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5 BULLET FRIDAYS - Tax Mechanic News, Tips, Strategies
In this edition: Pizza Pizza Owner Breaks Down in Court / How to Save $2,355 in 2024 / The 2nd deadly tax sin: GREED
Tax Mechanic
December 08, 2023
Bite size tax and finance related information that could save you $$$
Pizza Pizza Owner Breaks Down During Heartbreaking Testimony
In a recent court case, the owner of a Pizza Pizza franchise appealed a CRA reassessment that he discovered after the deadline for objections had passed. A Polish immigrant who had built a successful business in Canada over the past decade, diligently reported and paid his taxes until he faced a reassessment five years ago.
Caught up in personal challenges, he missed the CRA correspondence regarding the reassessment until it was too late. He approached a local tax preparer to file a request for a time extension to appeal, but unfortunately, the request was dismissed.
Do you have - or want to launch - an appeal in tax court against a CRA reassessment? Call us!
Temporary Relief to Bare Trusts
With the federal government's new trust reporting rules coming into effect later this month, the CRA has provided temporary relief to bare trusts, which will now be subject to filing requirements for the first time. Bare trusts filing late for the 2023 tax year will not face late-filing penalties.
The new trust reporting regulations, applicable to trusts with year-ends of Dec. 31, 2023, and beyond, extend to various trust types, including bare trusts. Trustees are now obligated to report crucial information such as the names, addresses, and social insurance numbers of beneficiaries and other involved parties connected to a trust.
Trustees impacted by these new rules must file a T3 trust return, accompanied by a new Schedule 15 beneficial information return by the filing deadline of March 30 (or April 2 in 2024). Read more here!
How to Save $2,355 in 2024
You can strategically leverage various tax breaks offered by the CRA to mitigate your annual tax obligations. Among these, the basic personal amount (BPA) stands out as a valuable non-refundable tax credit accessible to all Canadian residents.
The fundamental purpose of the BPA is to grant a complete reduction from federal income tax for individuals with taxable income below the specified BPA threshold. Additionally, it extends a partial reduction for taxpayers whose taxable income surpasses the BPA.
The BPA has increased to $13,808 in 2021, $14,398 in 2022, and $15,000 in 2023, with future adjustments tied to inflation. In 2024, the BPA will be at $15,705 which will translate to a taxbill savings of $2,355.75 (15% of $15,705) in the following year. How is that for some good news? Read more here!
How does Canada address the housing crisis?
HST removal not enough
While the recent removal of the HST on new rental buildings is a noteworthy move by way of an enhanced GST/HST Rental Rebate, it may not be enough.
This rebate, applicable to purpose-built housing like apartments, student residences, and senior homes intended for long-term rentals, sees an increase from 36% to 100%. The measure is applicable to projects commencing construction between September 14, 2023, and December 31, 2030, with a completion date by December 31, 2035.
To qualify for this enhanced rebate, buildings must meet existing rebate criteria, have at least four private self-contained units or a minimum of 10 private rooms or suites in shared living spaces. Additionally, 90% of the building's units must be dedicated to long-term rentals.
Despite these efforts, builders are warning that additional financial incentives are needed from the government to effectively combat the housing crisis. These tax waivers are merely resetting costs to previous levels. Builders propose alternative strategies such as tax abatements, relaxed building requirements, or expedited approvals to further address the housing shortage. Read more here!
The 2nd deadly tax sin: GREED
“The second deadly tax sin is “greed”. Your sales and purchases on Kijiji, Etsy and eBay are available for all. Is your passion for vintage furniture really a hobby or are you running a small business from your living room and not declaring your profits on your tax return? “
Click here and watch my TikTok video to find out the rest!