Personal Tax Information:
Top 10 Issues from 2024 tax update
Income tax package is thinner than usual
Starting in 2024, the CRA will no longer print line by line instructions in the paper package. This change was made after the CRA heard feedback from individuals who file on paper, stating they rarely use line by line instructions. By making this change, the CRA will reduce each paper package by approximately 30 pages, or about 20%.
Advanced Canada Workers Benefit
Advanced payments of the Canada workers benefit are now issued automatically under the new Advanced Canada workers benefit to those who received the benefit in the previous tax year. As a result, Form RC201, Canada Workers Benefit Advance Payment Application, was discontinued last year.
Deduction For Tools (Tradespersons and Apprentice Mechanics)
Starting in 2023, the maximum employment deduction for tradespersons’ eligible tools has increased from $500 to $1,000. As a result, the threshold for expenses eligible for the apprentice mechanics tools deduction has also changed.
Federal, provincial, and territorial COVID-19 benefit repayments
Federal, provincial, and territorial COVID-19 benefit repayments made in 2023, can be claimed as a deduction on line 23200 of your 2023 return.
First Home Saving Account (FHSA)
The FHSA is a new registered plan to help qualified individuals to save to buy or build a qualifying home. Starting April 1, 2023, contributions to an FHSA are generally deductible and qualifying withdrawals made from an FHSA to buy or build a qualifying home are tax-free. Notices of assessment will also include a table similar to the RRSP table for the FHSA balances where applicable.
Multigenerational home renovation tax credit (MHRTC)
The MHRTC is a new refundable tax credit that allows an eligible individual to claim certain renovation costs to create a secondary unit within an eligible dwelling so that a qualifying individual (a senior or an adult who is eligible for the disability tax credit) can reside with their qualifying relation. If eligible, you can claim up to $50,000 in qualifying expenditures for each qualifying renovation completed, up to a maximum credit of $7,500 for each claim you are eligible to make.
Home office expenses for employees
The temporary flat rate method used to claim a deduction for home office expenses does not apply to 2023. Therefore, eligible employees looking to claim a deduction for home office expenses for 2023 will be required to use the detailed method and get a completed Form T2200, Declaration of Conditions of Employment, signed by their employer.
Residential Property Flipping Rule
Starting January 1, 2023, any gain from the disposition of a housing unit (including a rental property) located in Canada, or a right to acquire a housing unit located in Canada, that you owned or held for less than 365 consecutive days before its disposition is deemed to be business income and not a capital gain, unless the property was already considered inventory of the taxpayer or the disposition occurred due to, or in anticipation of, certain life events.
Return of fuel charge proceeds to farmers tax credit
The Return of fuel charge proceeds to farmers tax credit is now available to self-employed farmers, or to individuals who are members of a partnership operating a farming business with one or more permanent establishments in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan.
Tax-Free Savings Account (TFSA)
A TFSA allows you to set money aside in eligible investments and watch those savings grow tax-free throughout your lifetime. Interest, dividends, and capital gains earned in a TFSA are tax-free for life. Your TFSA savings can be withdrawn from your account at any time, for any reason, and all withdrawals are tax free. As opposed to an RRSP, contributions made to a TFSA are not tax-deductible.
Your TFSA contribution room is the maximum amount that you can contribute to your TFSA. You will accumulate TFSA contribution room for each year that you are 18 or older and a resident of Canada, even if you do not file an Income Tax Return or open a TFSA.
For 2024 the annual maximum dollar amount that can be contributed to a tax-free savings account is $7,000. The total cumulative contribution room for a TFSA is $95,000 for those who have been 18 years or older and residents of Canada for all eligible years.
