Adult Financial Literacy Guide | Page 4

Income Tax It is important to file an income tax return each year, so that you receive all of the government benefits you are entitled to. Filing your income tax return can give you access to programs that may put money in your pocket. An income tax return should be filed every year even if you have little or no income. There are some great ways that you can save on your taxes by knowing a few of the deductions and credits that are available. A tax deduction is a cost that reduces your taxable income. For example, if your income is $50,000 and you have a tax deduction for $10,000, then your taxable Income is now $40,000. A tax credit is different in that it is a specific amount of money that is deducted from the amount of tax you owe – not from the amount of income you earn . Some possible tax credits/deductions are:           GST sales tax credit Working Income tax credit (WITB) B.C. Early Childhood tax benefit Low Income Climate Action tax credit Disability tax credit Medical Expense Tax Credit Training Tax Credit Moving Expenses Employment Expenses Care-giver amount Photo via VisualHunt Some Reasons to File Your Income Tax: Here are some examples of benefits you may be eligible for if you file an income tax return:         GST credit payments. Canada Pension Plan Disability Benefits. Disability Benefits (veterans). Employment Insurance Compassionate Care Benefits. Provincial Medical Premium Assistance Program. Subsidized Housing. Bus Pass Program. Travel Assistance Program. 4