14 Ways to Get a Bigger Tax Refund

As our T4s and other tax documents come in, you’re likely wondering how you can get as large of a tax refund as possible. At Gallo LLP, we go over every single document to make sure you have claimed everything you can and receive a bigger tax refund. 

How are personal income tax refunds calculated?

Personal tax refunds are calculated by taking the amount of tax you paid  and subtracting what you should have paid based on your income, charitable donations, investments, and other tax credits such as university tuition or child benefits. If you are an employee, your employer deducts and remits tax to the CRA on your behalf where the taxes paid are an estimate based on the total earnings of the employee. Deductions and tax credits can lower your tax owing below the amount of tax sent in by your employer, which is why you’ll receive a refund of the difference. 

Deductions can be things like RRSP contributions or account management fees paid to brokers for non-registered investments.  Tax credits can range from the personal exemption to the medical expense tax credit, and many more. 

What Can You Do to Receive a Larger Personal Income Tax Refund?

There are many different kinds of deductions or tax credits that taxpayers can use to lower their tax bill and thereby increase any refund they may be entitled to.  

Deductions to Receive a Larger Personal Income Tax Refund

Finding deductions are one way to receive a larger personal tax refund. Deductions work by reducing the taxable income of a taxpayer, and, as such, provide you with a larger tax refund. Examples can include:

  1. Contributions to Registered Retirement Savings Plans (RRSP)
  2. Contributions to a registered pension plan
  3. Union or professional dues paid to earn income
  4. Childcare expenses
  5. Attendant care expenses
  6. Moving expenses
  7. Carrying charges on non-registered investments
  8. Employment expenses
  9. Non-capital losses from previous years
  10. The northern resident’s deduction

RRSP and pension plan contributions are important for your future, but in the present they also help lower your taxable income. Many professions require professional dues (for example, if you’re an engineer in Alberta, your APEGA membership would be a deductible) and union dues, make sure you keep track of these payments for tax season. If you have any dependents, costs associated with your dependents’ care can be used to provide a better tax return, keep all receipts and talk to your accountant about what can and can not be used as a deductible. Keeping your receipts organized is an important part of ensuring you receive a larger tax refund. If you have organized expenses, tax receipts, and investment information, a chartered professional accountant will be able to ensure that you can claim every deduction and receive a bigger tax return. 

Tax Credits to Receive a Larger Personal Tax Refund

Tax credits are another way you can receive a larger tax refund. Tax credits are a tax incentive for certain things you have paid for. Tax credits are used to reduce the amount of personal tax calculated on a taxpayer’s taxable income. Tax credits are a one to one ratio that reduces the amount of income tax you owe, so for example if you own $500 in taxes but have $500 in tax credits, you can use your credits to own zero in taxes. A few examples of items that can give rise to a tax credit include:

  1. The medical expense tax credit.
  2. Charitable donations
  3. Education amounts
  4. Volunteer firefighter or search and rescue amounts

How can a CPA help?

Chartered Professional Accountants are able to look at all your tax information, from income, to investments, to charitable giving, to education fees, and figure out how to get you the largest tax refund. There are far more expenses that can be deducted and tax credits applied to your taxes than what is listed above. If you’re unsure about what you can claim on your taxes to get the largest return possible, contact one of the CPAs at Gallo LLP! Our team is highly qualified to help you get the best return this tax season.  

Jonathan Gallo is the Managing Partner of Gallo LLP Chartered Professional Accountants. He started his accounting career at a large international firm, which provided valuable technical lessons, but his passion is business and winning in business. As an in-depth tax practitioner his recommendations and solutions, are simply, not taxing.