Tax Season Insights: Don’t Miss These 3 Lesser-Known Deductions

As 2024 comes to a close, it’s that time of year again: tax-filing season! For Canadians, spring is synonymous with filing taxes for the previous year. Submitting your return on time is essential—not only to avoid penalties but also to check this task off your to-do list. Plus, taking your time with your filing can help you uncover valuable deductions you might miss if you rush through the process.

While many of you are probably familiar with the major tax breaks—like RRSP contributions and charitable donations—there are some hidden gems you might not know about. Let’s dive into three lesser-known deductions that could save you money!

1. Canada Training Credit

Did you know you can claim the Canada Training Credit for eligible tuition fees beyond just university courses? If you’ve recently completed any certification programs or courses related to your career, be sure to include those expenses on your tax return. This credit can help offset your educational costs, putting more money back in your pocket.

2. First Home Savings Account (FHSA) Deduction

Another fantastic but often overlooked tax break is the First Home Savings Account (FHSA) deduction. This account allows you to save for your first home, with tax-deductible contributions of up to $8,000 each year.

To maximize your savings, consider investing the money. GICs are a solid choice since they keep your principal safe while providing reliable interest. However, you might also want to allocate a small portion to index funds for potential growth. For example, the iShares S&P/TSX 60 Index ETF (TSX) is worth a look. With a 2.9% dividend yield and a low management fee of just 0.16%, it can help enhance your FHSA savings without significant risk.

3. Age Amount

Lastly, let’s talk about the age amount. If you’re 65 or older and earning less than $98,309 a year, you could be eligible for this deduction, which amounts to $8,790 for 2024. The potential savings can reach up to $1,318, making this a worthwhile benefit for retirees looking to stretch their tax savings further.

Don’t let these valuable deductions slip through the cracks! As you prepare for tax season, take the time to explore all the credits available to you. By doing so, you can maximize your refund and ease the financial burden as you enter the new year. Happy filing!

-The Guided Bookkeeping Team