It’s often said the only things certain in life are death and taxes. What’s less certain is how big your tax refund will be this year. Here are some tips to ensure you maximize your refund by minimizing lost savings.
Prescription: Tax credit
Dealing with illness can cost you emotionally, physically, and financially. If you, or your spouse, common-law partner, or dependants, had to shell out for medical expenses in 2016 you might be able to claim those expenses on your taxes this year, says David Rotfleisch, a Toronto-based tax lawyer in a phone interview with Yahoo Canada Finance. The medical expense tax credit covers a wide range of items and services, including everything from prescription medications to rehabilitative therapy to walking aids.
Show me the receipts
Shoving your way onto a crowded bus, streetcar, or subway to commute to your 9-to-5 gig can be dispiriting. But, hey, at least you can get a tax credit for riding public transit, right? Most transit passes can be claimed for you, your spouse and any dependant children under 19, says Evelyn Jacks, a Winnipeg-based tax and personal-finance expert, in a recent phone interview. Generally, any passes that are at least a week long in duration are eligible. Sorry — single transit rides and your Uber habit are not covered. If you claim this federal tax credit the government advises keeping your passes and receipts to support your claim.
Study up on your taxes
It can be worth cramming for tax season. Post-secondary students can usually claim tuition, education and textbook amounts. Parents and students should consider sitting down and doing their taxes together to figure out the best strategy, advises Jacks. The credit can be transferred from students to parents to reduce net, and thus taxable, income. If you never filed for your credit when you were a student you might be able to claim that credit the first year you would otherwise have to pay tax, according to the CRA. The education and tuition credits have been eliminated going forward, but you can still claim them on your 2016 return.
Celebrate moving with beer, pizza, and a tax break
Packing boxes, loading up the moving truck only to have to unload the moving truck and unpack the boxes on the other end is a slog, and can be expensive. If you moved for school and work in 2016 you might be able to claim some of those expenses. You must have moved at least 40 kilometres away for school or work, according to the CRA. Eligible moving expenses could include transportation, storage costs, travel expenses, temporary living expenses, cost of cancelling a lease, cost of maintaining your old home while vacant, cost of selling and buying a home, and other incidental costs.
Giving to receive
Giving might be its own reward, but the government also rewards first-timers in a bid to encourage charitable giving. The First-Time Donor’s Super Credit will expire at the end of this year – so you should take advantage of this credit soon if you qualify, advised Kevin Stienstra, a senior manager of domestic tax services, for Grant Thornton LLP in Beamsville, Ont. The current Charitable Donations Tax Credit will get you 15 per cent credit for the first $200, according to the CRA. For donations above $200 you get a 29 per cent tax credit. The super credit effectively adds 25 per cent to these rates, up to $1,000.
Parenting is the most important job in the world
Parenting is important, and it’s also very pricey. While child care might still cost parents an arm and a leg they are eligible for tax credits. Parents can generally claim a non-refundable tax credit for child-care costs for any children under 16, such as daycare, caregivers and day camps, according to the CRA. If programs don’t fall under general child care you might be able to claim expenses under the children’s fitness credit or the children’s arts amount. The fitness credit is set to be eliminated for 2017 and beyond, but you can still claim the credit on your 2016 return.