Tax season is almost here — which means it’s time to understand the changes that affect your 2025 tax return. Every year, the Canada Revenue Agency (CRA) updates tax rules, brackets, credits, and filing processes. Some changes reduce your tax bill, others affect how you file – and knowing what’s new can help you keep more of your money and avoid penalties.
Here’s a simple breakdown of the most important updates.
1. A Tax Cut for Lower-Income Canadians
One of the biggest changes for 2025 is a reduction in the federal tax rate on the first income bracket.
● On July 1, 2025, the federal tax rate on the first $57,375 of income decreased from 15% to 14%.
● Because the change happened part-way through the year, the effective rate for 2025 is about 14.5% on that first bracket, meaning many taxpayers will owe a bit less tax when they file in 2026.
Why it matters: You may see lower tax withheld from your paycheques in the second half of 2025, and this could increase your refund or reduce what you owe when you file.
2. Paper Tax Packages Are Changing
If you usually file on paper, note two important changes:
● The CRA will not automatically mail you a full tax package for the 2025 tax year. You’ll need to download the forms online or request them if you prefer paper.
● Some low-usage federal and provincial schedules have been removed from the standard tax package.
Tip: Filing electronically ensures that you complete all the forms, plus lets you:
● Auto-fill your return using CRA-held info
● Get your refund faster with direct deposit
● Receive notices digitally in your CRA Account
More info: See CRA’s 2025 income tax package changes.
3. Brackets and Limits Adjusted for Inflation
For 2025, tax brackets and limits (like how much you can put into your RRSP) were increased to keep up with inflation. In simple terms, this gives you a bit more breathing room — you can earn slightly more before moving into a higher tax bracket, which helps as everyday costs continue to rise.
Tip: Check your RRSP contribution limit in your CRA account before making contributions that can reduce your taxable income.
4. Capital Gains Changes Still Deferred
You may have heard talk about changes to how capital gains are taxed. While an increase to the capital gains inclusion rate was discussed, it does not apply to the 2025 tax year.
Under the current rules, only 50% of your capital gain is taxable. That hasn’t changed for 2025, so if you sell investments or property this year, you’ll still report capital gains the same way as before.
5. Key 2025-Tax Deadlines to Remember
Here are some important dates you’ll need to know as you file your 2025 return:
● January–February 2026: CRA forms and NETFILE open for 2025 returns
● March 2, 2026: RRSP contribution deadline to claim on 2025 return
● April 30, 2026: Deadline to file your 2025 individual tax return
● June 15, 2026: Deadline for self-employed Canadians to file
Can’t meet the deadline? Get more info on what happens if you don’t file your taxes on time.
Tips to Prepare Now
Before you start filing:
● Gather all tax slips: T4s (employment), T5s (investment income), RRSP receipts, and donations receipts.
● Maximize tax-saving opportunities like RRSP and TFSA planning.
● Set up or update your CRA Account for easier filing and secure communications.
● Consider electronic filing to speed refunds and reduce errors.
Final Thoughts
The 2025 tax year brings meaningful changes, especially the federal tax rate cut and modernized filing practices. Staying informed now makes filing in 2026 less stressful and can help you take advantage of credits and deductions that reduce your tax bill.
See what tax credits you might be eligible for:
● Top overlooked tax credits for families and seniors in BC
● Small business tax credits you might be missing
If you need help or want personalized advice, contact us — we’re here to help you file with confidence!
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