With the annual ritual of tax filing on the horizon for the 2023 tax year, it becomes important to review the less well-known filing requirements and deadlines that affect everyone. With that in mind, outlined below are the important dates coming up as well as some of the tax changes that affect everyone in their tax planning and filing requirements.
As a general trend, more reporting and detail is now being required by CRA and it remains the individual taxpayers’ responsibility to be aware of and meet the requirements for the legislation.
Important Dates
With 2024 being a Leap Year, filing deadlines in many cases are adjusted for your 2023 tax filings.
RRSP Contribution Deadline: February 29th, 2024, is crucial for those looking to contribute to their Registered Retirement Savings Plan (RRSP) for the 2023 tax year. Note that 2024 is a Leap Year so the usual deadline of March 1st is changed to February 29th, 2024.
“T” Slips: By February 29th you should have received all your tax information slips apart from T3 Trust slips (mutual funds, insurance companies, Trusts) which are due April 1st.
Filing Deadline for Trusts: April 1st, 2024, is the deadline for filing T3 Trust returns as March 31st is a Sunday. Note that this includes new filing requirements for the 2023 tax year such as Bare Trusts.
Filing Deadline for Individuals: Income Tax returns, including T1135 – Foreign Income Verification and UHT-2900 – Underused Housing Tax must be filed by April 30, 2024.
Filing Deadline for the Self-Employed: If you or your spouse are self-employed, your deadline is June 17, 2024, as the 15th is a Saturday.
2023 Tax Changes
While most changes are subtle in nature for 2023, there are changes that can affect your filings and Wealth Retention.
- Indexing of personal exemptions, tax brackets and various other exemptions have been indexed for 2023 at a rate of 4.7%. This means a Personal Exemption amount is now $15,000 and the base Federal tax bracket is 15% on the first $53,359 of taxable income.
- Maximum RRSP Contribution room earned, based on your 2022 income tax return is $30,780, plus any unused RRSP Contribution room from prior years.
- Working from Home? The simplified method of $2 per day for Office in the Home expense is no longer available and the full claim and itemization of expenses is now required.
- Use your Personal Passenger Vehicle for Work? The maximum Capital Cost amount has been increased to $36,000 plus GST/HST. Monthly Passenger Vehicle lease payment allowance has been increased to $950 plus GST/HST per month.
- RESP Withdrawals: First time withdrawals for RESP accounts have been increased from $5,000 to $8,000 in the first 13 weeks of qualifying full-time post-secondary education. Part-time attendance at post-secondary education is increased to $4,000 from $2,500.
Additional Filing Requirements
Trusts and Bare Trusts
New for the 2023 calendar year is increased filing requirements for Trusts. Included in these changes is the requirement to file a T3 Trust return for Bare Trusts.
Bare Trusts, while they have always existed, were not a required filing until the 2023 year. Many, many Bare Trusts exist, but most individuals are not aware that a Trust situation exists and therefore would not be aware of reporting requirements.
In its most basic form, a Bare Trust exists when one individual or entity holds Legal Ownership of Assets for the Beneficial Ownership of another individual or entity. For example, an adult child holds Legal Ownership of a property for the Benefit of an elderly parent. This is a Bare Trust and while there are no tax consequences, filing is required.
Underused Housing Tax
Filing requirements of the Underused Housing Tax remain unchanged for individuals and require filing by individual who own residential property and ARE NOT Canadian citizens of Permanent Residents of Canada using form UHT-2900. There are changes for Private Canadian Corporations that were owned and controlled by Canadian Citizens or Permanent Residents of Canada. See your Tax Specialist or Financial Advisor to see how this may affect you.
Foreign Income Verification Statement
Foreign Income Verification Statement reporting requirements remain unchanged for the 2023 tax year for entities owning foreign assets greater than $100,000 at Fair Market Value anytime during the year using form T1135.
Summary:
Tax legislation changes constantly and while many changes can be classified as tweaks or specific to certain groups in the population, there are a couple of facts that should not be ignored.
- You have the Right to structure your financial affairs to the best overall advantage of yourself and the Family Unit, within the framework of the legislation.
- You may choose if you want to use the annual tax filing ritual as a “recording of history” or, as a “planning tool” to reduce your overall tax burden.
Contact your Tax Specialist or Financial Advisor today to plan your 2024 tax situation or Talk to Us … we can help!
This article has been provided by www.theaccountingplace.com. It is intended for informational purposes only and is not a substitute for professional tax advice. Tax laws and interpretations change frequently, and their application can vary widely based on the specific facts and circumstances involved. We strongly recommend consulting with a professional tax planner to receive advice tailored to your individual situation and to ensure compliance with the current tax laws and regulations. Do not rely solely on the information contained in this article for making tax-related decisions.