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The filing deadline for your 2023 taxes is Tuesday, April 30, 2024. However, if you or your spouse/common-law partner are self-employed, your deadline to file your taxes is June 15.
If you file after the deadline and owe money to the government, you’ll be charged the following interest and late-filing penalties:
If you don’t owe taxes, you won’t be charged any penalties; however payment of any benefits that you’re entitled to, such as the Canada Child Tax Benefit (CCTB), will be suspended until you file.
One of the bigger tax updates this year is the change to the federal income tax brackets.
Before we talk about the changes , if you are new to taxes, you may be asking yourself, “What are they?”
Depending on your yearly income, you fall into one of five federal and five provincial tax brackets which are taxed at different rates. The system Canada uses is the graduated tax rate, so when your income increases, that amount, not your entire income, may be taxed at a higher tax bracket. For example, if you make $60,000 a year, the first $53,359 of your income would be taxed at 15%. The remainder of your income—which would be $6,641—would fall into the next tax bracket and would be taxed at 20.5%.
In 2023, the federal government adjusted the federal income tax brackets by 4.7% to account for inflation and therefore increased the thresholds of each federal income tax bracket. That means that you may pay a lower rate on more of your income because wages did not go up as much as inflation.
The new federal income tax brackets and tax rates are:
The basic personal amount (BPA) has changed as well. This is a non-refundable tax credit that can be claimed by all individuals filing their taxes. So if you earn $60,000 a year, you can use the BPA to reduce your overall tax liability. The basic personal amount was increased from $14,398 for the 2022 taxation year to $15,000 for the 2023 taxation year. It will be indexed for inflation in subsequent years going forward.
Of course you can’t talk about income tax brackets without thinking about registered retirement savings plans (RRSPs). The contribution limit increased from $29,210 in 2022 to $30,780 for tax year 2023. Having said that, your contribution limit is still capped at 18% of your earned income unless you have carry-forward room.
Keep in mind that you have 60 days after the end of the year to make your RRSP contribution for the previous year. That means that February 29, 2024 is the last day to make a RRSP contribution for the 2023 tax year. Any contributions after this date will need to be claimed on your 2024 return.
The annual contribution limit for your TFSA has also increased, from $6,000 in 2022 to $6,500 in 2023. The limit for 2024 has also been set at $7,000. The contribution deadline for a TFSA is technically December 31, but your contribution room gets rolled over each year. If you have never opened a TFSA, by the end of 2023, if you were at least 18 in 2009, you would have $88,000 in unused TFSA room. If you’re unsure about how much room you have, you can check with the Canada Revenue Agency. If you over-contribute to your plan, you’ll be charged a 1% monthly tax on any amount over the limit.
Launched on April 1, 2023, the tax-free First Home Savings Account combines a TFSA with an RRSP. It allows Canadians to make a contribution of $8,000 per year up to a maximum of $40,000 over their lifetime toward the purchase of a first home. Contributions are tax free upon withdrawal, like with the TFSA, and tax-deductible against income, like with RRSP contributions. All of the Big Six Banks now offer a FHSA, including RBC, BMO, CIBC, TD, National Bank and Scotiabank. Other financial institutions include: Desjardins, EQ Bank, Questrade and Wealthsimple.
If you opened a FHSA in 2023, you can claim up to $8,000 in FHSA contributions made by December 31 as a FHSA deduction.
Announced by the federal government in December 2023, the Canadian Dental Care Plan (CDCP) will cover most basic dentistry costs, such as cleaning, X-rays, filings, crown and dentures, root canals, dentures and extractions, for uninsured Canadians with a household income of less than $90,000. Applications for the CDCP will open in phases:
Seniors age 87 and above: December 2023
Seniors age 77 to 86: January 2024
Seniors age 72 to 76: February 2024
Seniors age 70 to 71: March 2024
Seniors age 65 to 69: May 2024
Adults with a valid Disability Tax Credit certificate: June 2024
Children under the age of 18: June 2024
All remaining eligible Canadian residents: Starting 2025
Applicants must have filed an income tax return for the previous year before applying for the CDCP.
Families making less than $90,000 per year without dental insurance with children under the age of 12 may already be eligible for the Canada Dental Benefit that offers a tax-free payment of $260, $390 or $650 per child (depending on family net income). Applications are open until June 20, 2024 and families can apply to the CRA for a maximum of two payments per child for dental care received between July 1, 2023 and June 30, 2024.
No. All COVID-19 benefits, such as the Canada Emergency Response Benefit (CERB), Canada Recovery Benefit (CRB) and Canada Worker Lockdown Benefit (CWLB) have expired. The CRA administered these temporary benefits between March 15, 2020 and May 7, 2022, and each had their own eligibility period.
Technically, it’s not a tax credit but a tax deduction that reduces your taxable income. During the pandemic, when approximately 5 million Canadians were forced to work from home, the federal government introduced a temporary flat rate method for claiming work from home expenses for the 2020, 2021 and 2022 tax years. However, starting with the 2023 tax year, employees must now use the detailed method and obtain a completed form T2200, reviewed and signed by their employer to claim home office expenses for 2023.
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