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Most Canadians rarely have reason to interact with the tax authorities, and for most people, that’s the way they like it. In the vast majority of cases, Canadians file their tax returns each spring, receive their refund or pay any balance of taxes owing, and forget about taxes until filing season rolls around the following year.


Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.


Our tax system is, for the most part, a mystery to individual Canadians. The rules surrounding income tax are complicated and it can seem that for each and every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances, and of which most Canadians are aware. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2023 must be remitted to the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2024. No exceptions and, absent extraordinary circumstances, no extensions.


No one likes paying taxes, but for taxpayers who live on a fixed income having to pay a a large tax bill can mean real financial hardship – and the majority of Canadians who live on fixed incomes are, of course, those who are over 65 and retired. Adding to their financial stress is the reality that such individuals have been coping, for the past two years, with inflationary increases in the cost of just about all goods and services, especially food and shelter.


For the past two years, Canadians have had to continually adjust their household budgets to accommodate price increases for nearly all goods and services. The impact of rising prices is felt most by those who are living on a fixed income and who, of necessity, spend a larger than average share of their income on non-discretionary expenditures like housing and food. And, while such individuals and families can be found in all age groups, retirees make up the largest Canadian demographic who live on such fixed incomes.


Most Canadians don’t turn their attention to their taxes until sometime around the end of March or the beginning of April, in time to complete the return for 2023 ahead of the April 30, 2024 filing deadline.


While owning one’s own home brings with it many intangible benefits, home ownership also provides some very significant financial advantages. Specifically, it provides the opportunity to accumulate wealth through increases in home equity, and to realize that wealth on a truly tax-free basis.


While our tax laws require Canadian residents to complete and file a T1 tax return form each spring, that return form is never exactly the same from year to year. Some of the changes found in each year’s T1 are the result of the indexing of many aspects of our tax system, as income brackets and tax credit amounts are increased to reflect the rate of inflation during the previous year. Other changes, however, arise from the introduction by the federal government of new deductions or credits, changes to the existing rules which govern the availability, amount, or delivery of such deductions or credits, and, inevitably, the end of some tax credit programs.


Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.


Each year, the Canada Revenue Agency publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. The final statistics for 2023 show that the vast majority of Canadian individual income tax returns – just over 92%, or just under 30 million returns – were filed by electronic means, using one or the other of the CRA’s web-based filing methods. About 2.5 million returns – or just under 8% – were paper-filed.


Income tax is a big-ticket item for most retired Canadians. Especially for those who are no longer paying a mortgage, the annual tax bill may be the single biggest expenditure they are required to make each year. Fortunately, the Canadian tax system provides a number of tax deductions and credits available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit), in order to help minimize that tax burden. And in most cases, the availability of those credits is flagged, either on the income tax form which must be completed each spring or on the accompanying income tax guide.


If there is one invariable “rule” of financial and retirement planning of which most Canadians are aware, it is the unquestioned wisdom of making regular contributions to one’s registered retirement savings plan (RRSP). And it is true that for several decades the RRSP was the only tax-sheltered savings and investment vehicle available to most individual Canadians.


Sometime during the month of February, millions of Canadians will receive some unexpected mail from the Canada Revenue Agency (CRA). That mail, entitled simply “Instalment Reminder”, will set out the amount of instalment payments of income tax to be paid by the recipient taxpayer by March 15 and June 15 of this year.


The Employment Insurance (EI) premium rate for 2024 is set at 1.66%.


Changes made to the Québec Pension Plan (QPP) beginning in the 2024 calendar year will create a two-tier contribution structure.


Changes made to the Canada Pension Plan (CPP) beginning in the 2024 calendar year will create a two-tier contribution structure.


Dollar amounts on which individual non-refundable federal tax credits for 2024 are based, and the actual tax credit claimable, will be as follows:


The indexing factor for federal tax credits and brackets for 2024 is 4.7%. The following federal tax rates and brackets will be in effect for individuals for the 2024 tax year.


