As tax season is upon us, we wanted to reach out to you with some important updates and reminders to ensure a smooth and efficient filing process for your 2023 tax returns. There are several changes this year that could impact your tax situation, and we want to make sure you're well-informed to maximize your returns.
Here are some key updates for this tax filing season:
Deduction for tools (tradespersons and apprentice mechanics)
Starting in 2023, the maximum employment deduction for tradespersons’ eligible tools has increased from $500 to $1,000. As a result, the threshold for expenses eligible for the apprentice mechanics tools deduction has also changed.
First Home Saving Account (FHSA)
The FHSA is a new registered plan to help qualified individuals to save to buy or build a qualifying home. Starting April 1, 2023, contributions to an FHSA are generally deductible and qualifying withdrawals made from an FHSA to buy or build a qualifying home are tax-free. Notices of assessment will also include a table similar to the RRSP table for the FHSA balances where applicable.
Multigenerational home renovation tax credit (MHRTC)
The MHRTC is a new refundable tax credit that allows an eligible individual to claim certain renovation costs to create a secondary unit within an eligible dwelling so that a qualifying individual (a senior or an adult who is eligible for the disability tax credit) can reside with their qualifying relation. If eligible, you can claim up to $50,000 in qualifying expenditures for each qualifying renovation completed, up to a maximum credit of $7,500 for each claim you are eligible to make.
Home office expenses for employees
The temporary flat rate method used to claim a deduction for home office expenses does not apply to 2023. Therefore, eligible employees looking to claim a deduction for home office expenses for 2023 will be required to use the detailed method and get a completed Form T2200, Declaration of Conditions of Employment, signed by their employer.
Residential Property Flipping Rule
Starting January 1, 2023, any gain from the disposition of a housing unit (including a rental property) located in Canada, or a right to acquire a housing unit located in Canada, that you owned or held for less than 365 consecutive days before its disposition is deemed to be business income and not a capital gain, unless the property was already considered inventory of the taxpayer or the disposition occurred due to, or in anticipation of, certain life events.
We encourage you to start gathering your tax documents and information promptly to avoid the rush closer to the April deadline. By submitting your documents early, you'll not only alleviate the stress of last-minute filing but also allow us ample time to review your information thoroughly and identify any potential opportunities for savings or optimizations.
Please don't hesitate to reach out to schedule your tax appointment or discuss any questions or concerns you may have regarding these updates or your individual tax situation. Our team is here to support you every step of the way and ensure you receive the maximum refund or minimize your tax liability.
Thank you for entrusting us with your tax needs. We look forward to assisting you and making this tax season as smooth and beneficial as possible.
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