High tax bills are not something you want to deal with, and there are a lot of common mistakes that people make which can result in thousands of dollars that you can otherwise save. If you want to pay less tax in Canada, there are a few things you can do to reduce your tax liability, and your first step must be to claim your ‘home office expenses.’
Many people were forced to work from home last year as a result of the COVID-19 pandemic, and if you fall into this category, you will be eligible to claim your home office expenses on your taxes. You can either do this through:
- A temporary flat rate method; or
- Through a detailed method
The temporary flat rate method is a simple way to claim your home office expenses, and you will not be required to submit any documentary evidence, although there is a limit in regards to the maximum benefit that you can get without proof. The detailed method would allow you to claim a higher amount of home office expenses, but you will have to maintain documentation to support your claim.
The following tips are additional ways to pay less tax, so make sure you consider the following:
Invest in RRSPs and TFSAs
This is another way to pay less tax because maximizing these contributions will reduce your yearly income, so you will save on your tax bill. Additionally, this kind of contribution will also help you save a ton of money for your retirement, so this is a great option.
Claim Moving Expenses
If you moved at least 40km to be closer to a new job, you will be able to claim your moving expenses, so ask your accountant about this aspect to see how you can deduct these costs.
Claim Medical Expenses
Many Canadians are unaware that it is possible to claim some of your medical expenses to reduce your tax bill. This would depend on the amount you spend every year on healthcare costs, so based on this information, you may be eligible for some tax credits. You will have to prove the amount you are trying to claim, so make sure you keep your receipts.
Hire an Accountant
You can try tackling your taxes on your own, but you may miss out on a few opportunities, and you may even pay more than you have to. To prevent this from happening, it is best to hire a professional accountant because they will ensure you do not miss out on any credits and pay the right tax amount. Taxes can be complicated, and filling out all of the forms can be tricky, so it’s best to rely on an expert.
If you are looking for a tax accountant near me in the Vaughan, Richmond Hill or Markham areas, Oasis LLP can help! We are a full-service accounting firm providing Audit and Accounting, Tax, Business Advisory and Bookkeeping, so contact us today for more information!
