Tax Refund: How to Get More Money Back This Year

Resourceful taxpayers will try to find out available tax credits and tax refunds to get their money back in this year’s tax season.

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The 2024 tax-filing season kicked off on February 19, and the filing deadline for 2023 tax returns, together with payment of tax payables, is April 30. Individual taxpayers should prepare early and take advantage of the deadline to avoid penalties (5%) and interest charges (10%).

More importantly, taxpayers must know how to get their money back through various tax exemptions, benefits, credits, and refunds.

New BPA

The basic personal amount (BPA) changes yearly, and for the 2023 taxation year, the new BPA has increased by 4.1% to $15,000. All individual taxpayers can claim this non-refundable tax credit to reduce their overall tax liability.

However, the federal government adjusted the federal income tax brackets by 4.7% to account for inflation. The tax due at the lowest income bracket, or income of up to $53,359, is 15%. Income above $235,657 is taxed at 33%, the highest of five income brackets.   

Canada Child Benefit

The Canada Child Benefit (CCB) offers substantial tax relief. This tax-free monthly payment indirectly covers the cost of raising children. The Canada Revenue Agency (CRA) recalculates the child tax benefit yearly. For the 2023-2024 benefit year, taxpayers or families can receive up to $7,437 per child under six and $6,275 per child aged six through 17.

According to Employment and Social Development Canada, the new child tax benefit represents a 6.3% increase from the previous year and should make a real difference.

The claimant must be a Canadian citizen or permanent resident caring for or raising at least one child under 18. You can check with the CRA for other eligibility requirements or concerns.

Tax deduction

Did you contribute to your Registered Retirement Savings Plan (RRSP) on or before February 29, 2024? If you did, the contribution is tax-exempt, and the CRA will deduct the taxes you paid from your tax bill. However, if you missed the deadline, remember you have 60 days from year-end to make RRSP contributions.

For 2024, the RRSP contribution limit is 18% of earned income reflected in the 2023 tax return or up to $31,560. Assuming you made RRSP contributions but didn’t reach the maximum, the unused contribution carries over to the following year.

Offset tax payables

The Tax-Free Savings Account (TFSA) annual contribution limit increased to $7,000 2024. Unused contribution rooms also roll over each year. Since all earnings, dividends, and gains inside a TFSA are tax-free, it offsets tax payables or serves as instant tax refund.

National Bank of Canada (TSX:NA) is an eligible and ideal holding in the tax-advantaged account. The $38.23 billion bank pays a decent 3.8% dividend. At $112.34, you can buy 62 shares with the $7,000 limit. Your investment will transform into a $66.50 quarterly passive income.

Canada’s sixth-largest bank is a solid investment like its larger peers. Moreover, current investors enjoy an 11.62% year-to-date gain, which is the best performance among the Big Six. In the first quarter of fiscal 2024, net income increased 5% to $922 million despite the 39.5% year-over-year increase in provision for credit losses to $120 million.

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No deadline extension

Some accountants or groups petition for an extension, but the CRA usually denies them. The 2020 COVID year was the only recent exception. Every taxpayer should try to understand the tax measures and where tax refunds are possible and tax relief is applicable.

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.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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