14 Expenses You May be Entitled to Deduct


Thousands of Canadians pay more income tax than they should. Not taking full advantage of tax credits and deductions may make you one of those generous Canadians without even knowing it. Are you aware of all of the deductions that are available to you? Do you file your return on time? Do you pay quarterly tax installments to avoid interest charges?  

Here is a look at some of the commonly missed opportunities that could be contributing to your larger than necessary tax bill. 

Expenses You May Be Entitled To Deduct

Employment Expenses

Automotive Expenses

Employees required to use their automobiles for work (other than for travelling from home to and from their workplace) without reimbursement from their employer can deduct the work-related portion of their automotive expenses. 

If you are reimbursed, and the reimbursement amount is not “reasonable,” you can still claim a deduction for the non-reimbursed portion. To claim employment expenses, your employer must provide you with a completed form, T2200 Declaration of Conditions of Employment .

Home Office Deduction

You can claim home office expenses for your workspace and office supplies. Your employer will need to provide you with a completed T2200 form, and you must ensure you maintain records of receipts and expenses for any eligible home office expenses incurred. 

Home office expenses may include utilities, home internet access fees, maintenance, and rent. Commission employees may also be able to claim home insurance, property taxes, lease of a cell phone, computer, and other items reasonably related to earning commission income as eligible home office expenses. You should keep records in case you are eligible to claim these expenses.

Carrying Charges and Deductible Interest 
Borrowed funds must generally be used to earn income (e.g. investing) for the related interest to be deductible. Maintaining proper documentation of loans and interest payments will help support claims for interest deductions. Deductible carrying charges may include investment counsel, bank, or similar fees.
Childcare Expenses
Subject to certain limitations, childcare expenses may be deducted from income by the lower-income- spouse. These expenses include daycare, babysitting, boarding school, and day camps. Note that you must provide the Social Insurance Number of any individual you paid for childcare and supporting documentation is frequently requested by the CRA.
Moving Expenses

If you moved during the year to be at least 40 kilometres closer to a new job, to run a business, or to attend a post-secondary educational institute full-time then you may be able to deduct certain moving expenses. The amount you can deduct is limited to the amount you earn at the new location in the year. Unused deductions can be carried forward and deducted against the related income in a subsequent year.

Some examples of allowable moving expenses are:

  • Accommodation, meals, and temporary living expenses near your new or old residence
  • Cost of changing your address on legal documents
  • Cost of replacing your driver’s license
  • Cost of cancelling the lease for your old residence or expenses for selling your old residence, such as real estate commissions and advertising
  • Cost to maintain your old residence when vacant (maximum of $5,000)
  • Certain expenses related to purchasing your new residence 
  • Transportation and storage for household effects
  • Travelling from your old residence to your new residence
  • Utility hook-ups, disconnections, and other related costs

Proper documentation of your expenses, including receipts, is critical as the CRA generally requests support for moving expenses.

Tax Credits You May Be Eligible To Claim

Charitable Donations

Charitable donations made by you or your spouse during the year should normally be added together and claimed on the income tax return of one spouse. A higher credit is available when total donations exceed $200, so combining the donations and claiming them on one return makes more sense. If your total contributions are less than $200, there is no advantage to claiming them on one return. The key to supporting your claim is to keep the official tax receipts. 

If you donate to certain publicly listed securities, your donation credit is based on the fair market value of those securities. Furthermore, you will not pay tax on capital gains on the donated securities.

Donations can be carried forward for up to five years. If you find a donation receipt that was not previously claimed, bring it in to review with your Crowe MacKay tax advisor.

Medical Expenses

You may claim a non-refundable tax credit on medical expenses for yourself, your spouse, and dependent children. While either spouse can make a claim, as with charitable donations, medical expenses should usually be added together and claimed on the income tax return of one spouse (usually the lower-income spouse) to maximize tax savings. You are not restricted to claiming on a calendar year basis, as you can claim medical expenses for any 12-month period that ends in the year. Commonly missed expenses include:

  • dental bills,
  • eyeglasses,
  • private medical insurance (including certain travel medical insurance premiums), and
  • certain travel costs, such as travel to regional or provincial centres for treatment.  

You may also claim certain expenses in respect of an animal specifically trained to perform tasks to assist with post-traumatic stress disorder. 

Medical cannabis can be claimed as a medical expense. However, individuals can only claim purchases from specific registered sellers. Purchases from other retailers may not be eligible.

Attendant Care & Nursing Home Expenses

For persons who qualify for the disability amount, attendant care expenses may be claimed for:

  • Part-time or full-time attendant care in a self-contained domestic establishment (the person's home, for instance)
  • Full-time attendant care in a nursing home
  • Attendant care in retirement homes, homes for seniors, or other institutions

Attendant care expenses can be claimed as medical expenses to a maximum of $10,000 per year if the disability tax credit is claimed. However, there is no maximum amount if the disability tax credit is not claimed. 

When the expenses are for full-time care in a nursing home there is no limit on the total attendant care expense that can be claimed as medical expenses, however, the disability tax credit cannot be claimed. It is recommended you get a detailed fee statement from long term care facilities to ensure appropriate expenses are claimed.

Disability Tax Credit

This credit is available to a person with a severe and prolonged impairment in physical or mental function subject to certain criteria. To qualify, the CRA must approve an application signed by your doctor or nurse practitioner. Areas that may apply include:

  • Vision/Blindness
  • Life-sustaining therapy
  • Impairment to physical functions such as walking, speech, hearing, and feeding
  • Impairment to performing the mental functions necessary for everyday life

Recent changes to eligibility requirements should make the credit more accessible to those with an impairment to perform the mental functions necessary for everyday life. There has also been a reduction in the eligibility requirements for individuals undergoing life-sustaining therapies, reducing the frequency of treatment to two times each week; however, an individual must still receive therapy for a duration averaging not less than 14 hours a week. These recent changes have been enacted with a retroactive date and apply to Disability Tax Credit (DTC) certificates filed on or after January 1, 2021.

