Tax Tip Thursday

CRA have made some changes for 2025.

Capital Gains

The really big one that is on the table that is causing a lot of people grief is the proposed capital gains change announced last year, but never passed.

It would see corporations having an inclusion rate of 67% on all capital gains (instead of 50%) previously.  For individuals, the 67% inclusion rate kicks in once you reach $250k in capital gains.  The issue is that it was not passed and now we have to wait for a new government.

Although there is still no Bill tabled for the capital gains inclusion rate increase, the CRA is proceeding with the changes unless the government falls on a non-confidence vote directly related to the capital gains proposals.

All 3 parties have said, they would not pass the bill, so that would shut it down.

Short answer is we may have to wait until March to get a straight answer.

If you feel this situation applies to you, be sure to see us soon, so we can map it out for you.

CRA simplifies sign-in process before 2025 tax season

As the 2025 tax season approaches, the Canada Revenue Agency has refreshed its website to make it easier for Canadians to sign in to their online accounts.

The CRA said in a news release on Wednesday that it has simplified its sign-in process.

CRA account holders can now access all services in My Account, My Business Account, and Represent a Client with one click as opposed to signing in separately, which was the case before.

Users can sign-in with their existing username and password and don’t have to register again, CRA says.

Filing and due dates

Canadians can start filing their 2024 tax returns online on Feb. 24 and the deadline to do so is April 30.  April 30 is a Wednesday so they are due that day.  If you are a Sole proprietor, the deadline is June 16, as June 15 is a Sunday.

Automatic Tax Filing

Some people will be happy to hear that the federal government is pushing ahead on automatic tax filing, with a national pilot program expected to continue this year.

The CRA is planning to increase its invites for the SimpleFile by Phone service to two million Canadians total — up from 1.5 million — so they can file their taxes automatically for the 2025 season.

Donations eligible until February 28, 2025

Because of the mail strike, the CRA extended the date to February 28 and they will be eligible for the 2024 tax year.

GST/HST 2 month vacation – rebate

Some retailers might find it difficult or impossible to offer the temporary zero GST/HST rate for eligible items at the point of sale because their systems may be too complex to reprogram. If a retailer charges the GST/HST at the time of purchase, you can claim a rebate from the Canada Revenue Agency (CRA) by keeping your detailed receipts and submitting an application.

Please keep in mind that if you come to us to handle it for you, you find it is NOT cost effective at all.  If you are thinking of chasing these rebates, consider the fact that you will likely need to do it yourself.

RRSP maximum and timing

The RRSP maximum this year is $32,490 and you have until March 3, 2025 to make the contribution, but do not wait until the last minute!

FHSA

The deadline is passed for 2024, but if it is a consideration for yourself, I urge you to open one up now and start making contributions now.  You can set up a preauthorized debit to your account.  If you have money in a TFSA and qualify for an FHSA, it is well worth it to withdraw and contribute to the FHSA instead!

Vehicles for business

If you have not been keeping a trip log for the business use of your vehicle, start now! This is essential for business owners as well as for employees driving a company vehicle.  And make sure you take your odometer reading today!

Make sure you know what changes might have an impact on your taxes! Make An Appointment today!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.