6 last minute tax breaks for the end of the year
Even though Canadians won’t suffer the horrors of filing tax returns for another several months, the calendar year is near its end. With just over a month of 2016 left on the books, many of the decisions and actions you take now will impact how well your filing goes this coming tax season.
With that in mind, remember some of the often overlooked areas that boost your refund or mitigate your amount due.
Charitable donations
In case your soul isn’t warmed by giving gifts over the holidays, try giving to those you don’t know, as well as to those you do. Charitable donations do more than make you feel good – they can truly help make a difference to others.
Making a donation to a cause close to your heart will also benefit your tax return. Donations are deductible. Mostly any donation is eligible, but the size of the deduction increases at the $200 threshold. Just remember to get a tax receipt when making your pledge. The CRA website has some more details here.
Childcare expenses
If the/both contributing parent(s) of a child are working full-time or are in school for part of the tax year, then childcare costs can be deducted from your income. Expenses like daycare, boarding school, sports programs and camps all count. The Tax Management Centre notes that $7000 can be deducted for children under seven, while $4000 can be deducted for children seven to 16. Deductions for children with disabilities can reach $10 000.
Unclaimed deductions from the previous year
Some deductibles that you chose not to, or forgot to carry over from the previous year, can contribute to your return for the 2016 season. Tuition credits and charitable contributions are two examples of carry-overs that can get you something back. Tuition credits in particular can be substantial.
Medical expenses
If you encountered a serious medical issue this year, you may have forgotten to tally all the costs for tax purposes. That’s normal. When you or someone you care about is in pain or danger, it is not instinctual to think about possibly saving a few bucks sometime next year.
But once the issue is resolved, it’s time to consider the financial repercussions. File your medical expenses and have some of the costs from 2016 deducted.
Moving expenses
The cost of moving – truck rentals, overnight stays, etc – can earn you a deduction at tax time. Depending on the cost of your move, this payback can net you a solid bit of walking-around money. Try to recall all the expenses you encountered during the move to maximize the benefit.
Self-employment expenses
Self-employment deductions aren’t just for people that work full-time out of a home-office. Even if you are employed full-time with a company, but do a little something on the side, you are eligible for deductions.
It doesn’t matter whether you do some freelance writing or sell your crafts on Etsy. If you do something that contributes to your income, and you spend money to help you perform that role, then you might benefit from some deductions, whether its for materials, office supplies or internet and phone bills.