The DTC  can be claimed retroactively for up to 10 years. A T1 adjustment can be filed to claim the credit for any tax years that have lapsed since the impairment began, as certified by your doctor.

Once a person with a disability has applied for and is deemed eligible for the disability tax credit, they may also be eligible to participate in a Registered Disability Savings Plan, which is discussed later in this newsletter.

Other credits may be available to those supporting certain family members who are dependent on them due to a physical or mental infirmity:

  • Amount for infirm dependents age 18 or older
  • Attendant care and nursing home expenses
  • Canada Caregiver amount
Teacher & Early Childhood Educator School Supply Tax Credit
The Teacher and Early Childhood Educator School Supply tax credit is a refundable tax credit. Traditionally, this credit allowed an employee who is a teacher or early childhood educator to claim a 25% refundable tax credit on up to $1,000 of purchases of eligible teaching supplies during the year. 
Student Loan Interest
Interest paid on student loans obtained under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or similar provincial or territorial government legislation for post-secondary education can be claimed as a tax credit. If you do not use the credit for the year the interest is paid, the unused amount can be carried forward for up to five years.
Home Buyers' Amount
If you are a first-time home buyer, you may be eligible to claim a 15% non-refundable tax credit on $10,000. You may be considered a first-time home buyer if neither you nor your spouse or common-law partner owned and lived in another home anywhere in Canada in the calendar year of the purchase or any of the four preceding calendar years.
Home Accessibility Tax Credit
The Home Accessibility Tax Credit (HATC) is available for seniors (age 65 and older) and individuals who qualify for the disability tax credit. This credit allows these individuals to claim a 15% non-refundable tax credit on up to $20,000 of expenses incurred to perform a “qualifying renovation” on their home. The renovation must allow the individual to access, be mobile, or function within the house, or reduce the risk of harm to the individual within or gaining access to the home. Such expenses may also be eligible for the medical expense tax credit, providing a double tax benefit from claiming these expenses.
Digital News Subscription Tax Credit
For 2020 to 2024, individuals can claim a 15% non-refundable tax credit on amounts up to $500 spent on a digital news subscription with a qualified Canadian journalism organization. Note that only the cost of a standalone digital subscription will be eligible. If your subscription provides you access to digital and non-digital content, then only one-half of the amount paid will be eligible for the credit.
Canada Training Credit
This refundable tax credit aims to help workers between the ages of 25 and 64 and encourages them to pursue professional development. Individuals can accumulate $250 of credit room per year, up to a lifetime maximum of $5,000. The amount that an individual can claim as a credit in a particular tax year is equal to the lesser of 50% of eligible tuition and fees paid in a year and the accumulated room at the beginning of the year.
Man on Laptop

What to do Next?

Filing on Time

The regular deadline for filing an income tax return for the previous year is April 30. This filing deadline is extended to June 15* if you or your spouse are self-employed. However, income taxes payable are still due on April 30. Similarly, the information return for “Specified Foreign Property” having an aggregate cost over $100,000 CAD at any time during the year (Form T1135) must be filed by the individual’s filing deadline. 

Taxpayers who do not file their income tax returns on time face significant late-filing penalties: 5% of the balance due plus 1% per month to a maximum of 12 months for the first offence, plus applicable interest on the penalty. The penalty can more than double when the taxpayer fails to file on time for a second time in three years and if the Minister has issued a formal demand for filing.

Interest and penalties are not tax deductible and add up quickly at the rates charged by the CRA. Even if you cannot pay the taxes due, ensure that you file on time.*

*The filing deadline is June 17, 2024, for the 2023 taxation year, as June 15 falls on a Saturday.

Penalties for Failing to Report Income

If you have income from several sources, ensure you report all of it. Failing to report income on your return in the current year and in any of the three preceding years could be subject to federal and provincial/territorial penalties based on 10% of the unreported income in addition to paying the understated tax liability on the unreported income. Interest applies on the unpaid amounts. We recommend you ensure you have information on all of your income when having your return prepared.  

Disclosing the Sale of Principal Residence

Many Canadians are aware that they will likely not pay tax on the sale of their home due to the principal residence exemption. However, some are unaware that this does not relieve them of the requirement to disclose the sale to the CRA. If you sold your home during the year, you must file your personal tax return, completing Schedule 3 and Form T2091(IND). Failure to do so will result in penalties. 

Tax Instalments

Failure to pay quarterly income tax instalments when required may result in interest charges. It is possible to make catch-up payments and reduce or offset the interest charges. Contact your Crowe MacKay tax advisor if you are unsure if you are required to make tax instalments.

Importance of Filing

Failing to file your return can put you at a financial disadvantage even if you do not have income to report. Several benefits and social programs are available to individuals based on the income (or lack thereof) reported in their filed tax return. For instance, the Canada Child Benefit is a tax-free monthly payment from the government to assist eligible low-income families with the costs of raising children. To be considered for the benefit, you and your spouse must file your return every year. Guaranteed Income Supplement (GIS), GST/HST credit, and the Canada Workers Benefit are other benefits that are assessed and paid based on personal income tax filings. 

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.

If you are looking for Tax Services, Crowe MacKay provides personalized support. Our tax professionals will help you maximize tax-planning opportunities and ensure the minimum amount required by law is paid.

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