Five Must-Know Tax Saving Tips for Canadian Retirees
You’ve put in the long hours, saved your money and now, at long last, it’s time to retire. But even well into retirement, taxes can steadily erode your income if you’re not careful. And that’s where Taxccount Canada comes in. We have been helping retirees from coast to coast reduce taxes through custom, CRA-compliant strategies — from dealing with Canada Pension Plan tax and getting the most from your Tax-Free Savings Account (TFSA) to working with an experienced tax accountant to develop a Smarter Retirement Plan. Here are the five tax-saving tips that every Canadian retiree should have in their arsenal.
Pension Income Splitting How To Keep More As A Couple
If you’re getting eligible pension income (from an RRIF, registered annuities, or superannuation payments, for example), you may be able to share up to 50% of that income with your spouse or common-law partner.
Why it matters:
This maneuver can help to pull income from the higher-earning spouse to the lower-earning one. That could help move you both down to lower tax brackets and reduce your overall tax bill.
Bonus:
It can save you from the Old Age Security (OAS) recovery tax, which is triggered when your income rises above $91,000 (2024 limit).
CPP Sharing Share the Tax Load
IF both you and your spouse have made contributions to the Canada Pension Plan (CPP), you can ask for a sharing of retirement pensions. The CRA applies a formula to how long you lived together while working.
Why it’s useful:
CPP sharing doesn’t change the overall amount you get, but redistributes the income for tax purposes. This serves to lower taxes if one partner is in a higher tax bracket than the other.
Smart tip: It’s an easy way to boost financial wiggle room around the house without affecting total benefits.
File photo/Age Amount Credit: A secret gem for seniors STYLE PHOTO SERVICE/CRAIt’s like finding that lost roll of Lifesavers, a sweet surprise in your income tax return.
If you were 65 or older with a net income of less than $44,325, you may be eligible to claim the full credit for the age amount of $8,790 for 2024.
As you make more than this, the credit phases out and is eliminated after about $98,000.
Share Unused Tax Credits With Your Partner
If you cannot take full advantage of the age amount credit (or other credits like the disability tax credit or pension income credit), don’t despair. You can also transfer the part you did not use to your spouse or common-law partner.
Why this matters:
It lowers your overall household tax liability. And if you have little income, your spouse could make use of your unused credits.
Let us assist you in determining what and how much you can transfer and save.
Don’t Forget About Your TFSA
A lot of retirees underestimate how much they can deduct for medical expenses each year. The CRA allows you to claim amounts that are more than 3% of your net income, or $2,759 (whichever is less).
Qualifying medical expenses include:
- Prescription medications
- Dental and eye care
- Wheelchairs and Accessories
- FDA standard for gluten-free food, used for celiac disease
- Cost of travel to medical appointments
- AC Units for certain chronic diseases
Pro Tip: Save all your receipts, at least for the small things. All these cents can add up to a big deduction when they’re put together.
When Can I Expect My Tax Refund?
Young investors needn’t stop at the Tax-Free Savings Account (TFSA). It’s an indispensable tool for retirees as well. You can make tax-free contributions on your savings, and — what’s better — TFSA withdrawals do not count as income.
That’s because taking money out of your TFSA won’t impact your:
- OAS eligibility
- Supplément de revenu garanti (SRG)
- Provincial benefits
That leads to my typical advice: max out your TFSA every year. Apply it to cover bills or stockpile for medical needs to come — and no tax impact for you!
Why Seniors Use Taxccount Canada
We don’t just do some number crunching — we help you get the most out of your retirement income. We have expert tax accountants that specialize in retirement tax planning, and we help clients all over Canada to ensure every last dollar is accounted for.
✔ Custom, CRA-Compliant Tax Planning
✔ Professional tax accountants you can trust
✔ Clear, friendly service for retirees
Whether you’re asking about your Canada Pension Plan tax, maximizing credit transfers or getting the most out of a TFSA — we’re here for you.
Ready to Save More on Taxes This Year?
Let’s make retirement easier.
Speak to a trusted tax expert today and get the clarity and peace of mind you deserve.
More Money in Your Pocket. Less Stress at Tax Time.
That’s the Taxccount Canada promise.
Frenquently Asked Questions
Can retirees in Canada reduce taxes through pension income splitting?
Yes, you can split up to 50% of eligible pension income with your spouse to reduce your household tax bill and avoid OAS clawbacks.
What is CPP sharing and how does it help retirees?
CPP sharing splits retirement pension income between spouses to lower taxes if one earns more than the other, without reducing total benefits.
How can retirees benefit from unused tax credits?
You can transfer unused credits like the age amount or disability tax credit to your spouse to reduce your total household taxes.
Is the Age Amount Credit available for seniors?
Yes, Canadians aged 65+ with net income under $44,325 (2024) can claim up to $8,790; it phases out above $98,000.
Are TFSA withdrawals taxable for retirees?
Delays can occur due to CRA reviews, incorrect info, or if you owe past taxes or other government balances.
What medical expenses can retirees claim on their tax return?
You can claim dental, vision, prescriptions, assistive devices, medical travel, and more if expenses exceed 3% of your net income or $2,759.
Why should retirees work with Taxccount Canada?
We provide personalized, CRA-compliant retirement tax planning to help maximize your income and reduce stress at tax time — coast to coast.