There are two terms that a tax payer in Canada comes across every time, the first one is tax credits and the second one is tax deductions. For a normal person the two terms may mean similar, but there essentially mean different.
Tax deductions work on the overall taxable income and reduce it, whereas tax credits reduces the amount of tax that you have to pay. To enable tax payers to understand these terms clearly these two terms have been put in Federal Credit, Deductions and Province specific credit.
Most of the tax returns in Mississauga that are related to children are available only for those who are less than 18 years of age. For other dependents, the income tax credits have been put under dependent tax credits. These credits should be used in a proper manner so you can get maximum tax returns in Oakville. It is best to contact a tax consultant in order to get the maximum tax returns.
Different Options available in Tax Credits
Tax deductions can be used by any person who is a permanent resident or a citizen of Canada. They can claim for tax returns in Oakville provided they fulfill the eligibility requirement. In case a person does not have enough tax to use these deductions, than they can be carried forward and can be utilized in the coming years.
One of the most common types of deductions available to people who pay tax and are below 71 years of age is RRSP. Depending on the limit that is given on the notice of assessment, a tax payer can use the maximum deduction through RRSP. This deduction can be carried forward and used in later years. Many taxpayers contribute to these tax returns every year and use it when maximum benefit is provided by them.
Annual union, professional or similar taxes are related to the employment of a person. They can be used according to the amount that is given on T4 slip. This deduction is not beneficial to a person who does not have any professional or union income.
Tax Credit for Taking Care of Your Child
In case you have kept a caregiver to look after your child when you are away at work then you are eligible for child care expense deductions. However, there is a restriction on the amount of deduction that can be earned on this clause which is a maximum of two-third of the total income.
This deduction is calculated automatically when a tax payers enters the numbers. 100% tax return in Oakville is not available in this clause. You need get in touch with your tax consultant on how you can categorize each of these deductions.
There are various other tax returns in Mississauga that are available. Your personal circumstances and your overall payable tax determine the amount of tax credit that can be had. A complete detail can be had from a local tax consultant in your area.