9 tips to help you get a BIGGER tax refund in 2024

With the start of tax season less than two months away, it’s time to gear up for one of the most important financial deadlines of the year – Tax Day.

Whether you’re a seasoned taxpayer or you’re new to Canada’s tax system, understanding the nuances of tax filing is key to maximizing your refund. Below, I’ll explain the difference between refundable and non-refundable credits and offer some practical tips to help you optimize your return.

Tips for tax season

Although paying taxes is an important part of your civic duty, the government also provides a number of credits and deductions to help relieve undue financial burden from its taxpayers.

By keeping track of childcare expenses, retirement contributions, investment losses, and other costs/expenses, you’ll be able to reduce the amount of taxes you owe. In some cases, you may even stand to get a tax refund – where the CRA pays you!

In general, there are two key types of tax credits:

• Refundable tax credits (these can be contributed to a refund)
• Non-refundable tax credits (these can only be used to reduce taxes owed and won’t go towards a refund)

It’s important to remember this, as I’ll mention these two terms throughout the rest of the post.

With that out of the way, here are some of the most practical tips that you can use to maximize your tax refund!

1. Be proactive (start soon)

One of the best things you can do to save on taxes and make them less of a headache is to get a head start on your taxes. Trust me, you don’t want to wait until the deadline to submit your taxes.

If you try to rush filing your taxes at the last minute, you’re liable to look over credits and deductions that could have been used to save you money or help you get a larger refund. Rushing your taxes is one of the easiest ways to lose money.

I recommend getting a head start on your taxes in December and filing them as early as possible in January. Use December to gather up all of your documents and start going through all of your year’s expenses and receipts. In the first week of January, just fill in the missing information from the last few weeks of the year and you’ll be good to go!

2. Maximize your RRSP contributions

Contributions to your Registered Retirement Savings Plan (RRSP) are tax-deductible as long as you’re within your contribution limits. For 2023, Canadians are allowed to contribute up to $30,780 towards their RRSPs.

The good news is that every dollar of this counts toward a non-refundable tax deduction. If you still have unused contribution room toward the end of December and need to lower your tax liability, this can be a great way to do so.

3. Deduct childcare expenses

No matter how much we love them, caring for our children and dependants can be expensive. Although many lower-income families are eligible to receive the Canada Child Benefit payment to help alleviate childcare costs, many other expenses come out of pocket.

The good news is that all of your childcare and daycare expenses count towards a non-refundable tax deduction.

4. File your return electronically

Unless you have a complicated tax situation, filing electronically can save you a lot of time and money compared to hiring an accountant or professional tax preparer. Many of the CRA-certified tax-filing programs offer helpful tips as you complete your filing and can help you apply for common tax credits and deductions.

5. File capital losses from your investments

Even the most skilled investors lose money from time to time. While investors are required to pay capital gains taxes on their investment earnings, they’re also allowed to write off capital losses on their investments to help balance out their income taxes.

6. Union dues, employment costs, and home-office deduction

Being an employee can be expensive! From union dues to your home-office expenses, these typically come out of your own paycheque. The good news is that they’re all deductible. You can even deduct parking expenses if you have to pay daily parking fees for work! This is why it’s important to save all of your receipts.

7. Deduct non-covered medical expenses

Our universal healthcare system covers most major procedures and routine examinations. However, there are some gaps. For example, if you’re required to pay for certain medications or health supplements out of pocket, you can claim them as a non-refundable tax credit to help reduce your tax burden.

8. Deduct student loan interest payments

Although you don’t get to deduct all of your student loan payments, the CRA does allow you to deduct the interest you’ve paid on your government-funded student loans throughout the year.

9. Keep track of your moving expenses

Did you recently move for your job or school? As long as you moved at least 40 kilometres or more away from your previous home, you can deduct the cost of your moving truck, moving helpers, packaging, and other common moving expenses.

When are taxes due in 2024?

Last year, Canadians filed over 31 million returns with the Canada Revenue Agency (CRA).

Tax Day typically falls on April 30 of each year. The only exception to this rule is when April 30 falls on a Saturday or Sunday, in which case taxes are usually due on the first business day before or after the 30th. In 2024, April 30 falls on a Tuesday, though, which means they’ll be due on the exact date.

As long as you’re filing your taxes electronically, you’ll have up until this date to submit your tax return to the CRA. However, if you’re filing by mail, you’ll need to make sure that your tax returns are mailed out to the CRA at least a week or two before this date to ensure the CRA receives them in time.

If the CRA doesn’t receive your tax return in time, they may impose penalties.

Final tip: Review your tax return with a professional

Although I usually recommend filing your taxes electronically, it can be helpful to have a professional look over your final return before you submit it to the CRA. A quick glance-over could allow a professional tax preparer or accountant to identify a last-minute error or a possible credit that you forgot to file for.

If you’re new to Canada and want to get better acquainted with our tax system, be sure to check out this newcomer’s guide to taxes next!

Written for Daily Hive by Christopher Liew, a CFA charterholder, former financial advisor, and the creator of Wealth Awesome.