Many Canadians are missing out on valuable Canada Revenue Agency (CRA) benefits, with a recent study showing that up to 10-12% of eligible individuals aren’t claiming what they’re entitled to. That’s millions of dollars left on the table! Whether it’s the Canada Child Benefit, GST/HST credits, or tax breaks for homebuyers and retirees, there’s a surprising number of people who either aren’t aware of these benefits or don’t know how to access them. So, it might be worth a quick check. You could be one of the many Canadians missing out on some easy money!
Some of the best
Most Canadians can take advantage of a variety of CRA benefits that help ease the financial load throughout the year. One of the more popular ones is the Medical Expense Tax Credit. If you’ve had significant medical expenses in 2024, like prescription meds, dental work, or even certain travel costs related to medical care, you can claim these to reduce your tax bill. It’s particularly helpful because it covers expenses for you, your spouse, or even your kids. Just make sure your expenses exceed 3% of your income, and you could be looking at a nice tax credit!
For those who are looking to level up their skills, there’s the Canada Training Credit (CTC). This nifty credit is designed for Canadians aged 25 to 64, offering up to $250 annually to help cover the costs of eligible training or education programs. You can accumulate up to $5,000 over your lifetime, so whether you’re thinking about picking up a new trade or upgrading your qualifications, the CTC makes it a little easier to invest in yourself. Plus, it’s refundable, meaning you can get money back even if you don’t owe any taxes!
Then there’s the Climate Action Incentive (CAI), which is pretty much free cash if you live in one of the provinces that have a federal carbon pricing system. If you’re in places like Ontario, Manitoba, Saskatchewan, or Alberta, you could receive hundreds of dollars back just for doing your part for the environment. In Ontario, for instance, a family of four could pocket around $976 annually! The best part? This credit is paid out quarterly, so you’ll see that climate-friendly boost regularly throughout the year.
Winning combo
If you play your cards right, combining the Medical Expense Tax Credit (METC), Canada Training Credit (CTC), and Climate Action Incentive (CAI) could give you a nice little cash boost. For the METC, there’s no hard limit, but if you’ve racked up over 3% of your income in medical bills, you could save hundreds, depending on the exact amount of your expenses. With the CTC, you can claim up to $250 per year to offset the cost of training programs, and with the CAI, if you live in a province like Ontario, you could earn around $976 if you have a family of four. So, when you add it all up, you could easily pocket over $1,000-$2,000 in credits and refunds!
Now, instead of just spending that windfall, imagine you invest it in a Tax-Free Savings Account (TFSA). Using a safe, diversified exchange-traded fund (ETF). A good option might be something like Vanguard’s FTSE Canada All Cap Index ETF (TSX:VCN). This spreads your investment across a variety of Canadian companies, thus giving you exposure to the whole market. By investing in a diversified ETF, you reduce risk while still giving yourself the chance to grow that initial lump sum. Over time, with the power of compounding, that +$1,500 could turn into something much more substantial — without you needing to pay tax on any of the gains, thanks to the Tax-Free Savings Account (TFSA).
In the long run, this strategy could create a consistent, tax-free income stream. If you keep adding to your investment over time, you could see even more growth. With smart, safe investments, your tax-free money could start working for you, thus helping to cover future expenses or just giving you extra cash to enjoy down the line!
