Tax time is coming, and Canadians are likely wondering whether they’re going to be paying up, or getting a payout. While it’s never been easier to file taxes given all the free methods of online filing, it can still be a tricky process. Especially when you want to identify benefits and credits.
On the one hand, these online filing systems certainly do a great job at finding the benefits and credits that likely apply to you. But even so, it never hurts to double check and make sure that you can apply for each and every one of them.
So today, let’s look at three benefits and credits that Canadians might be missing out on, and how you’ll want to use them.
Three benefits to grab hold of
We’re going to look at benefits and credits that could likely apply to many Canadians, though you might have missed out on them in the past. They’re also likely to be missed even by some of these filing systems.
First off we can look to the Home Accessibility Tax Credit (HATC). This credit is to help those with disabilities or seniors, but also their supporting individuals. The HATC will help with the cost of making their homes more accessible and safer. Furthermore, expenses may include even large renovations and alterations to accommodate these individuals. The most that Canadians could receive from this credit is $3,000, which would be 15% on the maximum of $20,000 total qualifying expenses each year.
Similarly, Canadians can also consider the Medical Expenses Tax Credit (METC). This tax credit allows Canadians to claim eligible medical expenses for any 12-month period for the tax year. This includes expenses for themselves but also for dependants, such as children. And don’t write it off! This can offset medical treatments, prescriptions, and other health-related expenses. Even a gluten allergy! For this, Canadians could receive a maximum of $2,759.
Finally, if you’re considering buying a home in this market, consider the First-Time Home Buyers’ Tax Credit (HBTC). This non-refundable tax credit provides first-time homebuyers up to $5,000 in tax relief to offset closing costs. All together, these can add up! So, how should you use them?
Pop it into your RRSP
One thing I’ve been doing since I was 18 is putting any refunds from the government right back into my Registered Retirement Savings Plan (RRSP). This is an easy way to maximize my contributions as much as possible, and potentially even bring down my net income to a lower tax bracket for the next year!
From there, I make sure to invest in some strong, diversified, long-term investments. Because I have time, I like to choose investments that provide dividends, as well as medium to higher risk as I have time before taking them out.
A great option is the iShares S&P/TSX 60 Index ETF (TSX:XIU). This exchange-traded fund (ETF) provides a great long-term option as it follows the TSX 60 Index. These are large-cap Canadian stocks that have well-established dividends and growth behind them. Plus you get monthly dividend income you can go ahead and reinvest! All together, I’ve now lowered my taxes, brought in extra cash, and planned for my future retirement. Without spending a dime of my own money.
