3 Essential CRA Benefits to Claim on Your 2023 Taxes

Canadian residents should avail of these three CRA benefits and reduce their tax bill in 2024.

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The due date to file your 2023 taxes is April 30, 2024, which is just a few days away. Filing taxes might be overwhelming, but you can use several Canada Revenue Agency (CRA) benefits to offset your tax bill significantly.

Its crucial to add up tax credits and claim all eligible benefits you may be entitled to. While some benefits are calculated automatically by the CRA, others may require you to submit an application manually.

Here are three essential CRA benefits you can claim on your 2023 taxes.

Canada Child Benefit

Individuals with children under 18 are eligible to claim the Canada Child Benefit, or CCB. Eligible Canadian residents may receive up to $619.75 per child each month, which is quite substantial. The CCB benefits make it easier for parents to raise their children by providing financial support each month.

Home office expenses

Taxpayers who work from home can claim a tax credit on their personal income tax returns. This deduction reduces the amount of income tax you pay, decreasing your overall tax liability. The amount you can deduct from your pre-tax income depends on the size of your workspace.

Canada Workers Benefits

Low or modest-income households should apply for the Canada Workers Benefit (CCB), a refundable tax credit. You can claim the CWB while filing your income tax returns. The CWB provides advance payments equal to 50% of the benefit across three payments, helping you with the rising cost of living.

Lower taxes by maximizing your TFSA contributions

While the CRA benefits offer some relief to Canadian households amid rising interest rates and inflation, taxpayers can further lower their tax bill by holding qualified investments in a Tax-Free Savings Account (TFSA).

Any returns generated in the registered account in the form of interest, capital gains, or dividends are exempt from CRA taxes. So, the TFSA is an ideal account to hold a basket of dividend-growth stocks that allow Canadians to generate inflation-beating returns in the upcoming decade.

One quality dividend stock you can consider buying today is Brookfield Asset Management (TSX:BAM). Valued at more than $20 billion by market cap, shares of the alternative asset manager have surged roughly 35% in the last 12 months. The TSX stock pays shareholders an annual dividend of US$1.52 per share, translating to a tasty yield of 3.6%.

With more than US$800 billion in assets under management, BAM raised US$140 billion in capital in 2023. The asset manager aims to generate strong risk-adjusted returns by acquiring assets at reasonable valuations while leveraging operational capabilities to grow cash flows.

Brookfield Asset Management’s distributable earnings for 2023 stood at US$2.2 billion, an increase of 7% year over year, primarily due to higher fee-related earnings. The asset manager ended 2023 with US$916 billion in AUM, an increase of 16% year over year. Its fee-bearing capital stood at US$457 billion, up 9% compared to the year-ago period.

Priced at 27.6 times forward earnings, BAM stock is not too expensive, given that adjusted earnings are forecast to expand by 17.5% annually in the next five years.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

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