Reduce your taxes for 2025 with these lesser-known deductions

When it comes to preparing your tax return, many taxpayers only think to deduct the usual items: medical expenses, student loan interest, or RRSP contributions. However, there are many lesser-known tax deductions that can reduce your tax bill for the year 2024. Here are some unexpected tax deductions that could allow you to make substantial savings.

1. Childcare expenses not covered by the State

If you have young children and are paying for childcare, you’re probably already aware of the childcare expense deduction. However, many are unaware that there is also a deduction for expenses not covered by subsidized or state-offered services. For example, if you hire a private nanny or pay for after-school care, these costs can be deducted from your taxes.

It’s important to note that this deduction applies to both licensed and unlicensed daycare services. You can recover part of the costs incurred for the care and maintenance of your children, which represents welcome tax relief for families.

2. Telework expenses

Since the COVID-19 pandemic, many Canadians have adopted teleworking as the norm. In 2024, the government continues to allow remote workers to deduct certain expenses associated with their home office. What is often overlooked is that you can deduct not only a portion of your rent or mortgage but also expenses related to purchasing office equipment, such as computers, printers, or furniture, if these items are used for your home-based work.

To benefit from this deduction, your home must serve as your primary office, or you must work from home more than 50% of the time. Keep in mind that you need to be able to justify these expenses with appropriate receipts and statements.

3. Moving expenses for a new job

If you moved in 2024 to accept a job in another city or province, you may be eligible for a deduction for moving expenses. While this deduction is often associated with professional relocations, it also applies in less obvious situations, such as moving for a remote job or a career change.

Deductible expenses may include the transportation of your belongings, temporary accommodation, and even the sale of your old home, as long as you can prove the move is related to taking up new work. The move must meet several criteria, including being located at least 40 kilometers from your previous home.

4. Donations of securities

Cash donations to charity are well-known for their tax deductibility, but what many don’t realize is that you can also deduct donations of securities, such as stocks, bonds, or exchange-traded funds (ETFs), directly from your tax. Indeed, if you have investments in stocks or other securities and wish to donate to a charity, you can do so without having to sell your securities. Plus, you’ll avoid paying taxes on the capital gains associated with these securities.

This strategy is particularly advantageous if you have securities that have appreciated in value since their purchase. Not only do you get the tax deduction, but you also avoid taxes on capital gains.

5. Medical expenses for extended family members

While many Canadians know they can deduct their own medical expenses, what’s often overlooked is that you can include medical expenses for extended family members, such as grandparents, parents, or adult children living under the same roof. If you’ve incurred medical expenses for these family members, you can include them in your tax return, provided they meet the eligibility criteria set by the government.

Medical expenses can include dental care, prescription medications, chronic illness treatments, and other health-related costs.

6. Pet care expenses due to medical reasons

Pet owners know that veterinary bills can quickly add up. What few people know is that, in some cases, expenses related to pet care can be deducted if the care is necessary due to health reasons.

For example, if a family member needs to go to the hospital and it’s necessary to temporarily entrust the care of a pet to someone or a service, this can be eligible for a deduction. There are also possible deductions for the costs of adopting pets in disability situations.

Conclusion

The tax deductions for the year 2024 are not limited to the usual options. Many opportunities are available to reduce your tax bill, often overlooked due to a lack of knowledge. By exploring these options, you can potentially save more and optimize your tax situation. Before submitting your tax return, it is always wise to consult a tax expert to ensure you maximize your deductions and comply with all applicable rules.