As the 2024 tax season approaches, Canadian taxpayers, especially those with complex financial situations, should start preparing early to ensure a smooth filing process. Whether you have a sole proprietorship, rental income, or capital gains, understanding the key changes and deadlines can help you maximize your benefits and avoid penalties.
Mark your calendar with these important dates:
February 24, 2025
The start date for filing your 2024 tax return online.
April 30, 2025
The deadline for most individuals to file their tax return and pay any outstanding taxes. Filing on time helps you avoid late-filing penalties and interest.
June 15, 2025
The deadline for self-employed individuals and their spouses to file their tax return for their self-employed income earned. However, any tax obligations must still be paid by April 30, 2025.
One of the most significant changes for the 2024 tax year involves capital gains. The government initially proposed increasing the capital gains inclusion rate from 50% to 66.7% starting June 25, 2024. However, this change has been postponed to January 1, 2026. The CRA has reverted to the 50% inclusion rate for 2024, but taxpayers reporting capital gains will have until June 2, 2025, to file their returns without incurring penalties.
There are a few significant tax credits and benefits have been introduced or modified for the 2024 tax year:
Home Buyers’ Plan (HBP) Withdrawals
The withdrawal limit has increased to $60,000 for first-time home buyers.
Home Accessibility Credit
Up to $20,000 of expenses are eligible for this credit, providing $3,000 in tax savings for eligible home modifications.
Multi-Generation Home Renovation Tax Credit
This refundable credit offers up to $7,500 for expenses related to building a secondary suite for a senior or disabled family member.
The 2024 tax season brings several enacted changes that will impact personal income tax filings:
Non-compliant Short-term Rentals
Taxpayers can no longer deduct expenses related to operating a non-compliant short-term rental. This applies to properties rented for fewer than 90 consecutive days in areas where such rentals are prohibited or do not meet provincial or municipal registration requirements.
Alternative Minimum Tax (AMT)
The AMT rate has increased from 15% to 20.5%, and the basic exemption has risen to $173,205. The AMT base has been broadened to include more items, potentially affecting more high-income taxpayers.
For 2025, the contribution limits for registered plans have increased:
RRSP
The dollar limit is now $32,490, up from $31,560 in 2024.
RPPs
The money purchase limit is $33,810, and the defined benefit limit is $3,756.
Deferred Profit Sharing Plans
The limit has increased to $16,905.
Note: TFSA: The limit remains at $7,000 in 2024.
Be vigilant about tax-related scams. The CRA provides resources to help you recognize and avoid fraudulent activities. Ensure your personal information is up-to-date in My Account and provide an email address for notifications about account changes.
Navigating complex tax situations can be challenging. Consider consulting a tax professional at Padgett to ensure you maximize your benefits and comply with all regulations. Their expertise can provide peace of mind and help you optimize your tax strategy and net income.
By staying informed and proactive, you can approach the 2024 tax season with confidence. For personalized advice and tax preparation services, contact Padgett and experience our excellent service today.
