Tax Tips - Personal Tax Returns: Deductions from Income

Moving expenses are deductible on your tax return subject to certain limitations. You must move 40 kilometres closer to your new work place to earn wages or income through self employment. The expense claim must be incurred in the course of the move and must not be reimbursed by your employer. There is a CRA form number T-M(E) that will provide information on what expenses are deductible.

Union, professional organization dues and professional fees are deductible from your income tax. Make sure you retain your receipts as proof of payment because they are required to be included with your tax return to obtain the deduction.

Interest paid on money borrowed to earn investments is generally tax deductible. The interest can be deductible even if you earn no income from the investment, as long as there is a reasonable expectation of earning income from the investment in the future. Interest on mortgages taken to earn rental income from houses is also deductible from the rental income. There is a limitation in that interest and property taxes are not deductible from rental property income to the extent that they exceed the rental income earned.

University students who move to take summer jobs can, in most circumstances, deduct their travel expenses on their income tax return, but it is a deduction for travel only to the work location. Expenses incurred travelling back to university cannot be deducted from money earned in the summer. The cost of a return trip may only be deducted from income earned at the university if the income consists of scholarships, fellowships, or similar awards obtained in the year or subsequent year.

Child care expenses can be claimed by a single working parent or student, or the parent who has the lower net income in a spousal relationship or common-law relationship. The deduction is the lesser of two thirds of earned income or $7,000 per child under 7 years of age and $10,000 for a child over 6 years of age, but infirm, and $4,000 per other eligible child under 17 years of age or if infirm.  A single parent or the parent with the lower income may claim the amount of the receipted child care expenses to the above maximums.