How to Do Your Taxes & What’s New for 2023

It’s almost that time of year again. Tax season can be stressful and confusing, especially staying on top of the changes and updates that happen every year. If you are a T4 employee, a self-employed Canadian or a business owner, you may be wondering what information you need to do your 2023 taxes, as well as any changes that might impact your finances in the year ahead.  

So, here's everything you need to know to get your taxes done and what changes you can expect…

What You'll Need to Get Started

The following is what you’ll need to get your taxes done:

·      Your Social Insurance Number and other personal information

·      Any income T-slips (T4, T5, etc.)

·      Any records of additional income (freelance work, capital gains, foreign income, etc.)

·      Tax receipts for deductions (Charitable donations, childcare, medical expenses, etc.)

Ask us for our Income Tax Preparation Checklist and get a complete list of documents, credits, deductions, and other important information you will need to ensure you get the best return possible.

You can find most documents online through your CRA MyAccount or your employer's portal. If you are missing anything, you can request them from the issuer or contact the CRA for assistance.

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If you are a T4 employee, you may only need to report your employment income and deductions from your T4 slip, claim any eligible credits and benefits, and then pay whatever balance is owing or claim your refund.

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If you are self-employed or own a business, you may have more complex tax obligations than a regular employee. You may need to report your business income and expenses, calculate your GST/HST remittance or refund, claim deductions, and then pay installments throughout the year.

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No matter how you file your taxes, you should do it before the deadline to avoid penalties and interest. The deadline for most individuals is April 30th, but if you or your spouse or common-law partner are self-employed, you have until June 15th to file. That said, you would still have to pay any balance owing by April 30^th, so filing early is always best -- especially considering that the interest rate charged on late taxes, Canada Pension Plan contributions and EI premiums will rise from 9 to 10 per cent this year!

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What's New in 2024

The increased interest rate on late taxes isn’t the only change this year. There are some other important tax changes that all Canadians should be aware of in 2024.

Here are some of the highlights:

·      The federal carbon tax will increase to $80 per tonne from $65 per tonne on April 1st. This will affect the price of gas and other goods and services. However, you may be eligible for a carbon pricing rebate from the federal government's Climate Action Incentive payment.

·      The excise tax on beer, wine and spirits will increase by 4.7 per cent because of the alcohol escalator tax. This will add to the cost of alcoholic beverages.

·      The federal government will introduce a new three per cent digital services tax that aims to get tech giants such as Amazon, Uber, and Facebook to pay their fair share of taxes. This may affect the prices of some online services and products.

·      The federal government will eliminate some short-term rental deductions for those who are not compliant with local regulations or laws. This means that if you rent out your property on platforms like Airbnb or VRBO, you may not be able to claim any of those expenses.

·      The federal employment insurance rate and maximum annual insurable earnings will increase this year from 1.63 per cent for $61,500 in 2023 to 1.66 per cent for $63,200 in 2024 for employees. This means that employees must pay a maximum annual premium of $1,049.12. For employers, the rate will rise from 2.28 per cent in 2023 to 2.32 per cent this year, so they must now pay a maximum annual premium of $1,468.77.

·      The CRA will require that Canadians fill out aT3 return for the previous year naming the trustees, beneficiaries and settlors of each trust. This is to improve transparency and compliance in the taxation of trusts.

We understand that doing your taxes can sometimes be daunting and time-consuming. Let us free up your time and give you peace of mind that your taxes are being handled accurately and efficiently. Get started today with our Income Tax Preparation Checklist and then allow us to take care of the rest.