Important Tax Updates, Tax Breaks, and Tax Credits You Must Not Miss in 2024
Stay updated with current accounting standards, business compliance, tax preparation tips, and latest news.
23 Feb 2024
For tax years ending after December 30, 2023, trustees of bare trusts are required to file T3 trust returns every year.
This means that one has to file information on stakeholders such as:
The maximum pensionable earnings for CPP will rise from $66,600 to $68,500.
This hike will result in a $113 CPP tax increase for both employers and employees in the 2024 tax year.
Started in 2009, the Homebuyers' Amount is for two groups of people: those who are disabled and those who are buying a home for the first time. They can claim a non-refundable tax credit of $10,000.
However, there's a condition – they must have purchased a qualifying home that fits into these categories:
In the third quarter of 2023 alone, 17,186 people left B.C. for another province or territory. Many Canadians are migrating out of cities like Vancouver and Toronto due to the high cost of living.
The good news is that if you move more than 40 kilometers away and move to accept a new job, work position, or school, you can deduct many of your associated moving costs.
Note: If you are moving in or out of B.C., you must get a free consultation with a Tax accountant Surrey, to discuss the process of claiming moving expenses.
Important Tax Updates, Tax Breaks, and Tax Credits You Must Not Miss in 2024
Although the CRA hasn’t introduced any major new tax credits for 2024, there were some technical updates and minor adjustments. Therefore, it becomes important to check out these adjustments and revisit some of the most common tax breaks you may want to discuss with your accountant or tax preparer. That’s why, this article is here to help you make an informed decision when you search for a “Chartered Professional Accountant near me” and schedule your next meeting. Find out what’s best for your unique circumstances, and don’t forget to book a free consultation with a CPA at CJCPA.Major Changes To Taxes in 2024
While there weren’t any new tax credits introduced this year, there were several crucial changes made to Canadian tax codes for the 2024 tax season. Although these changes won't impact your tax returns for 2023, they might influence your financial outcome when you file taxes the following year. Here are some important changes that will impact your taxes in 2024, as outlined in the latest report from the Canadian Taxpayers Federation.NEW RULES FOR BARE TRUSTS
What is a bare trust?
A bare trust is a special type of trust where the person in charge (trustee) only follows the instructions of those who benefit from it (beneficiaries). The trustee legally owns the property, but the beneficiaries have the actual ownership and full control over what the trustee does with the property. Traditionally in Canada, bare trusts didn't have to submit a trust return for tax purposes. This is because of the way they are taxed, allowing the transfer of property without causing tax events, as long as there's no change in who ultimately owns and benefits from the property.New trust reporting requirements for T3 Returns
For tax years ending after December 30, 2023, trustees of bare trusts are required to file T3 trust returns every year.
This means that one has to file information on stakeholders such as:
- Trustees
- Beneficiaries
- Anyone who can influence the trust
Other Noticeable Changes
Higher federal income taxes
Because of the growing payroll taxes, Canadian workers will experience a rise in their federal income taxes. Although the increases are not substantial, they signify a gradual shift in tax brackets. The additional amount you can anticipate paying in federal income taxes next year depends on your income.- $30,000 - $9 more tax
- $40,000 - $12 more tax
- $50,000 - $15 more tax
- $60,000 - $18 more tax
- $80,000 or more - $347 more tax
Increase in maximum pensionable earnings (CPP)
The maximum pensionable earnings for CPP will rise from $66,600 to $68,500.
This hike will result in a $113 CPP tax increase for both employers and employees in the 2024 tax year.
Increased Employment Insurance (EI) tax rate
In 2024, both workers and employers will be facing increased EI taxes. Employees will be shelling out $1,049 in EI taxes, based on a maximum insurable earnings cap of $63,200. This marks a $47 bump from the 2023 tax year.Increased carbon and alcohol taxes
Starting April 1, 2024, the carbon tax is going up from $65 to $80 per tonne. That translates to taxpayers dishing out 17.6 cents per liter of fuel at the pump, up from the previous rate of 14.3 cents per liter. Furthermore, in 2024, the government is planning to hike alcohol taxes by 4.7 percent. The Canadian Taxpayers Federation anticipates that this booze tax bump will end up costing Canadians a whopping $100 million.Common Tax Advantages to Claim in 2024
Basic Personal Amount (BPA)
The Basic Personal Amount (BPA) is a non-refundable tax credit in Canada that reduces the amount of federal income tax you owe. It's essentially a tax-free amount of income that everyone gets. The Purpose of BPA is to provide tax relief to all individuals, especially those with lower incomes. BPA for the 2023 tax year is $15,000. Any taxpayer can claim this non-refundable tax credit, providing a great opportunity to cut down (or even wipe out) your income taxes. If you make less than $15,000 a year, you don't have to pay federal income taxes because you earn below a certain limit. But if you make more than $15,000, you can still reduce the amount of taxes you owe by using something called the basic personal amount. Let's say you make $60,000. With the basic personal amount, you can subtract $15,000 from your income. This means you'll only have to pay taxes on the remaining $45,000 instead of the full $60,000. It's a way to hang on to more cash in your pocket!Home Buyers Amount
Started in 2009, the Homebuyers' Amount is for two groups of people: those who are disabled and those who are buying a home for the first time. They can claim a non-refundable tax credit of $10,000.
However, there's a condition – they must have purchased a qualifying home that fits into these categories:
- Single-family house
- Condominium
- Semi-detached house
- Mobile home
- Apartment in duplex, fourplex, triplex, or apartment building
- Townhouse
Home office Expenses
The percentage of work-from-home Canadians has tripled since 2010. While working from home comes with several perks and benefits, it also comes with increased home office expenses. As a small business owner, you can write off several home office expenses. Besides, work from home employees can also get credit for their extra expenses, such as:- Utilities (electricity, heat, water)
- Home internet fees
- Rent paid for your home
- Maintenance and repair costs
Moving Expenses
In the third quarter of 2023 alone, 17,186 people left B.C. for another province or territory. Many Canadians are migrating out of cities like Vancouver and Toronto due to the high cost of living.
The good news is that if you move more than 40 kilometers away and move to accept a new job, work position, or school, you can deduct many of your associated moving costs.
Note: If you are moving in or out of B.C., you must get a free consultation with a Tax accountant Surrey, to discuss the process of claiming moving expenses.
