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Making the Most of Your 2023 Tax Return

It’s that time again – tax season is here! We understand that in tough economic times, dealing with taxes might be the last thing on your mind. If you feel like you’re overpaying or missing out on deductions, we’re here to lend a hand.

Taxes can be tricky, and there’s no one-size-fits-all solution. In fact, the Canadian Revenue Agency (CRA) has outlined over 400 deductions and credits to cater to the various tax scenarios you could have. So, we put together a list of things to consider when filing your 2023 taxes to help you save more and get a better refund. 

1. Home office expenses  

The CRA has clarified the rules for claiming home office expenses in 2023. To qualify, your employer should have asked you to work from home, even if it wasn’t in your contract. You need to have spent more than half of your working time at home for at least four weeks in a row, and you must have a completed Form T2200 from your employer.

If you’ve voluntarily agreed to work from home with your employer, you may still be eligible, but the exact definition of this arrangement isn’t clear.

Part-time workers can also claim expenses if they meet the same conditions, adjusted based on their normal work schedule. You can find out what expenses are eligible on the CRA’s website. While the CRA hasn’t specifically mentioned it in their latest guidance, it’s expected that employers should give you a completed and signed Form T2200 if you meet the criteria for claiming home office expenses.

2. Canada Workers Benefit

The Canada Workers Benefit (CWB) is a tax credit designed for individuals with low incomes who are part of the workforce. Depending on your situation, you might also be eligible for additional payments such as the disability supplement. To qualify, you must earn a minimum of $3,000 annually. However, the maximum income limit varies by province.

The amount you receive through the CWB is determined by two main factors: your place of residence and whether you’re single with no eligible dependents or part of a family.

3. Your Basic Personal Amount (BPA)  

In Canada, your Basic Personal Amount (BPA) is the amount of income that you can earn without having to pay federal income tax on it. The BPA increased to $15,705 in 2024 from $15,000 in 2023, which means you can claim slightly more this year to reduce the federal taxes owed. 

4. TFSA limit increase  

Have a Tax-Free Savings Account (TFSA)? A TFSA is a type of savings account that allows you to earn interest, dividends (the distribution of corporate earnings to eligible shareholders), and capital gains (when you sell an asset for more than what you originally paid for it), tax-free. In 2024, you can contribute $7,000, which is more than the $6,500 you could have last year.  

5. RRSP limit increase

Registered Retirement Savings Plan (RRSP) is a savings plan that allows you to contribute and invest money for your retirement, while reducing your taxable income. 

The amount of money you can contribute in 2024 is increasing to $31,560. You can contribute up to 18% of your earned income from the previous year, but only to the maximum of $31,560 (whichever is less). Also, keep in mind that if you didn’t contribute the maximum amount in previous years, you can add that unused contribution room to your limit this year.

6. The Climate Action Incentive Payment

If you live in Saskatchewan, Manitoba, Ontario, or Alberta, you can snag the Climate Action Incentive Payment (CAIP). It’s a rebate to help soften the blow of those extra gas charges those provinces tack on, whether it’s for heating or filling up at the pump.

Just a heads up, it’s one credit per household, and the amount depends on how many are in home. Meanwhile, in BC, you might be eligible for the BC Climate Action Tax Credit. It’s bundled with your GST/HST Tax Credit and is aimed at assisting folks with lower incomes.

7. Medical expenses

Did you end up with some hefty medical bills in 2023? Whether it was for a dental implant or laser eye surgery, you can actually get some of that money back by claiming medical expenses on your tax return! Just make sure to hang on to all your receipts, prescriptions, and paperwork for up to six years in case the CRA asks for them later on. They might seem like a drag now, but it could save you some hassle down the road! 

8. Charitable Tax Credit 

When you make a donation to a charity, you may be eligible for tax benefits. The Charitable Donation Tax Credit is available to anyone who makes a donation to a qualifying registered charity. 

9. Home Buyers’ Amount

The Home Buyers’ Amount (HBA) is a non-refundable tax credit. If you or your spouse or common-law partner purchased a qualifying home in Canada in 2023, you can claim a tax credit of up to $10,000, which will reduce the amount of federal tax you have to pay.

The catch is that you have to be a first-time home buyer, which the Canada Revenue Agency (CRA) defines as a person who has not lived in another home owned by you or your partner in the year of the acquisition or in any of the four preceding years. 

10. Home Accessibility Tax Credit 

The Home Accessibility Tax Credit (HATC) helps cover costs for making homes safer or more accessible for seniors or people with disabilities. If you’re a senior, have a valid disability tax certificate, or support someone who qualifies, you can claim up to $20,000 in expenses. This could mean a tax credit of up to $3,000 as of 2022.

Similarly, there’s the Multigenerational Home Renovation Tax Credit (MHRTC). It offers a refundable credit to help renovate homes, creating space for a secondary unit where seniors or adults eligible for the disability tax credit can live independently alongside the homeowner.

11. Childcare Expenses

Childcare expenses can be deductible if your child is under 16 years old. These expenses cover a range of services like daycare centers, summer camps, overnight boarding schools, and caregivers such as nannies. Typically, the spouse with the lower income should claim these childcare expenses.

The bottom line

Tax time can feel exhausting, but there are ways to turn it to your advantage. By making the most of deductions and credits, and staying organized with your expenses, you might end up with more money in your pocket when refund time rolls around.

Feeling stressed or overwhelmed about your finances this tax season? Don’t worry! Reach out to us at Farber Debt Solutions today. We’re here to listen and give you the tools to help get you back on track with your money.