We have barely gone through the fourth month of the year and Canadians are already having a rough 2020. Between the one-two punch from the oil price crisis and the global health crisis caused by the COVID-19 pandemic, the economy has taken a massive hit.
Against this backdrop, it was apparent that taxes would be one of the last things you would worry yourself over. It came as a massive relief to many that the Canada Revenue Agency (CRA) decided to push back the dates for the April tax filing deadline to June 1, 2020, this year.
The delayed tax filing deadline opens up the opportunity for Canadians who previously did not have time to leverage tax deductions to create avenues to save a substantial amount.
Today I’m going to discuss two crucial tax deductions you can capitalize on for savings that you can spend on essentials. If you end up with enough savings, you can even invest your savings in a stock like Fortis Inc. (TSX:FTS)(NYSE:FTS).
Lost business investment
Three out of five Canadians are saying that they have experienced significant financial losses from the COVID-19 pandemic. While that’s causing distress for Canadians, it is also allowing them the chance to file for business investment loss.
For instance, you might have incurred a loss when you need to get rid of a share of a small business or a debt owed to you by a small business.
With the ongoing financial crisis, it might be a frequent tax deduction that Canadians will apply for in the current tax season with the CRA.
Childcare expenses
With children at home, parents should try to ensure that they’re claiming all childcare expenses. People often overlook these expenses. The thing is, if you are paying for it, you can claim it in your tax returns this year.
Even when your children are in school, and they partake in after school programs that you pay for out of your pocket, it can go into your CRA tax returns.
You can even claim camps, as they are eligible for these benefits. With plenty of time to sort everything out, you should do your best to include as much as you can for childcare expenses when you are filing your taxes this year.
Using your tax savings
If you manage to have cash left over after taking care of your essential costs from the tax savings, it could be a fantastic idea to allocate the capital to invest in a stable stock.
Investing in a stock like Fortis can help you use the nominal savings to generate more cash through capital gains and dividends. To this end, Fortis seems like an ideal investment you can consider.
Fortis operates across Canada, the United States, and the Caribbean, and nearly all of its services are regulated. The company retains a stellar track record of paying its shareholders their dividends.
It has a 46-year dividend-paying streak — including the 2008 recession. The company aims to increase its dividends each year by 6% in the next four years.
Fortis has provided its investors with substantial returns over the years. An investment of $10,000 in Fortis shares generated a total of $150,000 for shareholders by the end of 2019. In recent years, Fortis has dedicated itself to gain more traction in the renewable energy market.
With a plan to allocate a total of $18.8 billion into developing renewable energy assets in the next five years, Fortis can generate significant cash flow for decades to come.
Foolish takeaway
As you take advantage of your tax savings to cover essential expenses, you may have some cash leftover. It would be a wise decision to invest your tax savings in a stable dividend-paying stock that can generate substantial long-term revenue for you. Fortis could be a stellar asset to consider with your tax savings.
