Claim Home Office Expenses and Deduct Employment Expenses from your Employer.  If you are self-employed and/or work from home now you are entitled to deduct a percentage of a range of expenses including: home insurance, mortgage interest on your residence, property taxes, repairs and maintenance and utilities. For example if your office is 3500 square feet and your office is 875 square feet, you will be able to claim 25% of your home-office expenses. If you are employed expenses such a vehicle expenses, home office supplies and etc. can be deducted. 

One is employment expenses are deductible only if you are required to pay for them as a condition of your employment, and you are not reimbursed by your employer. The second is via a T2200 (Declaration of Conditions of Employment from your employer) Use Your RRSP to withdraw for your purchase of a home.  Rules have changed recently such that each spouse can “borrow” up to $25,000 from their RRSP to purchase their first home.  A couple could then access $50K tax-free to use towards a down payment of a first condo or first house.  Mandatory repayment begins in the 2nd year during which you purchase your home or the minimum repayment amount will be $1667 each year for 15 years until the balance of the $25K is fully repaid. 

One of the biggest missing items on your tax return is the medical expense deduction.  Don’t forget that the minimum dollar threshold is calculated as the lower of: $2268 or 3% of your net income.  By combining the medical expenses for you, your spouse, and dependents on one family member’s tax return (the highest earning spouse will maximize the medical expense deduction).  What type of qualifying expenses can you include: certain medical devices, medical premiums paid to an insurance company for medical benefits, payments to a medical practitioner and prescription drugs.  Please keep receipts as a rule of thumb in case of CRA audits. 

Another tax tip would be to borrow to invest.  Interest paid on money borrowed to purchase stocks, bonds or mutual funds is tax deductible.  This will increase your tax savings. The most widely used tax savings tip is investing or maximizing your Registered Retirement Savings Plan (RRSP) contributions yearly.   Not only do you defer any income or capital gains earned inside a RRSP until withdrawal, contributions yearly will reduce the amount of tax owed.  Your annual RRSP contribution limits can be found on your previous year’s CRA NOA (Notice of Assessment).  A one-time over-contribution of $2,000 is allowed into you RRSP.  Be careful not to exceed this amount as you could be subject to a penalty of 1% per month for the months during which the over contribution remains in your RRSP. Before investing in a Non-Registered account it would be prudent to invest in a TFSA (Tax Free Savings Account). 

A TFSA account is a savings account that was first introduced in 2009 which allowed one to save monies within and any income and capital gains accrued in the account would not be subject to yearly taxes.  Furthermore, you are able to withdraw from your TFSA at any time.  In 2021 the annual TFSA Contribution Limit is $6,000.  If you have never invested into a TFSA from 2009, your total available contribution room for a TFSA is $75,500 this year.  Note, although withdrawals are permitted at any time, you must remember, if you make a withdrawal of say $20,000 in 2021 and have made the maximum deposit each year since 2009, you cannot deposit another $20,000 at any point after the withdrawal.  Beginning January 1st of the next year (in this case 2022) you can redeposit the $20K (the amount you withdrew in 2021 to catch up) plus the 2022 annual TFSA contribution limit of $6,000 for a total of $26,000 maximum in 2022 in this case. Should you, your family or your business partners want to discuss additional tax savings strategies feel free to call me at 416 882 - 7462 or email me at devin@dlwealthmanagement.ca.  Thank you.