03/04/2026
Tax-deductible expenses are costs that can be subtracted from your total income to lower your taxable income, reducing the overall tax you owe. Common deductions include business expenses (rent, equipment), RRSP contributions, medical expenses, childcare, and moving costs. They differ from tax credits, which directly reduce the tax payable.
Some Examples of Tax-Deductible Expenses:
• Business Expenses: Generally, expenses must be incurred to earn income, such as office supplies, business travel, and a portion of home office costs (utilities, mortgage interest/rent).
• Individual Deductions (Canada): Common personal deductions include Registered Retirement Savings Plan (RRSP) contributions, childcare expenses, moving expenses (if you moved for work), and certain employment expenses
• Medical Expenses: Non-refundable tax credits apply to expenses like dental implants, prescription glasses, private health insurance premiums, and travel for medical treatment, prescription drugs.
• Legal Fees: Fees paid to collect or establish a right to salary, wages, or other income may be deductible.
• Repayments: Federal or provincial COVID-19 benefit amounts repaid in 2024 or 2025 can be deducted.
Important Distinctions:
• Deductions vs. Credits: Deductions reduce taxable income, while credits directly reduce the tax you owe.
• Documentation: Always keep receipts for at least 6 years, as the Canada Revenue Agency (CRA) may request them.
For more information: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses.html
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