Tax season is the perfect opportunity to reclaim hard-earned money, but many Canadians leave valuable tax deductions untouched every year. Knowing what you can deduct and how to maximize these benefits can make a substantial difference in your tax return. Here are seven overlooked tax deductions that could save you thousands of dollars.
1. Childcare Expenses
Raising children is expensive, but the Canadian government offers tax relief through childcare expense deductions. Eligible expenses include daycare fees, nannies, summer camps, and before- or after-school programs. These expenses must be claimed by the lower-income spouse or partner, and the annual maximum deduction depends on the child’s age:
$8,000 for children under 7.
$5,000 for children aged 7 to 16.
$11,000 for children eligible for the Disability Tax Credit.
Keep all receipts and ensure your childcare provider is registered or authorized. For summer camps, ensure the primary purpose is childcare rather than education or sports.
2. Home Office Expenses
Since the rise of remote work, more Canadians qualify for the home office deduction. There are two methods to claim this:
Temporary Flat Rate Method: If you worked from home more than 50% of the time for at least four consecutive weeks, you can claim $2 per day, up to a maximum of $500.
Detailed Method: This allows you to deduct a portion of rent, utilities, internet, and maintenance costs. Employees must have a signed T2200 or T2200S form from their employer.
Pro Tip: Keep detailed records of your expenses and the percentage of your home used exclusively for work purposes.
3. Medical Expenses
Medical costs can add up quickly, but many Canadians fail to claim all eligible expenses. In addition to prescriptions and dental work, you can deduct:
Fertility treatments.
Mobility aids, like wheelchairs and hearing aids.
Travel expenses for medical care more than 40 km from your home.
Gluten-free food products for those with celiac disease (requires a doctor’s note).
Combine medical expenses for all family members and claim them on the tax return of the lower-income spouse for maximum benefit.
4. Charitable Donations
Giving to a registered Canadian charity doesn’t just feel good — it can also reduce your taxes. Donations qualify for a 15% federal tax credit on the first $200 and 29% on amounts over $200. In some provinces, the combined federal and provincial credit can exceed 50% for larger donations.
You can also carry forward unused donations for up to five years, allowing you to stack smaller contributions into a single larger claim. Ensure the organization is a registered charity and keep official receipts.
5. Moving Expenses
If you moved at least 40 km closer to a new job, business location, or post-secondary institution, you may be eligible to deduct moving expenses. This includes:
Professional moving services.
Transportation and storage costs.
Temporary living expenses (up to 15 days).
Real estate commissions and legal fees.
Ensure your income at the new location exceeds your moving expenses; otherwise, you may need to carry forward the deduction to future tax years.
6. Tuition and Education Credits
Students and their parents often overlook valuable tax credits for tuition and education. While the federal education and textbook credits were eliminated in 2017, the tuition tax credit remains available. Students can claim tuition fees paid to qualifying institutions and transfer up to $5,000 of unused credits to a parent, grandparent, or spouse.
Additionally, many provinces still offer education-related credits, so check your provincial rules.
7. Disability Tax Credit (DTC)
The DTC is a non-refundable tax credit for individuals with a prolonged physical or mental impairment. As of 2025, the federal amount is $8,870, with additional credits available for dependents. Eligibility requires certification from a medical practitioner using Form T2201.
Claiming the DTC can also unlock other benefits, including the Registered Disability Savings Plan (RDSP), which provides grants and bonds to eligible individuals.
Bonus Tip: Maximize Your RRSP Contributions
While not technically a deduction, contributing to a Registered Retirement Savings Plan (RRSP) can significantly reduce your taxable income. For 2025, the RRSP contribution limit is the lesser of 18% of your earned income or $31,560. Contributions made during the first 60 days of the year can be applied to your prior year’s tax return.
How to Ensure You Don’t Miss Out
Keep Organized Records: Maintain receipts, invoices, and statements for all potential deductions.
Consult a Professional: Tax rules can be complex, and working with an accountant or tax advisor ensures you maximize your return.
Use Tax Software: Many tax programs flag commonly missed deductions and simplify the filing process.
The Bottom Line
Taxes don’t have to be a burden. By taking advantage of these often-overlooked deductions, you can keep more money in your pocket and reduce the stress of tax season. Take the time to explore your options, and don’t hesitate to seek professional advice for an optimized return.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions.