As we approach the heart of tax season, we wanted to share some information to help simplify the process and draw your attention to some important changes for the 2023 tax year. Please note that these are a summary of some of the changes and may or may not apply to your situation. We would welcome the opportunity to complete a Wealth Plan with your family so that we can provide additional specific advice. As always, please consult with your tax professional prior to making any elections.
According to CRA’s data, millions of Canadians file an income tax and benefit return every year. For the 2023 tax-filing season, Canadians filed more than 32 million tax returns, and more than 92% of them were filed electronically. There were also more than 18 million refunds processed, and Canadians who had a tax refund received an average of around $2100!
Accessing your tax information
You can find how to access your tax slips and packages via your online access by clicking here.
Important dates
| February 19, 2024 | This is the first day you can start filing your 2023 tax return online. If you file on paper, you should receive your income tax package in the mail by this date. |
| April 30, 2024 | This is the deadline for most Canadians to file a tax return. By filing your tax return on time, you’ll avoid delays to any refund, benefit, or credit payments you may be entitled to. If you owe money to the CRA, this is also the payment deadline. You’ll avoid late-filing penalties and interest by filing and paying on time. |
| June 15, 2024 | If you or your spouse or common-law partner are self-employed, this is the deadline to file your tax returns. As this date falls on a Saturday, your return will be considered filed on time if the CRA receives it or it is postmarked on or before June 17, 2024. If you owe money to the CRA, you’ll still need to pay by April 30, 2024, to avoid interest. |
2023 Tax Rates
You can find your 2023 tax rate by clicking here.
What’s New for 2023
Below you will find a few of the key changes for individuals, business, and trusts. For a full list of changes and additional information, please visit the below links.
What’s new for the 2024 tax season – CPA Canada
What you need to know for the 2024 tax-filing season – Canada.ca
For Individuals:
| First Home Savings Account (FHSA): | The FHSA is a new registered account to help individuals save for their first home. Starting in 2023, contributions to an FHSA are deductible and the income earned in an FHSA is not taxable. Qualifying withdrawals from an FHSA to purchase a first home are also not taxable. |
| Multigenerational Home Renovation Tax Credit | This new refundable tax credit is available for up to $7,500 (15 per cent of a maximum claim of $50,000) of the costs of a qualifying renovation to an eligible dwelling that is completed to allow a qualifying individual to live with a qualifying relation. You can claim the credit (see T1, Schedule 12) for qualifying expenditures made or incurred after December 31, 2022, for services performed or goods acquired after that date. |
| Residential property flipping rule |
Starting on January 1, 2023, a new deeming rule applies to ensure profits from flipping residential real estate are always fully taxed. The rule deems profits from dispositions of residential property (including rental property) that was owned for less than 365 days to be taxable business income instead of capital gain, with exemptions for death, breakdown of a marriage or common-law partnership, eligible relocations, and other life events. The flipping rules also apply to assignment sales. |
| Working from home deduction |
The temporary flat rate method for claiming employees’ home office expenses only applied for 2020 to 2022 and is no longer available. For 2023 and future years, employees need to follow the detailed method to make these claims. |
For Business:
| Immediate expensing of capital |
This incentive was applicable to eligible property available for use before January 1, 2024. In the case of individuals and Canadian partnerships (all the members of which are individuals), this incentive remains in place for eligible property available for use before January 1, 2025. |
| Accelerated investment incentive | Eligible property for this incentive must be acquired after November 20, 2018, and be available for use before January 1, 2028. For eligible property that becomes available for use after 2023, a phase-out period applies reducing the overall capital cost allowance over 2024 to 2027. |
| Phase-out of zero- emission vehicles and automotive equipment | On March 2, 2020, the federal government proposed a temporarily enhanced Capital Cost Allowance (CCA) rate of 100 per cent for eligible zero-emission automotive equipment and vehicles. A phase-out period reducing the overall CCA rate from 100 per cent is in effect for eligible vehicles or equipment that become available for use after 2023. |
| Clean economy Investment Tax Credits (ITC) | The government continues to prioritize implementing new tax credits encouraging clean economy investments. In the 2023 Fall Economic Statement, the government announced effective dates for eligibility for the various ITCs. |
For Trusts:
| Beneficial ownership reporting | All trusts with tax years ending after December 30, 2023, must annually file a T3 Income Tax and Information Return, including additional beneficial ownership information (unless exclusions apply). This includes bare trusts, which were previously not required to file. For the 2023 tax year, the late-filing penalty for bare trusts would be relieved, provided the return and beneficial ownership information are ultimately filed. Other penalties may apply if failure to file was made knowingly or due to gross negligence.
You can find out more about trust reporting by clicking here. |
We hope you find the above information useful. Please let us know if you have any questions or concerns and we would be happy to discuss your individual situation.
All the best,
The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact your financial advisor.
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