With tax season approaching, it’s crucial to know which deductions and credits you may qualify for in 2024. These can lower your taxable income and, in many cases, increase your refund. Here’s a detailed look at some valuable deductions and credits that could help reduce your tax bill this year.
1. Work-from-Home Deduction
If you’re still working from home, you may qualify for the work-from-home deduction:
Temporary Flat Rate Method: This allows you to claim up to $2 per day, to a maximum of $500, without needing detailed receipts or tracking expenses.
Detailed Method: If you track all eligible expenses (utilities, rent, internet), this method may offer higher deductions for those with substantial home office expenses. Be sure to keep receipts and documentation if you choose this route.
2. Medical Expense Deduction
Medical expenses can add up quickly, and the CRA allows you to deduct certain expenses for yourself, your spouse, and dependents. Eligible expenses now include some mental health services and specialized therapies:
Examples of Eligible Expenses: Prescription medications, dental work, vision care, mobility aids, and therapy sessions.
Document Everything: Keep all medical receipts as proof in case of an audit.
3. Canada Workers Benefit (CWB)
The Canada Workers Benefit (CWB) is a refundable tax credit designed to help low-income individuals and families. If your income falls within a specified range, you may qualify for this benefit, which could provide up to $1,395 for singles and up to $2,403 for families.
4. Moving Expenses Deduction
If you moved to start a new job or post-secondary program and the new location is at least 40 kilometers closer to your workplace or school, you may be eligible to claim moving expenses. Eligible expenses include:
Transportation and Storage: Moving company costs, rental trucks, or storage for your items.
Temporary Accommodations: Hotel costs while moving, and meals up to a certain limit.
5. Child Care Expenses Deduction
Child care costs can be claimed if they were necessary to allow you or your spouse to work, go to school, or conduct research. Eligible expenses include daycare, overnight camps, and after-school programs:
Claim Limits: You can claim up to $8,000 per child under age seven, $5,000 per child age 7 to 16, and $11,000 per dependent with disabilities.
6. Home Accessibility Tax Credit (HATC)
If you made home modifications to support accessibility for a senior or a person with disabilities, you may be eligible for the Home Accessibility Tax Credit. Qualifying expenses include installing ramps, widening doorways, or modifying bathrooms for accessibility. This credit is capped at $10,000.
7. Tuition, Education, and Textbook Amounts
Students enrolled in eligible post-secondary programs can claim tuition fees and may also transfer unused amounts to a spouse, parent, or grandparent. Keep in mind:
T2202 Form: Schools issue the T2202 tax form to claim tuition credits.
Unused Credits: If you don’t need them to offset this year’s taxes, you can carry forward unused tuition credits.
8. Climate Action Incentive (CAI)
Residents of certain provinces qualify for the Climate Action Incentive, a refundable tax credit to offset carbon pricing. Check your eligibility based on your province, as the amounts and criteria may vary.
9. Charitable Donations Credit
If you made donations to registered charities, you can claim them to reduce your taxes. The credit is generally 15% on the first $200 donated, and 29% on amounts above $200. Make sure:
Keep Receipts: Only registered Canadian charities qualify, so ensure you have donation receipts on file.
How to Make the Most of These Deductions and Credits
Claiming these deductions and credits can make a big difference to your final tax bill, so it’s essential to know your eligibility and keep accurate records. Clear Path Consulting and Tax Services (CPCATS) is here to help you identify every possible tax break to maximize your refund.
Need assistance? Reach out to CPCATS for personalized advice to make the most of the 2024 tax season.
Comments