8 Ways To Optimize Your Tax Return

March 7, 2024 Budgeting Advice

It’s that wonderful time of year again! Tax season is here. The paperwork and documents might feel stressful right now, but why not focus on the exciting result on the other side? Your potential tax return!

There are multiple ways to optimize your tax return to ensure you get as much back as possible. We’ve laid out some little-known deductions and other tips to get you the best return amount. A bigger return means more money to put towards important things – maybe payments on a high-interest credit card or the car loan you’ve been chipping away at. It’s extra money you could use to continue building and improving your credit.

If you feel like you could use a little boost on your 2023 tax return, here are 8 tips and tricks to optimize this year’s filing.

1. FILE (AND PAY) ON TIME

This tip won’t get you a bigger return, but it will help you avoid extra costs. By filing and paying your taxes on time, you’ll avoid paying any late fees.

In Canada, the deadline for most people to file their 2023 tax return is April 30, 2024. If you owe anything, this date is also the deadline to pay. If you aren’t able to pay on time, the penalty is 5% of your balance owing plus another 1% for each additional month you’re late (up to 12 months).

As you can see, it can add up quickly – so, it’s better to file your taxes sooner than later! Filing late may also delay any benefits or credits you’re eligible for. Luckily, you still have some time to take care of your taxes and get them filed on time.

2. CLAIM THE CANADA CHILD BENEFIT

If you have children under the age of 18 and you’re the primary caregiver, you may be eligible for the Canada Child Benefit (CCB). Even if you have no income to report, you can still apply – simply just by filing your tax return!

Qualifying families can receive tax-free monthly payments from the government to help manage some of the costs of raising children. The amount your family receives depends on factors like household income and family size.

For the period of July 2023 to June 2024, the maximum annual benefit per child under age 6 is $7,437 ($619.75 per month) and the maximum annual benefit for children aged 6 to 17 is $6,275 ($522.91 per month). We know the costs of raising a family can feel astronomical some days, so make sure you look into this helpful benefit when filing your 2023 taxes.

3. CLAIM STUDENT DEDUCTIONS

Are you a post-secondary student or a recent graduate? We know that every little bit counts when it comes to saving money! You can claim your tuition and any other education-related costs (such as textbooks) to reduce the amount you owe in taxes.

The federal tuition tax credit is one of the top tax credits for post-secondary students. Even if you aren’t reporting any income this year, you can use this credit to claim the eligible tuition fees (over $100) you paid to take courses at your school.

Your school will provide you with paperwork that has the total eligible tuition fees paid as well as the months you were enrolled in either part-time or full-time courses. You can also claim the interest you paid on your student loans!

4. CLAIM MOVING EXPENSES

Did you move away from home to attend university or transfer to a new job in a different province? Good news! You can claim the expenses associated with the move. This includes transportation and storage costs, travel expenses, temporary living expenses, the cost of getting out of your lease and more.

Just keep in mind that to qualify for this moving deduction, your new residence needs to be at least 40 kilometres away from your new school or office.

5. CLAIM GST/HST CREDIT

All you need to do to claim your GST/HST credit is file your taxes! You are automatically considered for the credit when you file.

If you don’t file, you could be missing out on a non-taxable quarterly payment from the government that is designed to help offset the cost of the goods and services tax and harmonized sales tax you pay throughout the year for households with lower or modest income.

You’re generally eligible if you’re older than 19, have (or had) a spouse or common-law partner, or are (or were) a parent and live (or lived) with your child.

6. UTILIZE YOUR SAVINGS

Any contributions you made to your Registered Retirement Savings Plan (RRSP) in 2023 are eligible for a tax refund. Note: the government’s deadline for RRSP contributions in the 2023 tax year is February 29, 2024.

Contributions you made can be deducted from taxable income, meaning you can end up paying less taxes and saving more money! You may get anywhere from 20 to 50% of your RRSP contributions back – that’s pretty significant!

Also, the amount of money you can squirrel away into your Tax-Free Savings Account (TFSA) increases each year – even if you don’t file your taxes or earn any income. If you’re over the age of 18 and a resident of Canada, you can put a maximum of $7,000 into your TFSA in 2024.

Wealthsimple has an RRSP calculator and TFSA calculator you can play around with.

7. MAXIMIZE CREDITS

Before you finish filing your 2023 taxes, double-check that you’ve maximized your refund as much as possible! Did you look into these other tax credits you might be eligible for?

Canada Employment Amount. This is a credit for work-related expenses such as home computers, uniforms and supplies.
Charitable Donations. Claiming your donations means you can support causes you care about while getting a tax break at the same time.
Digital News Subscription Credit. If you subscribe to a Canadian news source, you may be able to claim it on your taxes.
Manitoba Education Property Tax Credit. This credit is meant to give Manitobans a bit of a break on their taxes by covering school taxes or a portion of their rent.

8. FILE FOR FREE

The actual act of filing your taxes can unfortunately be a pretty expensive part of the tax process. To spare yourself the expense, you can file your taxes online through the government’s NETFILE service or one of a few listed certified software products. This can streamline the process – and you may even get your refund faster!