3 Common Tax Deductions and Tax Credits You Can Benefit From
Tax deductions are exemptions offered by the government to individuals and businesses, which helps them save money. A tax deduction is subtracted from income, which lowers the taxable income and reduces tax liability.
Similarly, tax credits are a dollar-for-dollar reduction, which also help lower your tax bill. Here are some common tax deductions and tax credits you can benefit from.
Education Deductions and Credits
There are many education-related expenses, including tuition, accommodation, student loans, textbook expenses and moving costs, which you can claim as a tax deduction or a tax credit.
For example, line 21900 can help you claim a deduction for moving expenses that you paid while moving to study in a postsecondary program. Line 25600 is an adult basic education tuition assistance considered as a tax deduction for adult basic education at the primary or secondary level.
You can also claim tax deductions or credits on your tuition and textbook amounts using line 32300. Similarly, line 31900 helps you claim a tax deduction on the interest paid on your student loans for post secondary education.
Employment Expenses and Credits
You can claim some employment tax deductions, including line 21900, which relates to moving expenses you paid while working or running a business from a new location. There are also annual union or professional dues regarding your employment income, which you can deduct using line 21200.
Line 31200 offers employment insurance premiums and is a tax credit that you can claim through your employment income. Line 31217 is insurance premiums on self-employment so that you can access employment insurance special benefits.
If you’ve contributed too much to employment insurance, you can also claim a tax deduction for employment insurance over payment by line 45000. Lastly, if you’re an emergency services volunteer such as a volunteer firefighter or a search and rescue volunteer, you can also claim a tax deduction using line 31220 and line 31240, respectively.
Disability Deductions and Credits
Disability deductions and credits can be claimed for someone who has a physical or mental impairment. You can claim these disability deductions for yourself, your spouse, or your common-law partner as well as eligible dependents.
Line 21500 explains which disability support deductions are eligible and how you can claim them. To claim a disability deduction amount for yourself, you can refer to line 31600. Line 31285 also offers a tax deduction for expenses you spent making your home accessible for a disabled person.
There are many tax deductions and tax credits you might be eligible for. To be fully aware of these tax breaks and to benefit from them, contact Faber LLP. We have over two decades of experience in tax planning and tax advisory in Edmonton, Alberta. Contact us here and benefit from tax reductions, which can save money and reduce your tax liability.