Maximize Your Tax Refund With Deductions and Credits

If you aren’t careful, it’s easy to leave money on the table when filing your taxes. There are many deductions and credits available to taxpayers, so it’s worth reviewing the tax benefits that may apply to you at the federal level and in your province or territory. Paying attention to government announcements and policy changes can also reveal opportunities to reduce your tax bill.

“A lot of times when the government makes announcements, they’re usually retroactive,” said Gerry Vittoratos, national tax specialist at UFile. He recommends that taxpayers scan federal budget headlines and other government communications for changes or incentives that might affect their returns—especially in election years. You don’t need to be a tax expert to benefit; simply being aware of announcements and checking how they apply to your situation can pay off.

For example, the federal government announced a reduction in the tax rate for the lowest bracket from 15% to 14% last May. Because that change was announced mid-year, Canadians were taxed at 14.5% on that portion of taxable income for the transition year, with the full 14% rate scheduled for the following year. For 2025, that translated into a 14.5% rate on taxable income up to $57,375, while earnings above that threshold remain subject to higher brackets.

Keep receipts year-round to avoid missing tax credits

Think of tax season as a year-round process rather than a four-month scramble, Vittoratos advises. You incur many potentially eligible expenses throughout the year, and keeping records as you go makes filing much easier and reduces the chance of missing valuable credits.

Set up a dedicated folder—physical or digital—and add receipts, invoices and supporting documents as you receive them. At tax time, sort and discard anything that isn’t applicable. The most common cause of missed credits is omission: taxpayers qualify for deductions or credits but can’t claim them because they’ve lost or failed to save the proof. Typical examples include medical expenses, dental bills, prescriptions, and charitable donations. Keeping clear, organized records throughout the year means fewer missed opportunities and a smoother filing process.

Consider using simple tools like a dedicated email folder for e-receipts, a cloud storage folder for scanned documents, or an expense-tracking app to capture and categorize eligible expenses as they occur. This habit reduces stress at tax time and ensures you can substantiate claims if needed.

Couples and first-time buyers can use credits and deductions to boost returns

Couples can often reduce their combined tax bill by pooling and allocating expenses strategically. Ryan Lee, certified financial planner and founder of Twain Financial in Vancouver, points out that spouses can designate joint costs—such as medical bills or fertility treatments—to the lower-earning spouse when that maximizes tax savings. Coordinating who claims which expenses can produce a larger combined refund or lower overall tax owed.

Remote workers can also claim certain work-from-home expenses, but these typically require documentation from an employer to confirm eligibility. Make sure to gather any employer-provided forms or letters that verify your remote work arrangement and the nature of claimed expenses.

First-time home buyers should also check for applicable credits. For those who purchased their first home in the prior tax year, the first-time home buyer’s tax credit can provide direct savings—up to the amount allowed under current rules. Make sure to retain closing documents and purchase records to support any claim.

In many situations, carry-forwards and transfers can further enhance tax outcomes. These options let taxpayers use credits or deductions in a year when they are most beneficial, rather than losing their value.

Carry forward credits and RRSP deductions to maximize future tax savings

Some credits and deductions can be banked for future use. Common examples include unused registered retirement savings plan (RRSP) deductions and tuition tax credits. Full-time post-secondary students often accumulate significant tuition credits while earning relatively little income; carrying those credits forward allows them to apply the benefit in later years when they enter a higher tax bracket and can realize greater tax relief.

Vittoratos notes that students don’t always need immediate refunds from tuition credits. By carrying credits forward until they secure higher-paying work, students can apply multiple years’ worth of credits in a single tax year to substantially reduce their tax liability. Alternatively, students may be able to transfer certain credits to family members to help reduce a parent’s or guardian’s tax burden—when permitted by the rules.

There’s also a common misconception that lower-income taxpayers shouldn’t contribute to an RRSP because they won’t receive immediate tax benefit. In fact, you can contribute and reserve (or carry forward) RRSP deduction room to use in a future year when your income is higher and the deduction yields a larger tax saving. If you decide to defer an RRSP deduction or otherwise manage carry-forwards, be sure to notify the Canada Revenue Agency as required and keep careful records of contribution and deduction choices.

Read more about taxes:

• Should you claim capital cost allowance on a rental property?
• Tax season can bring some respite to parents with credits and deductions
• Claiming your spouse and dependants on your tax return
• Income tax brackets in Canada (2026)