How to raise your chances of getting a bigger tax refund next year

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Canadians typically affiliate tax season with submitting returns in March or April, however now could be a important time to plan your taxes, says one skilled.

“12 months-end is absolutely the important time to do your tax planning,” Jamie Golombek, managing director of tax and property planning at CIBC Personal Wealth and a Monetary Submit columnist, mentioned in a recent interview with FP’s Larysa Harapyn. “There are very particular issues that you might want to do earlier than the top of the 12 months to reap these advantages come subsequent submitting season.”

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Tax-loss selling is one place to begin, however maybe not for these seeking to offset capital positive factors in international forex investments.

Golombek mentioned traders who bought U.S. shares 10 or 11 years in the past, when the U.S. greenback was on par with the Canadian greenback, ought to take into account recalculating their foreign-exchange losses as a result of a loss on paper could be a acquire when transformed to Canadian {dollars}.

“Tax-loss promoting will really backfire on you, so remember the international change when doing these acquire and loss calculations,” he mentioned.

First-time homebuyers may take benefit by opening a first home savings account (FHSA) earlier than the top of the 12 months. The account permits first-time homebuyers to contribute as much as $8,000 per 12 months and obtain a tax deduction for his or her contributions.

Golombek mentioned the good thing about opening an account in 2023, even in the event you solely contribute $100, is you can carry ahead the unused room (an extra $7,900 on this case) and contribute extra the next 12 months.

“There’s no danger … so folks ought to get on that in the event that they’re a first-time homebuyer,” he mentioned.

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Golombek additionally suggested householders to look at the brand new credit accessible for 2023, such because the multi-generational residence renovation tax credit score. For instance, Canadians who’ve renovated to create a secondary dwelling for a senior (65 or older) or an individual with a incapacity can get a 15 per cent federal credit score on as much as $50,000 in bills.

He additionally provided some recommendation for the highest one per cent of revenue earners ($173,000 and above) relating to new alternative minimum tax (AMT) laws.

“Beginning Jan. 1, 2024, AMT might have a way more important influence for sure taxpayers,” he mentioned.

Thus far, capital positive factors have been 15 per cent taxable, however within the new 12 months, they are going to be 100 per cent taxable. Nonetheless, there are methods to keep away from the AMT, Golombek mentioned, together with realizing a big acquire, promoting a property or making massive charitable donations earlier than year-end.

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