Top 25 Tax Savings Tips For Expats Living In Canada for 2024
Living in Canada as an expat can have great financial benefits, but also some complex tax implications. Follow these 25 tips to make sure you maximize your tax savings while living abroad in Canada.
1. Claim Foreign Tax Credits
If you paid tax on income earned in Canada to your home country, make sure to claim foreign tax credits on your Canada tax return. This will help you avoid double taxation.
2. Contribute to Retirement Accounts
Contributing to an RRSP can be a tax-deductible way for expats in Canada to save for retirement. Check contribution limits.
3. Claim Moving Expenses
Some moving expenses like travel and storage fees can be claimed if you relocated to Canada for work reasons. Save your receipts.
4. Don’t Forget Provincial Taxes
Make sure to account for provincial/territorial taxes too in your tax planning, not just federal Canadian taxes. Rates can vary widely.
5. Consider Tax Treaties
Check if a tax treaty between Canada and your home country offers additional tax breaks on pensions, dividends, etc that you can leverage.
6. File Properly as a Non-Resident
If you will be in Canada less than 183 days, file taxes properly as a non-resident when eligible. There are specific forms required.
7. Provide Your SIN
Get a Canadian SIN and provide it so taxes are withheld properly on things like rental income, investment earnings or employment income.
8. Track Days Inside/Outside Canada
Keep detailed records of any days you travel outside Canada. Your residency status depends on how many days you are inside Canada.
9. Claim Tax Credits
Don’t miss out on tax credits you qualify for like the spousal amount, family tax benefits, GST credit, medical expenses amounts and more.
10. Watch Out for Departure Tax
If you hold certain property when you leave Canada, departure tax will apply. Some exceptions apply to shorten ownership periods.
11. Report Worldwide Income
As a Canadian tax resident, you must report worldwide employment, interest, dividend, rental income on your Canadian return.
12. Claim Stock Option Deductions
Stock options benefits provided through Canadian employment may be eligible for preferential tax deductions.
13. Track Charitable Donations
If you give to registered Canadian charities, keep all receipts. You can claim this to offset some tax.
14. Incorporate Your Business
Consider registering your small business in Canada to take advantage of the significantly lower corporate tax rates.
15. Don’t Forget Sales Tax
Make sure to factor in additional sales taxes in Ontario/Quebec on major purchases like cars. Plan ahead for these added costs.
16. File on Time
Don’t miss Canadian tax deadlines! File on time by April 30 to avoid penalties and interest charges adding up.
17. Reduce Tax Withholdings
Fill out a TD1 form with your employer to reduce tax withholdings once eligible deductions and credits available to non-residents are factored in.
18. Deduct Home Office Space
If you work from home, calculate allowable deductions for using space in your home for business purposes.
19. Check Filing Thresholds
Even with Canadian income below filing thresholds, you may need to file a return regarding departure tax, property ownership or other reasons.
20. Understand Tax Installments
Quarterly tax installments may be required based on prior year tax owed. Calculate correctly to avoid interest costs.
21. Get Expert Help
Canadian tax rules for non-residents can be confusing. Consider using an accountant experienced with expat taxes.
22. Leverage Tax Advantages
Utilize accounts like TFSAs for tax-free savings and growth. Review contribution limits based on residency status.
23. Review Status Annually
Evaluate your residency status each tax year-end to choose the most advantageous filing position before submitting returns.
24. Save Supporting Documents
Retain tax records and supporting materials for 6 years in case CRA later requests them for audit purposes.
 25. Stay Updated on Changes
Tax laws frequently change! Review current guidelines for each tax season to capture new deductions or credits available.
By following these key tips for reducing taxes, expats can maximize their refunds and savings when filing Canadian taxes each year. Consult with a tax consultant expert in Canada to ensure full compliance and optimization of available tax benefits.
