As the personal tax season approaches, staying informed about the latest personal tax updates is crucial for individuals. This blog will provide a comprehensive guide on What’s New For Tax Preparation in 2024.
Importance of Hiring an Expert
Keeping up with the ever-changing tax laws can prove to be a mammoth task without the help of a reliable accountant. Moreover, not staying informed about these changes can lead you to pay more taxes than you need! But don’t worry, we have got you covered. With over 40 years of experience, CPA4IT can help you navigate these changes easily.
Our mission is to help our clients organize finances, create wealth, and transform wealth into a legacy. If you would like to learn more about how we can help you, book a FREE consultation with our experts today to discuss this further.
Key Updates for 2023 Tax Year
Unpaid Tax Penalties
The Canada Revenue Agency (CRA) has significantly increased its unpaid tax penalty from 5% to 10%, with an additional 2% for each month the amount remains outstanding, up to 20 months. This change primarily impacts sole proprietors who must make lump-sum payments by April 30th.
Expired COVID-19 Benefits
Various COVID-19 benefits, including the Canada Worker Lockdown Benefit, Ontario Staycation Tax Credit, and work-from-home expenses, have expired and are no longer applicable for the 2023 tax year.
New Grocery Rebate
A new grocery rebate was introduced in 2023 for individuals who were eligible for the GST/HST credit in 2021 or 2022. The rebate amount is approximately double the GST/HST credit amount.
Easier Disability Tax Credit Application
The CRA has simplified the application process for the Disability Tax Credit. Applicants can now complete certain sections online through their My CRA account and provide a reference number to their medical practitioner for the remaining part of the application.
Increased Basic Personal Amount
The basic personal amount has been increased to $15,000 for 2023, which means the first $15,000 of income is tax-exempt at the federal level.
Adjusted Tax Brackets and Increased Limits
Tax brackets have been adjusted to account for inflation. Additionally, the Tax-Free Savings Account (TFSA) limit has increased to $7,000, and the Registered Retirement Savings Plan (RRSP) limit is now $30,780. The Old Age Security (OAS) taxable income limit has also been raised to $81,761.
Figure: Updated tax brackets.
Changes to CPP Contributions
The Canada Pension Plan (CPP) contribution rate has increased by 6.5% for 2023, with the maximum pensionable earnings set at $66,600 with a basic exemption of $3500 for 2023.
Important Tax Deadlines
Here are some important tax deadlines to be aware of for your personal tax preparation.
Figure: Important personal tax deadlines.
Leveraging CPA4IT’s Personal Tax Tools
In order to aid our clients, we have developed a suite of tax tools designed to simplify the organization and submission of their tax documents. These tools include:
1. CPA4IT’s Personal Tax Checklist
Our comprehensive Personal Tax Checklist outlines all the income types and expenses you may qualify for. It highlights new income sources, such as the T4FHSA for the first-time home buyers introduced in 2023, and provides a detailed list of eligible expenses under the T2200 declaration of employment. This checklist is updated yearly to reflect any changes in tax regulations and helps ensure that you don’t miss out on any deductions or credits.
2. CPA4IT’s Personal Tax Info Sheet
This mandatory info sheet ensures that we have your most up-to-date information for filing your personal tax returns. It includes new information questionnaires required by the CRA each year, such as questions about incarceration, indigenous status, mental impairment, and organ donor registration in Ontario. Completing this sheet annually is crucial for accurate and compliant tax filing.
3. Specialized Worksheets
To further assist in organizing your tax information, we have introduced various worksheets tailored to different aspects of your tax return:
- Statement of Real Estate Rental Worksheet: Organizes your rental income and expenses.
- Self-employed Statement of Business or Professional Activities Worksheet: Helps self-employed individuals summarize their business income and expenses.
- T2200 Declaration of Conditions of Employment Worksheet: For employees with work-related expenses.
- Charitable and Political Donation Worksheet: Tracks your donations throughout the year.
- Medical Expense Worksheet: Summarizes your medical expenses, ensuring you meet the eligibility criteria for claiming them on your tax return.
These worksheets are designed to be user-friendly, with features and formulas that automatically summarize your information, making it easier to review and submit your tax data accurately.
Benefits of Using CPA4IT’s Tax Tools
- Efficiency: Streamlines the tax preparation process, saving you time and effort.
- Accuracy: Helps ensure that all relevant income sources and deductions are accurately reported, reducing the risk of errors or omissions.
- Maximized Deductions: By providing a comprehensive list of potential deductions and credits, our tools help you maximize your tax savings.
- Ease of Use: The user-friendly design of our tools makes tax preparation less daunting, especially for those who may not be familiar with tax regulations.
- Audit Preparedness: Keeping organized records using our tools can prove invaluable in the event of an audit by the CRA.
By leveraging these tax tools, our clients can navigate the complexities of tax filing with confidence, knowing that they are well-prepared to optimize their tax returns and comply with CRA regulations. Additionally, our industry knowledge and Audit Protection Service also helps our clients to maximize their retained earnings so they can transform their wealth into a legacy.
We can help!
Navigating through the ever-changing tax laws without the help of an expert can prove to be a tedious task. Here at CPA4IT, our goal is to take over your financial worries so you can focus your time on where it matters – growing your business. Our tax strategies are designed to help you retain more of your hard-earned money by leveraging deductions you did not know about before.
If you would like to learn more about how we can help you, book a FREE consultation with our experts today to discuss this further.
