1. Claiming Medical Expenses
This year you can claim up to $2,300 in medical expenses when filing your taxes. This is a great way of reducing the total payable amount and can include expenses for yourself and your family. There’s no denying that these bills add to your monthly budget but they might also entitle you to a year-end relief. Be sure to keep track of payments made for braces, prescription glasses and even contact lenses.
2. Interest Payments on Student Loans
Did you know that you can get a tax relief for that interest payment you made on your student loans? Amazing, right. Keep in mind that only the student can claim this payment and that they don’t get a cash refund. This is a non-refundable credit but it helps to lower your total payable.
3. Registered Retirement Savings Plan (RRSP)
Another great way of reducing your income tax is to start investing in a Registered Retirement Savings Plan (RRSP). This reduces your annual income, allows you to hold off on the tax you would have paid this year and lets you mature your investment tax free. Setting up and contributing to an RRSP one of the best dollar to dollar methods for reducing your income tax.
4. Registered Education Savings Plan (RESP)
Do you plan to send your kids to college or university? If you do, then why not set up a Registered Education Savings Plan for them. Like an RRSP, a RESP lets you grow your investment tax free. Setting up a RESP also qualifies you for the Canada Education Savings Grant (CESG). This is a grant which the government gives out to match 20% of the first $2,500 deposited (yearly) in the RESP.
5. Charity Donations
Making donations to charities of your choice lets you support some great causes and might also help you in getting some tax relief. Make sure that the charity is registered with the CRA and you could get a credit of 15% to 50% of your donation.
Get in touch with Syed A. Raza Professional Corp. to get more tips and advice this tax season.