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Latest revision as of 17:25, 10 April 2025

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A tax deduction, or "write off" as it's sometimes called, reduces your taxable income by allowing you to subtract the total amount of an expense from your income, before calculating simply how much tax you've pay. The greater deductions you need to or the higher the deductions, the reduced your taxable income. Also, additional you reduce your taxable income the less exposure you might need to the higher tax rates in improved income brackets. As you read earlier, Canada's tax system is progressive thus the more you earn, the higher the tax rate. Losing taxable income reduces the amount of tax payable.

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