CRA: 5 Tax Write-Offs Most Canadians Miss

Canadians shouldn’t miss important tax-write offs, notwithstanding the more tedious tax preparation in 2021. Boost your non-taxable, too, by holding the NorthWest Healthcare stock in your TFSA.

| More on:

Do Canadians claim available tax credits and deductions every tax season? Tax preparations for this year could be more confusing because of the numerous federal government transfers you must include in your 2020 tax returns. However, taxpayers can derive substantial tax savings if they don’t miss out on five important tax write-offs.

1. Childcare expenses

Claiming childcare expenses for 2020 taxes is straightforward. Don’t forget to claim them if you paid for a daycare center or hired a caregiver to care for your child so you could work or attend school. Another valid reason is that you also need the services to do a project from a grant received.

2. Work-from-home expenses

Did you work from home in 2020 more than 50% of the time due to COVID-19? If yes, claim the work-from-home expenses as a tax deduction. You can go for the simplified flat rate method (maximum deduction of $400) or the detailed method for larger expenses.

3. GST credit

You may qualify to receive the Goods & Services Tax (GST) payments when you file your tax return on or before April 30, 2021. The payments are based on your net income, and the Canada Revenue Agency (CRA) typically pays every quarter. Your first payment should be in July if you filed your tax return on time or by the deadline. The second payment is in October, and then the remaining two would be in January and April of the following year.

4. CWB

Canadians with income of between $13,000 and $24,000 may be eligible for the Canada Workers Benefit (CWB). This refundable credit also includes a disability supplement if you have an approved Disability Tax Credit Certificate on file with the CRA.

5. RRSP contributions

Registered Retirement Savings Plan (RRSP) users take note. In case you’re unaware, RRSP contributions are excellent tax-saving tools. All contributions to this account are tax deductions. It can reduce your total income, dollar-for-dollar, and bring down your tax payables significantly.

Boost non-taxable income

Canadians can boost their non-taxable income in 2021. If you have a Tax-Free Savings Account (TFSA) and free cash to spare, invest in income-producing assets. A dividend stock like NorthWest Healthcare Properties (TSX:NWH.UN) is a cash cow during the pandemic. Likewise, you’ll have more financial cushion during a long-drawn recession.

The $2.49 billion real estate investment trust (REIT) pays a fantastic 6.18% dividend. Assuming your available TFSA contribution room is $25,000, the tax-free income you can derive is $1,545. Northwest Healthcare is the lone REIT in the cure sector, so the stock’s popularity has risen immensely since the pandemic began.

At only $12.89 per share, would-be investors gain access to a portfolio of high-quality international healthcare real estate infrastructure. NorthWest Healthcare has interests in medical buildings, hospitals, and clinics in Australia, Brazil, Canada, New Zealand, and Europe. About 190 properties produce stable, recurring rental revenues. The partners or lessees are mostly leading healthcare operators.

Get organized

When you receive your tax assessment from the CRA, check which deductions and credits require documentary proof or evidence of expenses. Tax experts advise Canadians to save and keep receipts just in case. It would be best for tax-conscious individuals to hold on to all tax documentation for easy reference later on.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Dividend Stocks

Question marks in a pile
Dividend Stocks

Where Will Brookfield Infrastructure Partners Stock Be in 5 Years?

Brookfield Infrastructure Partners (TSX:BIP.UN) kicked off 2024 with a bang. Where will it be in five years?

Read more »

Dividend Stocks

Golden Years Gain: Your CPP Benefits at Age 70

CPP users delaying pension payments until 70 will receive substantial monthly income streams in the golden years.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Top TSX dividend stocks are on sale.

Read more »

Dividend Stocks

Where Will Canadian Utilities Stock Be in 5 Years?

Canadian Utilities (TSX:CSU) is a classic example of a stock where the dividend is all you get. Can the company…

Read more »

Man holding magnifying glass over a document
Dividend Stocks

2 Stocks I’m Watching for Big Passive Income

Consider Bank of Nova Scotia (TSX:BNS) and another top passive-income play to power your dividend portfolio!

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These top TSX stocks have increased their dividends annually for decades.

Read more »

bulb idea thinking
Dividend Stocks

2 Supercharged Dividend Stocks to Buy if There’s a Stock Market Sell-Off

These two top stocks offer attractive yields, have reliable operations and are dividend aristocrats, making them two of the best…

Read more »

question marks written reminders tickets
Dividend Stocks

Better Buy: Loblaw Companies or Metro Stock?

Loblaw Companies (TSX:L) stock is riding on recent momentum. Meanwhile, Metro (TSX:MRU) is executing for future earnings growth.

Read more »