200-s, “Declaration of Conditions of Employment for Working at Home Due to COVID-19,” you might be eligible to claim more than the flat rate account. This form details all of the expenses you may deduct as well as any refunds you may have received.
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Home Buyers’ Amount
Tax preparation services can help to figure out if you are eligible for the Home Buyers’ Amount (HBA). You may be entitled to a tax credit of up to $5,000 if you or your partner or common-law partner bought a qualifying house in Canada in the previous year. This credit will reduce the total amount of federal tax you must pay.
The only catch is that you must be a first-time house buyer, which the Canada Revenue Agency (CRA) describes as a person who has never lived in another property owned by you or your spouse in the year of the purchase or in any of the four years prior. The federal budget asks for a $5,000 to $10,000 increase for 2022; if approved, the tax incentive will thereafter be worth $1,500.
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Capital Loss Tax Deduction
In 2022, the financial markets underperformed, and many Canadian investors saw their investments lose money. You can offset these losses against any other investment income for the year, which is fantastic news.
The capital loss tax credit may lower your capital gains tax obligation, but you can’t use it to offset your income tax obligation. You can preserve the remaining capital loss tax credit. You can utilize it in future years if you’ve completely eliminated your capital gains tax due (or up to three years prior).
Conclusion
Canadians can use certified tax software to file their returns for income taxes online or on paper. Some of these services might be of assistance by outlining potential tax credits.
The truth is that numerous tax credits go unutilized. As of August 2022, unclaimed Canadian tax refunds totalled more than $1.4 billion. If you’re unsure of the tax credits you qualify for, hire tax preparation services. Even while your accountant may charge upfront fees, you might end up saving much more than that. Contact us today. We provide tax filing services in Mississauga, Etobicoke, Brampton, Toronto, and the rest of GTA.
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