Articles

Double Dipping: Spend Your Tax Refund for Future Tax Credits

First Posted: March 26, 2009

1. The Home Renovation Tax Credit: The Government of Canada is offering a significant incentive for home renovation. You can receive up to $1350 back as a non-refundable tax credit for the 2009 tax year when you pay for renovation goods or services for an eligible dwelling. This applies to a lot of home renovation, including but not limited new flooring, re-shingling a roof, painting, new furnaces, water heaters, and much more. We have a great article called Invest In Your Home provided by Bennett Gold LLP, Chartered Accountants that goes into more detail about getting the most out of the HRTC.
   
   
2. Children's Fitness Tax Credit: If you have kids, getting them involved in physical activities is great for health reasons, and it can have tax incentives too. For children under the age of 16, the Government of Canada allows a non-refundable tax credit of up to $500 per year multiplied by the lowest marginal tax rate (per child). This is based on eligible fitness expenses paid by parents to register a child in a prescribed program of physical activity.
   
   
3. Public Transit Tax Credit: Think about taking public transit. It saves money, gas, and helps the environment. On top of that, you could be eligible for a non-refundable tax credit. In addition to monthly passes, the tax credit has been expanded to include shorter duration passes and cost-per-trip electronic payment cards (conditions apply).
   
   
4. Charitable Tax Credits: If can’t decide what to do with your tax refund, you can always put it toward a good cause. Donating to charities can reduce your income tax. If you’re considering this, or you already make charitable donations, you can actually maximize your tax credit amount by not necessarily claiming your credit each year. H&R Block has a good write up on how to maximize your tax credit amount for charitable donations.
   
   
5. First-Time Home Buyers' Tax Credit: Your tax return surely won’t cover the cost of a new home, but if you're a first time home buyer, you are eligible for a non-refundable tax credit of up to $5,000 multiplied by the lowest personal income tax rate (15%). That works out to a $750 credit. This is based on eligible closing costs of a home purchase, such as legal fees, disbursements, and land transfer taxes. This offer has also been extended to homeowners who want to upgrade existing homes for a disabled person currently eligible for disabled tax credits.
   
   
6. Student Tuition: School is good for a lot of things! The full cost of your student tuition paid in the year is claimable. Courses you take at a post-secondary level or courses that develop or improve occupational skills from educational institutions certified by Human Resources and Social Development Canada can qualify. Improve yourself by taking some courses and as a bonus, you can improve your tax situation for next year.
   
   
7. Eco Grants and Rebates: These aren’t tax credits exactly. Actually, these will put money back in your hand directly. The Government of Canada is offering grants and rebates for improving the energy efficiency of your home (up to $5000) or for purchasing fuel-efficient vehicles (up to $2000). If you’re looking for even more, there are quite a few incentives provided at a provincial level as well.