Are you self-employed or running a business? The phrase “Canadian tax incentive” will eventually cross your mind, especially when the season to file Canadian tax income approaches. According to the Canada Revenue Agency (CRA), Canadians must file their yearly income taxes before April 30th of the previous calendar year.
Whether you are new in Canada or not, don’t hesitate to take advantage of the tax incentives – they are worth it if you are looking for ways to save money through the government. Unfortunately, many are yet to claim them because they have no idea of what to focus on and the credits and benefits that come forth.
This article highlights five ways government incentives can help you save money on your taxes. We’ll also reveal the bad credit loans from BHM Financial Group to allow you access to more cash at friendly terms. But first:
The Basics of Tax Filing in Canada
Like any government, Canada depends on taxes from qualifying citizens to sustain the economy in areas like roads, health care, and education. Employees usually have their taxes deducted directly from their paychecks, while self-employed people must file independently. Taxes are both federal and provincial.
The Canadian tax amount depends on a specific tax percentage the CRA sets. They calculate the Canadian tax percentage based on income, location, and other aspects like deductions, credits, and benefits.
Are you filing Canadian tax income for the first time? It’s easy to get confused because of the terms you’re probably not used to. In a nutshell, here are some critical terms in the context of this article:
- Tax deduction – it’s the amount subtracted from your income before taxation.
- Tax credit – it’s a direct and specific deduction from the taxes you owe the government. Tax credits are either refundable or non-refundable.
- Tax benefit – involves all the incentives a business or person gets, including the tax credits.
7 Ways to Save Money Embracing Canadian Government Credits and Benefits
Now that you know the basics, keenly navigate through the article to get the financial relief you’ve always wanted. We are here to help you put more money in your pockets. Let’s get into the details!
Consider the Climate Action Incentive Payment (CAIP)
Qualifying Canadians living in Labrador, Nova Scotia, New Brunswick, Ontario, Manitoba, Saskatchewan, and Alberta can now claim this incentive. The CAIP comes quarterly to help offset costs on the federal carbon tax. Since climate change has had a massive impact, the government has raised the prices of carbon-emitting products. Luckily, the charged carbon tax is usually given back. Make sure you seek compensation and save that money.
Know About the Goods and Services Tax/Harmonized Sales Tax Credit (GST/HST)
Your family will only enjoy the GST/HST credit if you file your taxes before the Canadian tax deadline elapses – even when you don’t have an income. This refundable credit helps cover the costs of consumer goods and services, allowing you to have money back in your savings. New residents must apply for this credit to qualify. You can also claim your child’s GST/HST credit if you’ve registered them. For most residents, the GST/HST credit amount received depends on the annual rates, marital status, family income, and children present.
Include Every Qualifying Expense
There are multiple expenses that you can claim back and divert that money to your savings account. You only need to know what applies at a particular point and the process to claim. Here are the five most prevalent expenses that most people go for:
- Self-employment expenses, e.g., bank fees and advertising: All individuals earning an income on the side, wholly or partially, can claim business expenses when working on their Canadian tax return.
- Moving expenses: This applies to those relocating to new homes, operating a business in a new location, or moving to a faraway study institution.
- Work-from-home expenses: Freelancers can now claim a work-from-home tax credit. The amount is a flat rate and may vary from time to time.
- Medical expenses: Expenses from doctor’s fees, dental visits, insurance premiums, and much more, accumulated over time, will earn you a tax credit. Make sure you claim everything on behalf of your family.
Make Use of Canada Child Benefit (CCB)
If you have a child below 18 years, you should consider this benefit if you meet the eligibility criteria. Each family spends considerable money on child care, and the Canadian government relieves the burden with a tax-free monthly incentive. Some of these monthly payments include:
- Child Disability Benefit or Disability Tax Credit – it applies to children with prolonged or severe mental or physical impairment.
- Child care expenses – you can also claim the costs spent on daycare, sporting activities, caregivers (Canada Caregiver Credit), and more. However, there’s a limitation on these claims. Read here for more details.
Go for the Home Accessibility Tax Credit (HATC)
Have you done renovations recently to make your space more accessible and safer, especially for seniors and people with disabilities? That shows you are supporting deserving citizens, and you qualify for HATC. More so, if you have a disability tax certificate and do such renovations, you should claim these expenses.
The Canada Workers Benefit (CWB) Comes in Handy
CWB falls in the category of a refundable Tax Credit. If you are in the workforce with a pretty low income, you may claim these benefits to save the little you get. Those eligible should earn not more than $3000. However, this figure isn’t rigid; it varies based on location, number of dependents, etc. Use the Canadian tax estimator for your area to know the exact figures.
Get to Enjoy the Home Buyers’ Amount (HBA) Credit
Did you purchase a home in Canada during the previous year alone or with your legal spouse? It’s time to claim a tax credit of up to $5000 or more. But not everyone gets this advantage – you or your partner must be a first-time home buyer. This tax credit lowers your federal tax after every home purchase.
Save More Money Today with BHM Financial Group!
Do you feel that the incentives you get aren’t enough and you need more money to boost your savings and do other things without worrying about the Canadian tax deadline? At BHM Financial Group, no matter your credit score, we’ll help you. Over 50,000 Canadians are already enjoying our financial assistance, and you shouldn’t be left out. Apply Now!
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