Your path to a better tax season: Understanding taxes and maximizing returns

April 23, 2026

Drew Maginn

The start of any new year brings with it unexpected twists and turns, except when it comes to taxes. While tax planning isn’t always at the top of our to-do list, we can all benefit from tax tips that benefit our bottom line. This includes maximizing tax deductions and credits and planning ahead to save time and avoid headaches in the future.

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Deductions and credits: Tips to increase your tax refund

There are two ways to improve your tax situation: maximizing your tax deductions and maximizing credits. Tax deductions reduce your taxable income, and credits reduce the taxes that you owe. Review the following tax deduction and tax credit opportunities as you prepare your returns.

Tax deductions

Registered Retirement Savings Plan (RRSP) and First Home Savings Account (FHSA): RRSPs and FHSAs are two of the most significant ways to lower your taxable income. For RRSPs, contributions can be made from March to December in the current tax year, as well as during the first 60 days of the following year. RRSP deduction limits are updated annually, and any unused amount can be carried forward to future years. FHSA participation room is also outlined by CRA but transfers from your RRSPs to your FHSAs are not deductible.

Child care expenses: Child care expenses can be deducted if they allow you to earn income or attend school. This includes nannies/babysitters, daycares/preschool, before- and after-school programs and day camps.

Tax tip: If filing with a partner, these expenses are usually claimed by the individual with the lower income.
Moving expenses: Moving expenses can be deducted if you moved to new home to work, to run a business out of a new location or to be a full-time student. However, the new home must be at least 40 kilometres closer to your new work location or school.

Tax tip: Moving expenses don’t only refer to basic costs like hiring movers, reimbursing mileage and setting up storage. It also includes expenses such as temporary living arrangements, costs to cancel a lease, utility set up and disconnection costs and costs to sell and/or buy a home.
Employment expenses: Expenses to earn employment income may be deductible, such as home office expenses, professional dues and supplies required for work. However, the eligibility of these expenses varies depending on the type of employee.

Tax tip: To help you understand what you can deduct, CRA has information for different categories of employment (e.g., salaried employees, commission employees, employed tradespersons).

Self-employed business expenses: For self-employed individuals, a variety of costs can be deducted, including advertising, meals, entertainment, office expenses, professional development, insurance and other professional fees (e.g., legal, accounting).

Tax tip: Software that is used to assist with your business can be deducted as well, including accounting programs, website maintenance and AI tools.

” While managing taxes is typically reserved for the beginning of the year, some advance planning can make things a bit less stressful ”

Tax credits

Basic personal amount: The simplest place to start is your basic personal amount, which allows you to earn a minimum amount of income before having to pay taxes on it. This amount varies on an annual basis.

Tax tip: The basic personal amount varies across provinces, so check the CRA website to confirm what applies to you.
GST/HST credit: The GST/HST credit is paid quarterly to low-income individuals and families to help offset the GST or HST they pay. Eligibility is checked automatically when taxes are filed. However, new Canadian residents must submit forms to CRA, as it will not be automatically calculated in their first year.

Tax tip: Starting in July 2026, the federal government has committed to increasing the GST/HST credit and has rebranded it as the Canada Groceries and Essentials Benefit.
Medical expenses: You can claim eligible medical expenses that were paid in the previous year. Given the number of different medical expenses, CRA provides a detailed listing that outlines eligibility as well as what type of documentation is required (e.g., prescription, forms).

Tax tip: Medical expenses can be eligible for deduction even if they were not paid in Canada.
Canada caregiver credit: This credit is available for individuals who support a spouse, child or dependent with a mental or physical infirmity. The amount you can claim depends on a variety of factors, including your relationship to the dependent, your circumstances, the dependent’s net income and whether other credits have been claimed for the dependent.
Disability tax credit: This tax credit assists individuals with disabilities or their supporting family member. Eligibility depends on whether a medical practitioner certifies that someone has severe/prolonged impairment in one category, has significant limitation in two or more categories or receives therapy to support a vital function. Category examples include walking, mental functions, dressing, feeding and speaking.
Charitable donations: Money or other types of donations made to eligible institutions can be claimed, typically with an accompanying tax receipt.

Tax tip: Depending on what is most advantageous for your tax situation, donations can be carried forward for five years.
First-time home buyers: A one-time credit is available for first time home buyers to help them with some of the costs associated with purchasing a qualifying home. This amount is updated on an annual basis.

Tax tip: If more than one person is eligible when purchasing the same home, the credit can be split as long as it does not exceed the annual limit.

Tuition: Most courses taken at educational institutions are eligible, including those taken by Canadian residents at institutions outside of Canada as long as certain conditions are met.

Tax tip: Tuition is generally not eligible if paid by your employer (or your parent’s employer), a government job training program or a federal program to help athletes.

Thinking ahead: Year-round tax planning strategies

While managing taxes is typically reserved for the beginning of the year, some advance planning can make things a bit less stressful. This can include the below.

Making file management a year-round task instead of frantically pulling information together during tax season. You can benefit from saving documents consistently to avoid a headache for your future self, including separating personal and business expenses.
Using technology to track income, expenses and deductions on an ongoing basis.
Making automated contributions to your RRSP and Tax-Free Savings Accounts to ensure you reach your limit, instead of leaving it to the end of the year when cash flow issues might make it difficult to take full advantage.

Depending on your situation, tax season can be a welcome or stressful time. However, by staying informed about opportunities for making deductions and claiming tax credits, you might find yourself dreading this work a little bit less each year. You may even surprise yourself by turning a balancing owing into an unexpected refund.

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