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Tax professional Jamie Golombek affords recommendations on CRA deadlines and adjustments
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Tax season is quick approaching, however there are some things you have to be doing proper now to get a head begin.
A very powerful factor, tax professional Jamie Golombek stated, is to know your Registered Retirement Savings Plan (RRSP) contribution restrict.
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The managing director of tax and property planning at CIBC Non-public Wealth Administration stated being conscious of your restrict is essential for the reason that deadline to assert an RRSP deduction in your 2023 tax return is Feb. 29. Canadians can nonetheless contribute to their RRSPs after that deadline, however they received’t be capable to declare the deduction till their 2024 tax return.
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The best method to discover out your contribution restrict is to have a look at the discover of evaluation to your 2022 tax return. When you don’t have that, you may log into your account on the Canada Revenue Agency’s website.
“I’m a giant fan of RRSPs,” Golombek stated in a recent interview with the Monetary Put up’s Larysa Harapyn. “An RRSP continues to be the best method to save for retirement.”
He stated most Canadians ought to maximize their RRSP contributions, however that doesn’t imply they need to take out a mortgage to take action. A mortgage on this case solely is sensible in “very restricted and uncommon conditions” the place you may repay most, if not all, of it inside a number of months, corresponding to when you’ll quickly be getting a bonus, additional money or large tax refund.
“The issue is for those who can’t afford to pay it again, and this drags on for months, it turns into a really, very costly method to make an RRSP contribution,” Golombek stated.
Canadians who’ve been working from residence on a full-time or hybrid foundation must also get a head begin on determining their home-office bills earlier than the April 30 tax submitting deadline. That’s as a result of the CRA’s simplified methodology of claiming work-from-home bills is no longer available for the 2023 tax year.
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Between 2020 to 2022, staff had been allowed to assert $2 per day for day by day they labored from residence, as much as a most of $500. Now, staff can be required to tally up and prorate their bills earlier than claiming the ensuing quantity as a deduction. Workers may even want a replica of kind T2200 from their employer.
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When you owe the CRA money, it’s extra important “now than ever earlier than within the final twenty years” to pay the excellent stability by April 30, Golombek stated. That’s as a result of the CRA’s prescribed rate of interest for overdue or late taxes has hit 10 per cent for the primary time since mid-2001.
“For somebody in a prime tax bracket of fifty per cent or extra, you’d need to earn a fee of return of over 20 per cent on an equal funding to be higher off than not paying your tax debt,” he stated.
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