That dreaded time is quickly approaching, tax season. Does that thought scare you? Have no fear Pam Little CPA is here!. For all your tax needs we’ve got you covered. Now that your stress level has gone down let’s talk personal tax deductions. There are some essential deductions you don’t want to miss out on. The CRA offers a lot of different personal tax deductions. These deductions are subtracted from your gross income to determine your taxable income. The more deductions you have, the less tax you will be required to pay! We’re all happy when we have to pay less. Here are a few examples to get you started:
- Child Care Expenses
You can deduct childcare expenses for amounts you paid to have someone to look after your child while you were working, ran a business, attended school or were a part of government grant-funded research. The amount you can claim depends upon a number of factors including the actual amount of the expense, the age of the child, and the type of childcare provided.
- Support Payments
If you have a court order and/or written agreement to pay spousal support, you can claim those payments as personal deductions. The spouse who receives these payments must declare them as income on their personal tax return. You are also required to file your court order or written agreement through the CRA by filing “Registration of Family Support Payments“ form (T1158).
** Please note that child support payments are not deductible.**
- Retirement Contributions
If you make contributions to your Registered Retirement Savings Plan or Registered Pension Plan you can deduct those contributions from your taxable income. To determine how much you are allowed to deduct, you can refer to your last notice of assessment from the CRA, or use the CRA’s My Account.
- Employment Expenses
Some expenses that you have made for your job are deductible. Although this can be a tricky one. You cannot deduct the costs of traveling to work daily, purchasing clothes, or any day to day costs. But you can deduct accounting fees, allowable motor vehicle expenses, parking, supplies, office rent and home office expenses, for occasions when you were required to pay for those items as a condition of your employment.
**Please note that tradespeople can also deduct the cost of eligible tools.**
- Moving Expenses
If you moved for a new job, to be closer to work, or attend school you can deduct moving expenses. To qualify, your new home must be at least 40 kilometres closer to your place of work than your old home. Claimable expenses include transportation, storage, movers, meals and incidentals such as fees for replacing your driver’s license.
In most cases remember to keep your receipts in case of a CRA review or audit. Proof is in the pudding! Or tax refund in this case.
Navigating the different deductions can be overwhelming. Let a professional CPA guide your way. For more information on what deductions are available to you please contact Pam Little, CPA at pam@pamlittlecpa.com or call 416-268-1605.