Now’s a important time to plan your taxes
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Canadians typically affiliate tax season with submitting returns in March or April, however now’s a important time to plan your taxes, says one professional.
“12 months-end is admittedly the important time to do your tax planning,” Jamie Golombek, managing director of tax and property planning at CIBC Non-public Wealth and a Monetary Submit columnist, mentioned in a latest interview with FP’s Larysa Harapyn. “There are very particular issues that it’s essential to do earlier than the top of the 12 months to reap these advantages come subsequent submitting season.”
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Tax-loss promoting is one place to start out, however maybe not for these seeking to offset capital good points in overseas forex investments.
Golombek mentioned traders who bought U.S. shares 10 or 11 years in the past, when the U.S. greenback was on par with the Canadian greenback, ought to take into account recalculating their foreign-exchange losses as a result of a loss on paper may be a achieve when transformed to Canadian {dollars}.
“Tax-loss promoting will really backfire on you, so have in mind the overseas alternate when doing these achieve and loss calculations,” he mentioned.
First-time homebuyers may take benefit by opening a first house financial savings account (FHSA) earlier than the top of the 12 months. The account permits first-time homebuyers to contribute as much as $8,000 per 12 months and obtain a tax deduction for his or her contributions.
Golombek mentioned the advantage of opening an account in 2023, even in case you solely contribute $100, is which you can carry ahead the unused room (a further $7,900 on this case) and contribute extra the next 12 months.
“There’s no threat … so individuals ought to get on that in the event that they’re a first-time homebuyer,” he mentioned.
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Golombek additionally suggested owners to look at the brand new credit accessible for 2023, such because the multi-generational house renovation tax credit score. For instance, Canadians who’ve renovated to create a secondary dwelling for a senior (65 or older) or an individual with a incapacity can get a 15 per cent federal credit score on as much as $50,000 in bills.
He additionally supplied some recommendation for the highest one per cent of earnings earners ($173,000 and above) concerning new various minimal tax (AMT) laws.
“Beginning Jan. 1, 2024, AMT may have a way more important affect for sure taxpayers,” he mentioned.
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To date, capital good points have been 15 per cent taxable, however within the new 12 months, they are going to be 100 per cent taxable. Nonetheless, there are methods to keep away from the AMT, Golombek mentioned, together with realizing a major achieve, promoting a property or making giant charitable donations earlier than year-end.
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