For most Canadians, tax season can feel like a simple process of getting a T4 slip and filing a return. But if you’re only relying on what your employer provides, you could be missing out on valuable tax credits and deductions that can significantly lower your tax bill or increase your refund.
At Nunniyer Business, we believe that everyone deserves to get the most out of their taxes. While we are experts in business tax, we also provide guidance on personal returns to ensure a holistic financial picture. Here are some of the most important tax credits and deductions for Canadian individuals.
What’s the Difference Between a Credit and a Deduction?
Before we dive in, let’s clarify the difference.
Deductions reduce your taxable income. For example, a $1,000 deduction removes $1,000 from the income you are taxed on.
Credits reduce the actual tax you owe. They are calculated at the lowest federal tax rate (currently 14% for 2026). A $1,000 tax credit won’t reduce your taxable income, but it will reduce your tax payable by $140.
Common Tax Deductions
These are expenses that you can deduct to reduce your taxable income.
Registered Retirement Savings Plan (RRSP) Contributions: This is one of the most powerful tax tools for Canadians. Contributions to your RRSP are fully deductible, and the money grows tax-free until you withdraw it in retirement.
Moving Expenses: If you moved at least 40 kilometers closer to a new location for work or school, you can deduct eligible moving expenses like travel costs, storage fees, and the cost of disconnecting and connecting utilities.
Child Care Expenses: If you paid for child care so that you could work, run a business, or go to school, you can claim these expenses. It’s usually the parent with the lower net income who claims them.
Annual Union or Professional Dues: You can deduct any dues you paid to a trade union or a professional organization as a condition of your employment.
Common Tax Credits
These are amounts that reduce the tax you owe.
The Basic Personal Amount (BPA): Everyone is entitled to this non-refundable credit, which ensures that a basic amount of income is tax-free.
Medical Expenses: You can claim a tax credit for medical expenses you paid for yourself, your spouse, or your dependents. This includes a wide range of costs from prescription drugs and dental care to eyeglasses and private health plan premiums. It’s often strategic to have one spouse claim all the family’s medical expenses to maximize the credit.
Student Loan Interest: You can claim a non-refundable tax credit for the interest you paid on your government-issued student loans.
Charitable Donations: Donations to registered charities can be claimed for a tax credit. The credit is higher on donations over $200. You can also carry forward donations for up to five years, which is a great strategy to save a large amount for a future year to maximize your credit.
Navigating your personal tax return can be complex, but by being aware of these deductions and credits, you can ensure you’re not leaving any money on the table. Keeping all your receipts and slips organized is the key to a successful tax season.
If you have questions about your personal tax situation or want to ensure you’re getting all the credits and deductions you’re entitled to, please reach out. The team at Nunniyer Business is here to help you secure your financial well-being.