Top Tax Deductions Every Canadian Should Know (2025 Edition)

Tax season can be overwhelming—but knowing which deductions you’re entitled to can make a big difference in your refund (or reduce how much you owe). Whether you’re employed, self-employed, or retired, there are valuable tax deductions and credits available to Canadians in 2025.

Here’s your comprehensive guide to the top tax deductions for Canadians this year.

1. Home Office Expenses

If you worked from home in 2024, you’re likely eligible to deduct a portion of your home expenses. You can choose the simplified flat rate method or the detailed method if your expenses are higher. Deductible items include:

• Internet and utilities
• Rent (for renters)
• Office supplies
• Maintenance costs

Tip: Keep a copy of your T2200 or T2200S form if you’re using the detailed method.

2. RRSP Contributions

Registered Retirement Savings Plan (RRSP) contributions are one of the most powerful tax-reduction tools available.

Bonus: RRSPs help reduce taxable income and grow investments tax-free.

3. Childcare Expenses

If you paid for childcare so you could work, attend school, or run a business, those costs may be tax-deductible.

Note: Usually claimed by the lower-income spouse.

4. Vehicle and Travel Expenses (for Self-Employed or Commissioned Employees)

If you use your personal vehicle for work or business (excluding commuting), you can deduct related costs. Some of the eligible expenses include:

• Fuel, maintenance, and insurance
• Lease payments or depreciation
• Parking and licensing fees

Reminder: Keep a mileage log and all receipts to support your claim.

5. Tuition and Education Amounts

If you or your dependents paid tuition to an eligible post-secondary institution, you’re likely entitled to claim a non-refundable tax credit. How to go about it:

• Claim unused tuition amounts from previous years
• Carry forward unused amounts indefinitely

6. Medical Expenses

You may be eligible to claim medical expenses. Examples of claimable expenses include:

• Dental care
• Prescription medications
• Glasses and contact lenses
• Mental health services
• Travel expenses for medical treatment (conditions apply)

7. First-Time Home Buyer’s Tax Credit

If you bought your first home in 2024, you may qualify for non-refundable tax credit, which can reduce your taxes. For this, you must:

• Be a first-time home buyer (or not have owned a home in the past 4 years)
• Intend to live in the home as your principal residence

8. Employment Expenses (T2200 Required)

If your employer requires you to pay out-of-pocket for certain expenses to perform your job (such as tools, supplies, or travel), and they provide you with a T2200 form, you may be eligible to claim them.