As we enter tax season, staying informed about the latest changes can help you maximize deductions and avoid surprises. Here are the key updates for the 2024 tax year that every Canadian taxpayer should know.
1. Increase in Basic Personal Amount
The Basic Personal Amount (BPA) has increased to $15,705, reducing taxable income for most Canadians. This adjustment means you can earn more before paying federal income tax.
2. Changes to the First-Time Home Buyers’ Credit
The First-Time Home Buyers’ Tax Credit (HBTC) has doubled from $5,000 to $10,000, offering a bigger tax break for those entering the housing market for the first time.
3. Canada Carbon Rebate Updates
The Canada Carbon Rebate (formerly the Climate Action Incentive) will now be provided through quarterly payments, making it easier to receive this benefit without waiting for tax season.
4. TFSA Contribution Limit Increased
The 2024 contribution limit for Tax-Free Savings Accounts (TFSA) has risen to $7,000, providing more opportunities for tax-free growth.
5. Expanded Canada Workers Benefit (CWB)
More low-income workers will qualify for the enhanced Canada Workers Benefit (CWB), offering additional financial relief for those earning below a certain threshold.
6. New Deduction for Tradespeople
A deduction for tools purchased by tradespeople has increased to $1,000, helping skilled workers offset equipment costs.
7. Interest on Student Loans Now Fully Deductible
Federal interest on student loans is now fully tax-deductible, reducing the financial burden on recent graduates.
8. Alternative Minimum Tax (AMT) Adjustments
High-income earners and investors should note that AMT rules have changed, potentially impacting those with significant capital gains, stock options, or dividend income.
9. Home Office Expenses for Remote Workers
If you work from home, ensure you review the latest updates on home office expense deductions, as the simplified flat rate method may not be available after 2023.
10. New Digital Services Tax (DST) for Businesses
Businesses offering digital services should be aware of new tax regulations impacting online platforms and multinational corporations.
Stay Ahead This Tax Season
Navigating tax changes can be overwhelming, but our CPA team at Rozvytok is here to help. Whether you need assistance maximizing deductions, optimizing tax planning, or filing your return efficiently, we’ve got you covered.
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