It’s tax season, and if you’re looking for a way to pay a little less tax, you’re not alone. Canadians pay over $127-billion in income tax every year. Even though our taxes pay for a lot of good things, that’s a lot of money out of every household’s budget. Most people will agree they only want to pay as much tax as is fair – and not a dollar more.
The best and easiest way to reduce the amount of tax you owe is to contribute money to your registered retirement savings plan (RRSP). Every dollar you save in an RRSP is deducted from your income, so if you contribute $1,000 to your RRSP, you’ll save the tax you would have paid to earn that $1,000. (The exact amount of tax you’ll save depends on your tax bracket).
If you’re reading this before March 1st, you still have time to make an RRSP contribution and have it count toward last year’s taxes. Even if you’ve never had an RRSP before, you can open one today and make a deposit before the deadline.
If you’ve missed this year’s RRSP deadline, you might still be able to find things you can claim on your taxes. While other writers will state the obvious (yes, I know I can claim medical expenses, thanks), I’ve scoured the 2018 income tax package to find these things you might be able to claim on your tax return in Canada. And even if they don’t apply to you, you might find them entertaining.
Claim your gluten-free diet
I have lots of friends who are “trying to avoid gluten.” While I personally could eat garlic bread for every meal if it wouldn’t make me fat, I would never take this diet away from people who say it makes them feel better.
You may be surprised to learn that you can claim the cost of gluten-free food on your taxes. But hold on before you get too excited, trend hoppers. There’s a catch. You can only claim the incremental cost of food (i.e. the difference between gluten-free food and a comparable, gluten-filled alternative) and you need to have a letter from your doctor certifying that you have celiac disease and require a gluten-free diet.
To make your calculation just a little more complicated, the CRA says only the portion of the food consumed by the person with celiac disease can be claimed. So if you buy a gluten-free cake for your birthday, you can only claim the slices you eat yourself.
This claim counts as a medical expense, so some rules apply. Most notably, your medical expenses have to equal a significant chunk of your income before you can claim them.
Claim your medical cannabis
While many Canadians can now walk to the corner store to buy their recreational cannabis (and many others can place an online order, pay for shipping and wait patiently by their mailbox), there are over 340,000 registered medical marijuana clients who can claim their cost of medical cannabis on their taxes.
Like other prescription drugs, this falls under medical expenses. You’ll need to keep your purchases above board, and you’ll need to show your receipts.
Claim your first home
Did you buy your first home in 2018? If so, you might have taken advantage of one of the many incentives for first-time homebuyers. These include land transfer tax rebates in some provinces/municipalities, and the home buyers’ plan, which gives you the ability to withdraw money from your RRSP tax-free to buy a home.
If you bought a new home this year, you can also claim the home buyers’ amount on your taxes. This special incentive for first-time homebuyers translates to a nice credit of $750, so you can buy furniture for your house.
Claim your volunteer firefighting service
Thousands of fire departments across Canada are run by volunteers. In fact, only 66 communities are served by fire departments staffed entirely with full-time career firefighters.
If you’re a volunteer in one of the other 3,606 fire departments in Canada, you may be able to claim your service time on your taxes. If you completed at least 200 hours of eligible service, you can make a claim that translates to a nice $450 reduction in your taxes owing.
Claim your classroom supplies
My teachers friends complain at report card time and gloat in the summer, only to complain again when back-to-school time comes around. But one complaint they have that I’m always sympathetic to is that they spend a lot of money on supplies for their classrooms. That’s everything from decorations to arts and craft supplies, books, games, puzzles, and even storage and software.
While it’s not fair that anyone should have to spend their own money to do their job, elementary and secondary school teachers in Canada can at least claim supplies they buy for their classrooms on their taxes, up to $1,000.
Claim things from previous years
Did you miss out on a claim from previous years? Maybe you’re a teacher and you’ve never claimed your supplies. Or maybe you bought your first home a few years back and had no idea about the home buyers’ amount. You may be surprised to learn you can go back and make those claims retroactively.
You can’t claim things from previous years on this year’s taxes, but you can go back and make a change to your previous tax returns. All you have to do is log in to your account on the CRA website, and use the “change my return” page to request a change. You’ll need to provide the supporting documents for the change.