5 Tax Benefits You Should Take Advantage Of
January 11, 2023 Andrew AdolphAudits
Tax benefits are there to save you money! Which ones do you qualify for? Find out in today’s blog…
The Canada Housing Tax Benefits
For years they have been saying about 30% of a person’s take-home income should pay for housing. The reality is that many people are finding their cost of housing is more like 50% of their take-home pay, leaving less money for food and baby formula.
Luckily, the CRA agrees and is willing to provide you with a little extra help if you qualify. If you’re an individual who makes less than $20,000 a year or has a combined family income of less than $35,000, the CRA will give you a one-time tax-free $500 payment.
Why You Should File A Tax Return First
You’ll have had to have filled out a 2021 tax return in order to qualify. However, just because you filled out your 2021 tax return doesn’t mean the money will automatically be deposited into your account. Contact the CRA about the tax benefit and prove that 30% of your income goes towards rent. I know it sounds tedious, but the CRA puts these rules in place to prevent fraud. If you live in Vancouver or Toronto, you should have no problem achieving the 30% threshold amount.
What You Need to Be Eligible
To be eligible, you’ll need the following information:
- The address of the rental property,
- The amount of rent you paid in 2022,
- Your landlord’s contact information,
- You must give the CRA permission to verify your information,
If everything checks out, you’ll receive your $500 payment by the end of next year.
One thing I like about the Housing Tax Benefit is that it won’t affect your eligibility for other tax benefits like the Canada Workers Benefit, the Canada Child Benefit, the GST/HST Credit, and the Guaranteed Income Supplement benefit.
The Canada Dental Tax Benefits
Are your child’s dental bills draining your bank account? The Canada Dental Benefit might provide you with some relief. If you qualify, you could receive up to $650 per child from the government. The only catch is that your child must be under 12 years old to receive this benefit. The amount of money you will receive depends on your income. Here’s how much you can claim according to how much you make:
- $650 for an income under $70,000,
- $390 for an income between $70,000-$79,999,
- $260 for an income between $80,000-$89,999,
What You Need to Prove to Qualify
Like other similar benefits, you will have to provide proof to the government that you are eligible. Here are some of the requirements:
- Your child must not have access to private dental care coverage,
- You must prove that you will have dental expenses that require the benefit,
- You must provide the government with documentation of these dental expenses.
Luckily, the government has come up with an application form that makes receiving these payments rather simple. As of December 1st, 2022, the CRA will start accepting applications for the Canada Dental Benefit for expenses that have occurred since October 1, 2022. A good thing about tax benefits like these is that they are not taxable.
BC Family Tax Benefits
Formally known as the BC Child Opportunity Benefit, the BC Family Benefit will increase by an additional $58.33 per child for January, February, and March 2023.
In order to get the regular payments of the Climate Action Tax Credit and the BC Family Benefit, taxpayers must have filed a 2021 tax return. The federal government also recently created new and increased benefits, so filing means not only the BC refundable credits but also some increases to federal benefits like GST/HST.
The Bottom Line
Tax benefits are just one way you can save money. More and more of these taxable benefits require a person to file an income tax return, even if they have no income. It is not unusual for a person to go without filing income tax returns for several years only to receive a demand to file. And when they do file, they find out they have money owing to them, and they have sleepless nights worrying about unfiled taxes.
Need help with taxes? Hit the book free consultation box and set up a free consultation appointment to discuss your predicament. You can also check out additional information on my blog or visit the CRA website.
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Andrew Adolph is a CPA and former CRA auditor with 25 Years of experience. He helps businesses to not par any more in sales taxs than the law says they must and acts as an advocate for you if you are being audited, so you can fous on your business.