It’s tax time: Here’s what you need to know for the 2023 filing season

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Tax season is formally upon us and Canadians can now file their 2023 private tax returns on-line. Right here’s what’s new for the 2023 return, and a few issues to bear in mind as you get able to file.

The submitting deadline

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This 12 months’s normal tax submitting deadline is April 30, 2024. In case you or your partner or associate have self-employment earnings, your submitting deadline, which is often June 15, is prolonged by two additional days in 2024 to June 17, since June 15 falls on a Saturday this 12 months.

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In both case, should you owe tax for 2023, any steadiness due should be paid by April 30. After that date, the Canada Revenue Agency costs non-deductible arrears curiosity at a fee of 10 per cent, compounded day by day. That is the highest rate in more than 20 years.

Paper returns getting thinner

Greater than 90 per cent of Canadians file their returns electronically, however should you’re one of many two million Canadians who nonetheless file a paper return, it’s best to have already obtained your 2023 tax bundle within the mail.

You might have seen, nonetheless, that this 12 months’s bundle is thinner than normal. Based on the CRA, that’s as a result of the company is not printing line-by-line directions for the paper bundle. By making this modification, the CRA has decreased every bundle by roughly 30 pages, or about 20 per cent. The road-by-line directions are nonetheless obtainable on-line.

Discover of Evaluation (NOA)

Your NOA is a abstract of your tax return that the CRA sends out annually as soon as your tax return has been assessed. The NOA reveals the date your return was processed (essential in case you need to formally object to your evaluation by the deadline), and the small print of how a lot tax you owe or the quantity of refund it’s possible you’ll be receiving. Final 12 months, greater than half of Canadians obtained a refund, with the common quantity being $2,262.

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This 12 months, should you’re anticipating a refund however you’re not signed up for direct deposit, you’ll obtain a paper T1 NOA and cheque individually. The CRA has additionally made adjustments to the T1 NOAs “to offer extra full info that’s simpler to grasp.” For instance, the CRA just lately up to date the registered retirement financial savings plan desk included as a part of your NOA.

Working from house

In case you labored from house in 2023, it’s possible you’ll be entitled to write off your home-office expenses. For the 2023 tax 12 months, the CRA has said you’ll be certified to jot down off your home-office bills if your property workspace is the place you “principally” — that means greater than 50 per cent of the time — carried out your duties of employment for a interval of a minimum of 4 consecutive weeks throughout 2023.

Sadly, the CRA has scrapped the simplified technique for home-office bills which allowed staff working from house to say $2 per day, as much as $500. For 2023, you’ll must calculate your precise home-office bills and pro-rate them in keeping with work use.

You’ll additionally must get a signed copy of CRA kind T2200 Declaration of Circumstances of Employment out of your employer. The T2200 will not be submitted together with your return, however you’re required to maintain it in case the CRA asks to see it later.

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First Residence Financial savings Accounts (FHSA)

In case you contributed to or withdrew cash from the brand new FHSA in 2023, it’s best to have obtained a T4FHSA (First Residence Financial savings Account Assertion) exhibiting the quantity you contributed or withdrew in 2023. The utmost contribution quantity was $8,000, and you’ll select to deduct your entire contribution in your 2023 return, or it’s possible you’ll want to defer claiming the deduction to a future 12 months once you’re in a better tax bracket and the deduction could also be price extra.

To report FHSA actions in your 2023 return, there’s a brand new kind, Schedule 15, FHSA Contributions, Transfers and Actions. This schedule is used to inform the CRA that you just opened up an FHSA in 2023 (step 1), that you just made a contribution final 12 months (step 2), that you just’re claiming a deduction in 2023, or saving a few of that deduction for a future 12 months (step 3) and whether or not you made a qualifying withdrawal in 2023 to purchase your first house (step 4).

Multigenerational house renovation tax credit score

Among the many 2023 tax adjustments that took impact for this 12 months is the brand new Multigenerational Home Renovation Tax Credit. This refundable credit score was launched to help Canadians with the price of renovating a house to create a secondary unit so {that a} member of the family who’s greater than 65 years of age (or 18 in the event that they qualify for the incapacity tax credit score) can reside with you. The credit score is accessible for renovation bills incurred in 2023 and past.

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A “qualifying renovation” is a renovation, alteration or addition made to your property that’s of an everlasting nature and integral to the house. The renovation should be undertaken to ascertain a secondary unit inside your property wherein your relative might reside. A secondary unit is a self-contained housing unit with a personal entrance, kitchen, toilet services and sleeping space. It may be both newly constructed or created from an present residing area that didn’t already meet the native necessities to be thought-about a secondary dwelling unit.

If eligible, you may declare as much as $50,000 in qualifying expenditures for every qualifying renovation accomplished, as much as a most credit score of $7,500 for every declare you’re eligible to make. The declare is made on new Schedule 12, Multigenerational Residence Renovation Tax Credit score.

Anti-flipping rule

Beginning Jan. 1, 2023, any acquire from the disposition of a housing unit (together with a rental property) situated in Canada that you just owned or held for less than a year before sale is deemed to be enterprise earnings, not a capital acquire. It’s additionally not eligible for the principal residence exemption. There are, nonetheless, sure exceptions to this rule, similar to within the case of loss of life, incapacity, separation and work relocation.

Reimbursement of COVID advantages

In case your COVID-19 benefits were denied and also you had been required to repay them in 2023, they are often claimed as a deduction on line 23200 of your 2023 return.

Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Property Planning with CIBC Non-public Wealth in Toronto. [email protected].

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