As you near the close of the financial year, you start anticipating taxes. When filing taxes most of us are looking to pay no more than we owe or rather boost our tax refunds. Tax refund is a boon, which helps you secure yours as well as your family’s future by saving more. While you are obliged to pay taxes, there are ways that will help you reduce your tax liability. Here are 6 tips through which you can get more tax refund.
Making charitable contributions to tax-exempt organization allows you to claim a substantial amount of non-refundable tax credit. Such tax-exempt organizations include religious organizations, charitable organizations, community groups, colleges, non-profit hospitals and more. When you make donations to the listed organizations, you are generally able to claim all or part of the amount, up to the limit of 75% of your net income.
If you get a T4 slip and are required to pay out of pocket expenses as a part of your employment, you may be able to claim a deduction. Expenses paid out of your personal finances, which are not reimbursed by your employer are eligible for deductions. Examples include cell phone and laptop used for work. If you have to incur phone expenses related to work, which is not reimbursed you can claim such a deduction. However, make sure you have proper records to prove this.
Certain medical expenses, which are not covered by your health benefit plan, may be eligible for claiming non-refundable tax credit. These include fees paid to medical practitioners, ambulance services, attendant care fees, certain chronic disease treatments, and more. All of these can be claimed while filing tax returns. Hence, make sure you keep a record of receipts and prescriptions for any medical expenses you incur.
Retirement benefit contributions like Registered Retirement Savings Plan (RRSP) may help you boost your tax refunds. As you start investing in RRSP, you will be able to get a tax refund equal to your marginal rate. You can contribute this later to your Tax-free Savings Account (TFSA). Moreover, you can even elect to transfer a percentage of your pension benefit to your spouse to take advantage of income splitting to boost your tax refund.
If you are a small business operating from home, you can avail of several deductions. Most of the expenses you incur to obtain the income are eligible for deductions. This includes internet expenses, stationery, portion of rent, and other maintenance costs you pay for your work space. As per CRA work space in home expenses you can deduct cost of electricity, heating, and more.
You can deduct a number of expenses related to your immediate extended family. Child care and elderly care expenses can be claimed via deductions. If your child goes to a day care or you take care of your child and elderly family member, you can claim a deduction and boost tax refund. Moreover, filing as a family will also help you claim certain non-refundable tax credits.
Implementing these tips before the filing date can help you get more tax refund. While it is not difficult to file your returns, taxation is a complex subject which requires guidance. It is preferable to consult a taxation expert to help you manage income and get more tax refund.