It’s a new year, which means that the 2023 tax year is officially over and Canadians can begin filing their tax returns. The tax filing deadline to avoid late penalties is Tuesday, April 30.
Although some may wait until the last minute to start their taxes, I’ve always been a proponent of preparing ahead of time. This will save you time and help you take full advantage of the numerous tax breaks and credits offered by the CRA.
Below, I’ll share some of the most important tax breaks you should look into this tax season and review some of the key changes to Canada’s tax code for 2024.
IMPORTANT TAX BREAKS AND CREDITS YOU CAN CLAIM
Although the CRA hasn’t introduced any new tax credits this year, these are some of the most common tax breaks you may want to discuss with your accountant or tax preparer to help you save more on your taxes.
Basic personal amount
The basic personal amount (BPA) for the 2023 tax year is $15,000. This non-refundable tax credit can be claimed by all taxpayers and is an excellent way to reduce (or even eliminate) your income taxes.
Taxpayers who earn less than $15,000 are exempt from paying federal income taxes since their total annual income is below the threshold. Those who earn more than $15,000 can use the basic personal amount to reduce their total tax liability.
If you earn $60,000, for example, you can subtract the $15,000 BPA and will only be taxed on the remaining $45,000.
Homebuyers
Introduced in 2009, the Homebuyers’ Amount allows disabled and/or first-time home buyers to claim a non-refundable tax credit of $10,000, provided they purchased a qualifying home that falls into one of these categories:
Single-family house
Condominium
Semi-detached house
Mobile home
Apartment in duplex, triplex, fourplex, or apartment building
Townhouse
If you’ve recently purchased a home and have not applied for this tax break before, you can also file for it retroactively. For homes purchased in 2021 or earlier, you can claim a $5,000 credit, and for homes purchased in 2022 or 2023, you can claim the full $10,000 credit.
Work from home expenses
The percentage of Canadians working from home has tripled since 2010, according to a report from Statistics Canada. While working from home comes with a number of perks and benefits, it also comes with increased home office expenses.
As a small business owner, you can write off a number of home office expenses. However, employees who work from home can also get credit for their extra expenses, including:
Utilities (electricity, heat, water)
Home internet fees
Rent paid for your home
Maintenance and repair costs
In late January 2024, the CRA will be releasing an updated home office expense sheet to make calculating your deductions easier. If you work from home, be sure to keep an eye out for it.
Moving expenses
In 2023, many Canadians moved away from more expensive city centres like Vancouver and Toronto to reduce their cost of living.
The good news is that if you moved more than 40 kilometres away and moved to accept a new job, work position, or school, you can deduct many of your associated moving costs.
Major changes to taxes for 2024
While there weren’t any new tax credits introduced this year, there were several important changes made to Canadian tax codes for the 2024 tax season. While these won’t affect your 2023 tax returns, they may affect your bottom line when filing next year’s taxes.
Here are some of the key changes that will affect your taxes in 2024, according to the most recent report from the Canadian Taxpayers Federation.
Higher federal income taxes
Due to rising payroll taxes, Canadian employees will see an increase in their federal income taxes. The increases aren’t major but still represent a creeping bracket. Here’s how much more you can expect to pay in federal income taxes next year, based on your income:
$30,000 – $9 more tax
$40,000 – $12 more tax
$50,000 – $15 more tax
$60,000 – $18 more tax
$80,000 or more – $347 more tax
Increase in maximum pensionable earnings (CPP)
The maximum pensionable earnings for CPP will increase from $66,600 to $68,500, which will result in a $113 CPP tax increase for both employers and employees in the 2024 tax year.
Increase Employment Insurance (EI) tax rate
In 2024, both employees and employers will be subject to higher EI taxes. Employees will pay a total of $1,049 in EI taxes with a maximum of insurable earnings of $63,200, which is a $47 increase from the 2023 tax year.
Increased carbon and alcohol taxes
On April 1, 2024, carbon taxes will increase from $65 to $80 per tonne, which means taxpayers will be paying 17.6 cents per litre of fuel at the pump, compared to the previous rate of 14.3 cents per litre.
In addition, the federal government will be increasing alcohol taxes by 4.7 percent in 2024. The Canadian Taxpayers Federation expects this alcohol tax increase will cost Canadians $100 million.
New rules for bare trusts
A bare trust is a specific kind of trust where the trustee has no rights other than to deal with the property as instructed by the beneficiaries.
The trustee holds the legal title, while the beneficiary has the beneficial ownership and complete control over the trustee’s actions relating to the property.
Traditionally, bare trusts were not required to file a trust return in Canada due to their tax treatment, allowing for property transfers without triggering taxable events unless the beneficial ownership changes.
The new reporting requirements require trustees of bare trusts to file annual T3 trust returns for tax years ending after December 30, 2023.
This includes providing detailed information about stakeholders such as:
Trustees
Beneficiaries
Anyone who can influence the trust
Although these changes are designed to enhance transparency, CPA Canada has expressed concerns that many well-intentioned taxpayers could get caught off guard and face tax penalties if they fail to meet the new filing requirements.
Since the change will go into effect for next year’s tax season, it’s a good idea for trustees and beneficiaries of bare trusts to get familiar with the new requirements.
What is the best way to take advantage of tax breaks?
Thanks to free and low-cost e-filing software, filing your taxes has never been easier. However, the downside is that many taxpayers fail to take full advantage of tax credits.
The easiest way to make sure that you’re getting all the breaks you’re owed is to enlist the help of a trusted accountant or tax preparer. However, if you’re filing yourself, you can still prepare by reading up on all of the major tax credits and using a trusted tax filing software that will help guide you through all of your potential deductions.
Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
