Money on your mind? Let’s talk about how taxes can contribute to your financial success
CRA SOURCE ARTICLE
November is Financial Literacy Month and this year, the theme is “Money on your mind? Talk about it”. Talking about money is not easy – we get it. However, improving your tax literacy can be directly beneficial to you!
Learning about taxes can improve your personal finances
Tax literacy means knowing how to make informed tax decisions with confidence. We are dedicated to boosting tax knowledge by helping you understand your tax responsibilities as well as the benefit and credit payments available to you.
Don’t miss out on money that you could use right now
When you do your taxes, you could get money back in your pocket with benefit and credit payments! Here are some examples:
If you are the caregiver for children under 18, you could get up to $7,787 (per child under 6) and $6,570 (for ages 6 through 17) with the Canada child benefit. The CCB may include the child disability benefit and any related provincial and territorial programs.
Adults living in most provinces outside of British Columbia and Quebec, are also eligible to receive the quarterly Canada Carbon Rebate. Even if you’re new to Canada, you could apply to receive the rebate within the first few months of your move. The rebate amount varies by province so visit Canada Carbon Rebate to find out what you could get in your province.
For those with a more modest income, you may be eligible to receive the quarterly GST/HST credit of up to $519 for the year. That amount would increase for larger families. It may also include payments from provincial and territorial programs.
Those who are working but currently earning a smaller salary may also qualify to receive the Canada Workers Benefit (CWB) when they file their income tax and benefit return. Families could receive up to $1,308 (i.e., 50% of their CWB) in advance paid in three installments throughout the year under the Advanced Canada workers benefit.
Every dollar counts when saving for a home
Times are tough and despite the government’s efforts to support individuals with housing costs, the cost of living and homeownership continue to rise. Addressing affordability is essential to ensure all Canadians have access to safe and affordable housing options. Maybe one of these could help you!
The First Home Savings Account gives prospective first-time home buyers the ability to save to buy or build their first home on a tax-free basis.
The Home Buyers’ Plan allows first-time home buyers to withdraw up to $60,000 - an increase from the previous $35,000 limit - from their RRSPs to buy or build a qualifying home for themselves or a specified person with a disability, as long as they meet all the conditions at the time of each withdrawal.
The Multigenerational Home Renovation Tax Credit can help reduce renovation costs for constructing a secondary suite to accommodate a senior or an adult who is eligible for the disability tax credit, to live with a qualifying relation. If you are eligible, you can claim renovation expenses, which can result in a refund up to a maximum of $7,500, for each eligible claim.
The government is providing a 100% rebate of the GST, or the federal portion of the HST, on new purpose-built rental housing, and will support the construction of new apartment buildings, student housing, and seniors’ residences designed for long-term residential rental.
For more information, go to Housing - Canada.ca.
There is support for northern residents
If you live in a northern or remote area for six consecutive months or more in the year, you may qualify for the northern residents deductions, which are the residency deduction and the travel deduction. These deductions offer relief to northern residents by recognizing that you often face a higher cost of living, environmental hardships, and limited access to services. To learn more, go to Northern residents - Canada.ca
Greater support for your retirement through the Canada Pension Plan enhancement
Did you know that through the recent Canada Pension Plan (CPP) enhancement, CPP contributions have been increased? More money invested in the CPP means better retirement benefits for working Canadians and their families.
Protect yourself from frauds and scams
A key part of tax literacy is knowing the difference between communications from the Canada Revenue Agency (CRA) and communications from scammers impersonating us. We have some tips that will help you tell them apart. Here’s some things the CRA doesn’t do when contacting taxpayers:
Demand or pressure you for immediate payment by Interac® e-transfer, cryptocurrency (Bitcoin), prepaid credit cards, or gift cards from any type of retailer
Threaten to deport or arrest you, or put you in prison
Use aggressive or threatening language
Set up an in-person meeting in a public location to collect a payment
Charge a fee to speak with a contact centre agent
Ask for personal or financial information in a voicemail or email
If you receive a call saying you owe money to the CRA, you can verify what you owe by checking your balance in CRA’s My Account or by calling the CRA at 1-888-863-8657 and speaking to an agent. You can stay up-to-date on the latest scams affecting Canadians by visiting our Scam Alert webpage.
How your taxes benefit your community
Your taxes pay for all these services that you and your neighbours enjoy including:
education and schools
health care and hospitals
roads and bridges
police, ambulance, and fire services
libraries
parks, playgrounds and wildlife conservation
arenas and swimming pools
garbage and recycling collection
economic development
national defence and public service