There are several ways to potentially lower your tax bill when you understand all of the deductions, credits, and strategies that are available to you.
✅ Increase Retirement Contributions
• Registered Retirement Savings Plan (RRSP) contributions are tax-deductible, so contribute before March 1, 2021, to write it off your 2020 taxes.
• Maximize tax savings by deferring your RRSP deduction if you anticipate moving up a tax bracket next year.
✅ Deduct Child Care Costs
• For families who paid someone to watch the kids while they worked.
• Deduct up to $8,000 per child under age seven, and $5,000 for kids aged seven to 16.
✅ Credits for Student Loan Interest
• Applies federally and provincially.
• To determine your credit amount, multiply the lowest tax rate by the loan interest amount.
• This interest credit can be applied on any return for the next five years, so claim it when it works best for you.
✅ Claiming Medical Expenses
• Eligible medical expenses include contact lenses, hearing aids, hospital care, travel costs for medical care, and many more.
• If you’re filing with your spouse, it could be better for the partner with the lower net income to claim the expenses.
✅ Home Office Deduction
• Designed for the self-employed, so salaried employees who worked remotely in 2020 should check the Canada Revenue Service’s website for details on what they
may claim.
• Always double-check your claims to make sure everything is accurate and eligible.
Take care,
Mike Wilson
Remax Treeland
604-533-3491
mike@fvlifestyle.com
Want more ways to save come tax time? Call me for a referral to a trusted tax professional!
SOURCE: Canada Revenue Service
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