Easy ways to save money on your taxes

There are many easy ways to save money on your yearly tax bill and even get a refund from Canada Revenue Agency.  Tax credits are used to reduce your income and therefore the amount of tax you have to pay to Canada Revenue Agency every year.  If you utilize enough of these credits, you will receive a refund.  Easy as that!

1. A way you may not even notice is by increasing the amount of tax that is taken directly from your pay cheque by your employer.  Even an extra $20 a month can result in a refund to you at the end of the year.

2. RRSP contributions – again, every little bit helps.  At the end of the year you will receive a receipt to submit with your taxes which will directly reduce your income, along with the obvious benefit of saving for your retirement.

3. Prescription and medical receipts – any total over 3% of your income is a benefit to you and will be used to reduce your income.

4. Bus passes – 15% of the cost of each monthly pass for you and your dependents is a tax benefit to you the tax payer.

5. Child fitness receipts – you can submit up to $500 per year per child in receipts for activities they have participated in during the year at recreation centres etc.

6. Private pensions (ie . not CPP or OAS) are eligible for up to $3000 in non-refundable tax credits per year, so make sure you claim them!

7. Caregiver amount – if you live with an elderly parent or family member, you may be able to claim a $2000 non-refundable tax credit.

8. Student loan interest – the interest you pay on your repayment of your student loans every year is a tax benefit to you.  You will receive a receipt for this every year from the government.

9. The government gives you a tax benefit just for working!  The non-refundable credit for 2012 was $1,065 and is increased every year.  As well, if you earn under $17,000 per year you are eligible for the Working Tax Benefit.

10. Universal Child Care Benefit is a taxable benefit.  Always have the lower income earning parent claim this.  Single parents may have the UCCB put into their child’s name and avoid paying tax on it.

More taxable benefits can be found on Canada Revenue Agency’s website.  Make sure you keep all your pertinent receipts throughout the year and use some of these easy tips to save money on your taxes or even get money back each year to roll into RRSP’s or that vacation budget!

Rachel

 

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