Each new tax year brings with it a schedule of tax payment and filing deadlines, as well as some changes with respect to tax saving and planning opportunities. Some of the more significant dates and changes for individual taxpayers for 2024 are listed below.


While most taxpayers pay their annual income tax bill in full and by the tax payment deadline of April 30, there are many circumstances that could result in an individual’s being unable to meet their tax payment obligations in full or on time. Individuals who earn income from employment pay their taxes through deductions from their paycheques, but can still be faced with a tax balance owing when the annual return is filed. Newly retired Canadians who are receiving income from a variety of sources may not realize that sufficient tax is not being withheld from all of those sources to cover the tax bill for the year. And, in a time when many Canadians and their families are living paycheque to paycheque, most taxpayers are unlikely to have additional funds readily available to pay a large, unexpected tax bill.


While almost everyone looks forward to retirement and an end to the day-to-day demands of working life, there’s also no question but that the decision to give up a regular paycheque is a stressful one. Particularly when the cost of life’s necessities – groceries, rent, mortgage interest payments – seems to be continually increasing, individuals wanting to retire have to wonder whether they can actually afford to do so, or whether it would be foolhardy, in the current economic realities, to walk away from a reliable, regular paycheque.


During the month of December, it’s customary for employers to provide something “extra” for their employees, whether it’s a compensation bonus, a gift, or an employer-sponsored social event – or all three. And, given the current labour shortages in many sectors, employers may be particularly motivated this year to provide such extras in order to retain current employees, or attract new ones. What employers definitely aren’t trying to do is create a tax headache or liability for their employees: unfortunately, it’s also the case that a failure to properly structure employee gifts or even employee social events can result in unintended and unwelcome tax consequences to those employees.


Everyone in Canada who earns a salary or wages is familiar with the deduction taken from each paycheque for contributions to the Canada Pension Plan (CPP). The CPP is one of the two major government-sponsored retirement income programs in Canada – the other being the Old Age Security program.


Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.


When the pandemic struck in March of 2020 and public health lockdowns were imposed, virtually all Canadian employees were required to work from home, most for the first time.


The day-to-day financial impact of increases in interest rates over the past 18 months, together with higher costs for nearly all goods and services, means that for most Canadians maximizing take-home income isn’t just desirable, it’s a necessity. And the best way to make sure that take-home pay is maximized is to ensure that deductions taken from that paycheque – especially deductions for income tax – are no greater than required.


Canadians have a well-deserved reputation for supporting charitable causes, through donations of both money and goods. Our tax system supports that generosity by providing a tax credit for qualifying donations made and, in all cases, in order to claim a credit for a donation in a particular tax year, that donation must be made by the end of that calendar year.


The 10-fold increase in interest rates since March of 2022 has affected Canadians in almost every area of their financial lives, as individuals and families struggle to cope with the every-increasing bite that interest costs take out of their budgets.


While our health care system is currently struggling with a number of significant problems, Canadians are nonetheless fortunate to have a publicly funded health care system, in which most major medical expenses are covered by government health care plans. Notwithstanding, there is a large (and growing) number of medical and para-medical costs – including dental care, prescription drugs, physiotherapy, ambulance trips, and many others – which must be paid for on an out-of-pocket basis by the individual. In some cases, such costs are covered by private insurance, usually provided by an employer, but not everyone benefits from private health care coverage. Self-employed individuals, those working on contract, or those whose income comes from several part-time jobs do not usually have access to such private insurance coverage. Fortunately for those individuals, our tax system acts to help cushion the blow by providing a medical expense tax credit to help offset out-of-pocket medical and para-medical costs which must be incurred.


One or two generations ago, retirement was an event. Typically, an individual would leave the work force completely at age 65 and begin collecting Canada Pension Plan (CPP) and Old Age Security (OAS) benefits along with, in many cases, a pension from an employer-sponsored registered pension plan.