The chart below shows the federal tax rates for 2022 and will help illustrate the point below: Your marginal rate is the rate of tax incurred on each additional dollar of income. We have a progressive tax system in Canada with different tax brackets for different levels of income. The value of a deduction depends on your marginal tax rate. Step 1: Maximize Your Tax DeductionsĪ tax deduction reduces your taxable income.
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This article explains everything you need to know about tax deductions and tax credits in Canada, as well as how to take advantage of the tax benefits in Canada. Unfortunately, many Canadians aren’t aware of all the tax deductions in Canada, what can you claim on your taxes, and which COVID-19 benefits are taxable, leading many Canadians to owe more than they expected at tax time. To get the most out of your tax return, it’s important to understand that there are two main ways to reduce your taxes owing: (1) tax deductions and (2) tax credits. But the big question on everyone’s mind is: how to get more money back on taxes in Canada?
You’re already taking advantage of the best tax shelters if you own your home and contribute to an RRSP, TFSA, and RESP. Most tax planning is fairly straightforward. This early planning was even more important to prep for filing my 2021 income tax return since COVID-19 made extra benefits and deductions available – with potentially big tax implications.
It allows me to figure out where I stand with the “tax man,” while still giving me ample time to make smart tax planning moves to maximize my tax refund (and minimize what I owe the government). For complete and current information on any advertiser product, please visit their Web site.Īlthough April 30 is usually the deadline for filing taxes in Canada, I’m always eager to get my tax return prepared within the first 60 days of the year. Advertisers are not responsible for the contents of this site including any editorials or reviews that may appear on this site.
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