Families in Canada have several tax deductions available to them that can significantly impact their finances. Understanding eligibility criteria and maximum claim amounts for the 2023 tax year can aid in maximizing returns. Here’s what you need to know:
Canada Child Benefit (CCB) Designed to assist caretakers of children under 18, the CCB can be applied for through various means. Payments are split equally in shared custody situations and depend on annual tax filings.
Child Care Expenses Eligible costs associated with child care services for working parents or those attending school are deductible. This includes up to $8,000 for children under seven and other specified amounts for older children, including those with impairments.
Eligible Dependent Amount For single, separated, or widowed individuals supporting a dependent at home, a tax credit between $2,350 and $7,525 can be claimed. Age and impairments factor into the exact amount.
Canada Caregiver Credit (CCC) This credit supports those caring for family members with infirmities. Depending on the dependents’ income and other claimed credits, you could claim from $2,350 to $7,525.
Medical Expenses Out-of-pocket medical expenses for drugs, dental services, and medical equipment are deductible. The lower-earning spouse is typically advised to claim these to capitalize on the tax benefit.
Canada Dental Benefit This interim tax credit, available until June 2024, aims to assist with dental costs for children under 12 without dental insurance, providing up to $650 per child, depending on family income.
Children’s Fitness Tax Credit Available in select provinces, this credit supports expenses for children’s physical activities, with amounts varying by location.
Home Office Expenses Due to the ongoing work-from-home shift, employees can deduct home office-related expenses, though the method of calculation has shifted from a flat rate to detailed accounting of actual expenses.
GST/HST Tax Credit This quarterly tax-free payment aids families with modest incomes in offsetting GST and HST paid throughout the year, with amounts ranging based on family size and income.
By staying informed and diligently preparing for the tax season, families can effectively navigate through tax deductions to enhance their financial well-being.