Checklist of Tax Deductible Expenses in Canada

CHECKLIST OF ALL TAX-DEDUCTIBLE EXPENSES IN CANADA

Checklist of Tax Deductible Expenses in Canada

Organizing your tax-deductible expenses might be one of the most challenging and overwhelming aspects of submitting your taxes.

Receipts and invoices are simple for us to lose or throw away during the year, or we may throw them in a shoebox to organize them for tax season. When unsure which of our expenses are tax deductible; this becomes much more challenging.

What are tax deductible expenses?

Any expense that can be utilized to lower your taxable income when you file your taxes is a tax-deductible item.

People can use the CRA's comprehensive list of all tax-deductible costs to lower their taxable income. The amount of tax due after the season is frequently reduced. Alternatively, you could get a bigger tax refund!

The CRA acknowledges a large number of costs that are tax deductible. If you have tax-deductible expenses you want to claim, it's crucial for you to speak with an accountant because this list and its specifics are subject to change.

You must keep track of any receipts and other evidence related to these costs. If you claim tax-deductible expenses without having the tickets to support them, the CRA may review or audit you and impose severe fines and penalties.

Similar to tax deductions, tax credits are refundable or non-refundable benefits you can claim when you file your taxes with the government and are deducted from the taxable income you pay in taxes.

Personal Tax-Deductible Expenses & Tax Credits

On the CRA website, you can find the most recent list of costs that are personally tax deductible.

The checklist you can use for tax-deductible expenses in Canada.

Please be aware that while information is up to date for the tax year 2022, it is not all-inclusive and subject to change. Incentives for climate action and provincial and territorial levies are additional tax-deductible expenses not included here. These are different in each province and territory.

Family, Childcare, & Caregiver Tax Deductible Expenses

These costs involve childcare, family, and caretaker responsibilities. If you have prices that fit into these categories, you may be able to deduct them from your taxes.

Family, Childcare, & Caregiver

·        Child care expenses

·        Child support payments made

·        Eligible medical expenses you can claim on your return

·        Adoption expenses

·        Refundable medical expense supplement

Education Tax Deductible Expenses

Numerous tax credits, both refundable and non-refundable, are also included in the list of school expenses that are tax deductible. Multiple tax credits and deductions are available to you if you or your child is enrolled in post-secondary school.

Education

·        Moving expenses

·        Interest paid on student loans Tuition amount

·        Textbooks amount

·        Tuition amount transferred from a child

·        Other deductions include:

·        Adult essential education tuition assistance

·        Employees of prescribed international organizations

·        Exempt foreign income Vow of perpetual poverty

Tax Deductible Employment Expenses

The CRA has rigorous guidelines for what you can and cannot deduct for employment-related costs. There are tight guidelines governing these charges, and some employees are qualified for more considerable deductible costs than others.

For instance, there are many rules and requirements for home office costs that must be met for someone to be eligible for them.

 Pension & Disability Tax Deductible Expenses

People in Canada who receive pension or disability income are entitled to certain tax deductions and additional tax credits. To ensure you obtain all the tax deductions to which you are entitled when receiving a pension or a disability, it is suggested to speak with an accountant before filing your taxes.

Pension & Disability

·        Disability supports deduction

·        Home accessibility deductions

·        Pension adjustment.

·        Registered pension plan deduction

·        RRSP deduction

·        Deduction for elected split-pension amount

·        Deduction for CPP or QPP enhanced contributions

·        CPP overpayment.

Tax Deductible Employment Expenses

As an employee, you may find it challenging and complicated to deduct expenditures from your pay. If you are self-employed or in a scenario where you need to claim employment expenditures, you should always work with an accountant.

Employment Expenses

·        Annual union, professional, or like dues

·        Other employment expenses include those for: Salaried employees, Commission employees, Transportation, Forestry, Artists, Tradespersons

·        Home office expenses

·        Supplies expenses.

·        Employment insurance overpayment

Business Tax Deductible Expenses

There are several expenses that, under the right conditions, can be considered tax deductible for businesses for the 2021 tax year, according to the CRA.

These include, but are not limited to:

Business Expenses

·        Advertising

·        Allowance on eligible capital property Bad debts

·        Business start-up costs

·        Business tax, fees, licenses, and dues Business-use-of-home expenses Capital cost allowance.

·        Delivery, freight, and express

·        Meals and entertainment (allowable part only) Motor vehicle expenses

·        Office expenses

·        Other business expenses Prepaid expenses Property taxes.

·        Fuel costs (except for motor vehicles) Insurance

·        Interest and bank charges, including specific fees and penalties

·        Legal, accounting, and other professional fees Maintenance and repairs

·        Management and administration fees Rent

·        Salaries, wages, and benefits (including employer's contributions)

·        Supplies

·        Telephone and utilities Travel

Whether these costs are regarded as current-year or capital costs will determine how much your business can deduct from them. Regarding business tax deductions, it can be challenging to identify the difference between them in some cases; therefore, working with an accountant is always recommended.

For tax purposes, it is essential that you maintain your personal and business costs apart. Your ability to correctly claim and deduct company and personal expenses and payments depends on having entirely distinct bookkeeping and record-keeping systems.