As Benjamin Franklin once mentioned, “Nothing is certain except for death and taxes”. With this said, we would like to share some great tax deductions that Canadians often miss out on. With the right tax strategy, you are able to utilize tax deductions in order to reduce your income and lower your tax bracket. From student loans to old age, there are deductions available for everyone. Find our list below of 9 credits that you may have overlooked:
If you’re 65 years or older at the end of the 2023 tax year and your net income for the year has been less than $39,826, you are eligible to claim a non-refundable tax credit on your federal taxes. The exact amount that you are able to claim depends on your income. The maximum for the 2023 tax year is $7,898. This is a simple and straightforward deduction that seniors can take advantage of to reduce their tax owing amount. This credit can be transferred to your spouse or common-law partner if you don’t need it.
Spouse or Common-Law Partner
This deduction can be claimed if, at any time of the year, you supported your spouse or common-law partner and his/her net income was less than $14,398. This deduction can only be used for one person for the same year. (Line 303)
Amount for Infirm Dependents Age 18 or Older
As you know, you can claim a deductible for dependents below the age of 18, but you are also eligible for a maximum of $7,525 for each of your or your spouse’s/common-law partner’s dependent children or grandchildren if that person had an impairment in physical or mental functions.
Interest Paid on Student Loans
You may be eligible to claim an amount for the interest paid on your loan in 2022 , or the preceding five years for post-secondary education. This deductible is unique to student loans, and cannot be used for a personal loan, line of credit, or a student loan received from another country. The loan must have been received under the Canada Student loans Act, the Canada Student Financial Assistance Act, or a similar provincial or territorial government law. (Line 31900)
Keep in mind that you can carry the interest forward and apply it on your return for any of the next five years. If you have no tax payable for the current year, it would be smart to not claim it on your current tax return.