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Are You Claiming All the Allowances and Reliefs You’re Due?

Tax allowances and reliefs reduce your tax burden. Unfortunately, a study by United Way Worldwide shows that more than 50 percent of taxpayers are not taking full advantage of these benefits. Tax jargon like tax credit, tax deduction, tax benefits, tax allowances and tax reliefs can be difficult to interpret for most people.

If you want to take full advantage of tax allowances and reliefs, the best advice is to hire an expert who can help you navigate your tax responsibilities. The tax laws can be cumbersome to understand, and so to maximize your tax benefits for the tax season, why not get help from TaxAssist Accountants. Our tax experts are always available for consultation, whether you’re filing as an individual, a self-employed individual or a small business entity.

What Are the Available Tax Allowances and Reliefs?

Tax allowances are monetary considerations that are subtracted from your personal income. Your taxes are then calculated on the remaining personal income, which lessens your tax liability. In 2019, the Canada Revenue Agency (CRA) increased the basic personal amount (BPA) for individuals. This is just one of the many changes that CRA may make on a regular basis that, if you’re not aware of, you may not be able to take advantage of.

Knowing which tax allowances and reliefs apply to your situation requires a careful review, as you may be eligible for several allowances like:

  • Basic personal amount (BPA);
  • Spouse or common-law partner amount;
  • Dependent amount, which includes children, siblings and parents;
  • Canada caregiver amount when you support a spouse, common-law partner or dependent with a physical or mental impairment;
  • Age amount for those who are 65 and older;
  • Disability amount for individuals with vision, speaking, hearing, walking and other such problems;
  • Medical expenses;
  • Pension income;
  • Adoption expenses;
  • Home buyer’s amount;
  • Canada training credit (CTC);
  • GST/HST credit;
  • Tax-free savings account;
  • Canada child benefit (CCB);
  • Child disability benefit (CDB).

Are There Allowances and Reliefs for Small Businesses?

Tax credits for small businesses depend on how the CRA perceives your business entity. Is your business a sole proprietorship, a partnership enterprise or are you a self-employed contractor? Such distinctions are necessary to realize how much tax allowance and relief is possible. Hiring a tax consultant is better than figuring it out on your own, as you can miss out on some allowances.

For small businesses, you may be eligible for:

  • Investment tax credit. You can declare expenses like machinery, equipment and new buildings, but only for areas that are designated for activities like farming, fishing, etc.
  • Apprenticeship Job Creation tax credit. You can get up to $2,000 per year, but only if the apprentice works in a trade that is part of the Red Seal Trades Program.
  • Scientific Research and Experimental Development (SR&ED) tax credit. You can get a minimum of 15 percent back, but only if the research leads to advances in science or technology.
  • Input tax credit. If you already have a GST/HST number, you can submit a claim for expenses like start-up costs, delivery and freight charges, fuel costs, legal and accounting costs, rent, travel and so on.

For the best business and individual tax advice and assistance, contact TaxAssist Accountants.

Date published Feb 13, 2022

This article contains general information only and should not be relied upon for accuracy or completeness. You should seek appropriate tax or accounting advice from a qualified accountant before you take, or refrain from taking, any steps based upon this article. This article should not be construed as tax, accounting or other professional advice and QX Franchise Limited (Master Franchisee for TaxAssist in Canada) disclaims liability for any loss, howsoever caused, arising directly or indirectly from reliance on the information in this article.

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