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How to Save on GST & HST This Season

Understanding the GST/HST Break: Boost Your Savings This Holiday Season

The holiday season is a time for joy, giving, and, let’s face it, shopping. While many Canadians look forward to finding the perfect gifts for loved ones, the season can also be a strain on your wallet. But here’s some good news: understanding how GST/HST works and taking advantage of tax breaks can help you stretch your budget further.

 

What Is GST/HST?

In Canada, the Goods and Services Tax (GST) is a federal tax applied to most goods and services, while the Harmonized Sales Tax (HST) is a combination of the federal GST and provincial sales taxes in certain provinces. The current GST rate is 5%, while HST rates range from 13% to 15% depending on the province.

Some provinces, like Alberta, only charge the 5% GST, while others, like Ontario and Nova Scotia, include HST in their pricing. Knowing the tax rate in your province can help you better calculate your total cost when shopping.

 

GST/HST Holiday Breaks and Benefits

1. Tax-Exempt Goods: Did you know some items are tax-free? Many essential goods such as basic groceries, prescription medications, and medical devices are exempt from GST/HST. This means if you’re buying holiday treats or health-related gifts, you won’t pay extra tax on these items.
2. Rebates for Low-Income Canadians: The GST/HST credit is a quarterly payment designed to help low- and modest-income Canadians offset the cost of GST/HST. If you qualify, you’ll receive a payment directly from the Canada Revenue Agency (CRA). Make sure your 2024 tax return is filed to continue receiving this benefit during the holiday season.
3. Shop Local, Save More: Some provinces offer rebates or reduced rates for certain goods or services when purchased locally. For example, small businesses may include taxes in their pricing, making it easier to budget.
4. Tax-Free Gifts: Gifts of cash are not subject to GST/HST, so consider giving monetary presents this year. It’s a simple, tax-free way to support your loved ones.
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Tips for Maximizing Holiday Savings

• Take Advantage of Sales: Many retailers offer pre-tax discounts during the holidays. Combine these with tax-free items to maximize savings.
• Support Local Businesses: Shopping at local stores not only boosts the community but may also come with provincial tax benefits.
• Leverage Online Deals: While most online purchases are subject to GST/HST, look for promotions offering free shipping or discounted rates that can offset the tax.
• Track Tax-Deductible Expenses: If you’re self-employed or run a small business, keep receipts for holiday-related purchases. Decorations, client gifts, or holiday events could qualify as deductible expenses.
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Final Thoughts

The GST/HST may seem like a small percentage, but it adds up during the holiday season. By being mindful of tax-exempt goods, using rebates, and shopping strategically, you can reduce the impact of taxes on your holiday budget. This season, let’s focus on spreading cheer while keeping our finances in check.

Happy holidays, Canada!