Tax Credits you May have Missed

As we approach another tax season, we would like to turn our attention to the many tax credits Canadians can deduct on their personal income tax returns. When we are collaborating with our clients, we come across numerous situations where a client has not claimed a tax credit for which they were eligible. In this month’s blog we wanted to highlight the most overlooked tax credits.

1. Carrying Charges – This is one of the most often overlooked deductions because the name is unclear. Carrying charges is the amount you paid for some of your investment advisor’s fee incurred on non-registered investments or loan interest on money borrowed for non-registered investments earning investment income. These carrying charges will reduce your taxable income

2. Medical Expenses – Often these are not claimed because individuals do not think it is worthwhile. It is not that Canadians are not claiming medical expenses, but there are many missed medical expenses – these are a lot of expenses that qualify including such things as what you pay for gluten free food if it is recommended by a doctor. In addition, what the CRA describes as “Medical expenses for self” includes medical expenses for you, your partner, and your minor children.

3. Disability Tax Credit – This is one of the most valuable tax credits worth about $1,500 for adults and even more for a child. If you do not use the full value of the credit because your income is lower, you can transfer the unused credit to a wide range of people. The main reason this credit is often overlooked is because it covers a broad range of physical and mental impairments, many of which are not associated with a disability like ADHD, autism, and diabetes.

4. Home Buyers Amount - If you purchased a home and you have not lived in a home owned by you or your partner in any of the four-preceding years (or you have you purchased a home and you can claim the disability amount), you might be eligible for a $5,000 tax credit—worth up to $750. If you qualify for this amount, claiming this credit is a simple as ticking a box.

5. Student Loan Interest – Interest paid on a student loan is an often-overlooked credit. This non-refundable credit applies to interest paid on eligible loans. For example, if you opened a student line of credit to fund your studies, that interest is not tax deductible. Student loan interest can be carried forward up to 5 years so if you do not need the deduction this year carry it forward.

As always, we recommend you consult your advisor or a tax planning professional to see which credits you may qualify for.

Be Well Advised.