Article provided by Jordan Fleguel, BNN Bloomberg
There are a number of new tax measures and reporting requirements Canadians should keep in mind when filing their 2023 returns this spring.
Here is a list of important tax changes and dates, with insights from a tax professional.
IMPORTANT DATES
Feb. 29 is the deadline for making RRSP contributions for the 2023 tax year.
For employers, T4, T4A and T5 slips must be submitted by Feb. 29 and must be submitted electronically if there are more than five of them to avoid penalties.
The deadline to file T3 trust returns along with Schedule 15 beneficial ownership information is April 2.
The deadline to file personal income tax returns is April 30, while self-employed individuals have until June 17.
CPP, EI CHANGES
As of Jan. 1, many Canadian earners will start seeing a larger portion of their paycheques going toward Canada Pension Plan contributions after the federal government added a second earnings ceiling.
The CPP now has two maximum amounts.
Previously, everyone earning over the base amount of $3,500 contributed a set portion of their income, up to a maximum amount that increases slightly every year.
Like before, the first tier will see workers contribute a set portion of their earnings to CPP up to a government-set threshold.
For 2024, people earning $68,500 or less won't see any changes to their current contribution rates.
Anyone with annual earnings higher than $68,500 now falls into a second contribution level that tops out at $73,200.
People in this group will pay an additional four per cent on the amount of money they make between $68,500 and $73,200, with a maximum additional contribution amount of $188.
John Oakey, vice president of taxation with Chartered Professional Accountants of Canada (CPA Canada) stated this, “What this means for employers is if you were to hire somebody in 2024 and you were paying them $73,200, it's going to cost you 7.5 per cent for employment taxes,”
“And employees are paying seven per cent, so that's 14.5 per cent that's going to fund the CPP and EI between employees and employers … that’s a lot of tax to be paid, and a lot of administrative burden.”
In addition to CPP contribution changes, the maximum insurable earnings ceiling for EI has risen to $63,200, up from $61,500 in 2023 and $60,300 in 2022 – an increase Oakey said was “normal course of business.”
TRUST REPORTING
Starting this spring, Canadians will be required to disclose beneficial ownership information for trusts, including so called “bare trusts,” when filing taxes for the previous year.
Oakey said this could become a “big issue” for some taxpayers who may not be aware they are in a trust.
As defined by the federal government, a bare trustee simply has legal ownership of a property “but has no other duties, obligations and responsibilities with respect to the property,” which remains in the practical control of the beneficiary.
SHORT-TERM RENTALS
The federal government has said it plans to deny tax expensing of certain short-term rental operators who are not compliant with existing provincial or municipal rules starting in 2024.
As of Jan. 1, people operating short-term rental properties in jurisdictions where they are banned, or any operators whose short term rentals are non-compliant with local requirements, will not be able to claim any expenses on the property.
This document was prepared by the Investment Products & Platforms Team. The opinions expressed in this document do not necessarily reflect the opinions of iA Private Wealth Inc. The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities. Contents copyright by the publishers. The information contained herein may not apply to all types of investors.
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