There are a number of ways to reduce the amount of tax you owe, and keep more money in your pocket at tax time. Below are some of the most popular credits and deductions you may be entitled to that will save you money when you file your Personal Income Tax Return.
- Any income you earn in a registered retirement savings plan (RRSP) is exempt from tax as long as the funds remain in the plan. RRSPs help you save for your retirement and get a break at tax time too.
- As long as you stay within your contribution room limit, you will not pay tax on any income you earn from investments in your tax-free savings account.
- Does someone in your family regularly take the bus, train, subway, or ferry to work? You may be able to get a non-refundable tax credit for the cost of the transit passes by claiming the public transit amount.
- Have you retired and now receive a pension? You can split up to 50% of eligible pension income with your spouse or common-law partner to reduce the overall taxes you pay. See pension income splitting for more information.
- Do you work in the trades? Tradespeople can deduct part of the cost of eligible tools purchased throughout the year.
- Did you buy your first home in 2011? Check out the home buyers’ amount to see if you qualify.
- Are you a single parent receiving the Universal Child Care Benefit (UCCB)? The Government of Canada released new UCCB measures may allow you to designate the UCCB income in your child’s name instead of adding this amount to your income.
- Medical expenses: You may be able to claim a non-refundable tax credit based on the medical expenses paid for any 12-month period ending in 2011.
- Child care expenses: Did your children attend daycare or another program such as a summer day camp in 2011? You may be able to claim the amounts you spent on eligible childcare in 2011.
Source: Canada Revenue Agency