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NEW – Bare trusts are exempt from trust reporting requirements for 2023
NEW – Bare trusts are exempt from trust reporting requirements for 2023
To support ongoing efforts to ensure the effectiveness and integrity of Canada’s tax system, the Government of Canada introduced new reporting requirements for trusts.
In recognition that the new reporting requirements for bare trusts have had an unintended impact on Canadians, the Canada Revenue Agency (CRA) will not require bare trusts to file a T3 Income Tax and Information Return (T3 return), including Schedule 15 (Beneficial Ownership Information of a Trust), for the 2023 tax year, unless the CRA makes a direct request for these filings.
Over the coming months, the CRA will work with the Department of Finance to further clarify its guidance on this filing requirement. The CRA will communicate with Canadians as further information becomes available.
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My home was my principal residence for some of the years I owned it, Will I pay taxes on total capital gain?
If your home was your principal residence for only some of years that you owned it, you’ll need to report the part of the capital gain from the sale of the property for the years it wasn’t your principal residence. To do this, you’ll need to download and complete the following forms from the CRA’s website:
T2091(IND): Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust)
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EFILE news and program updates:
T1 EFILE
The EFILE and ReFILE services are open for transmission from February 20, 2023, at 8:30 a.m. (Eastern time), until January 26, 2024. You can electronically file your clients’ 2017, 2018, 2019, 2020, 2021, and 2022 initial personal income tax and benefit returns using the EFILE service and you can file your clients amended T1 returns for 2019, 2020, 2021, and 2022 using ReFILE.
T3 EFILE
The T3 EFILE service is open for transmission from February 20, 2023, at 8:30 a.m. (Eastern Time), until January 19, 2024. You can electronically file your clients’ 2021, 2022, and 2023 initial T3 trust returns such as T3RET, T3ATH-IND, T3M, T3S, and T3-RCA using T3 EFILE.
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A First Home Savings Account (FHSA) is a designated plan that enables prospective first-time homebuyers to accumulate funds for their initial home purchase without incurring taxes, within specified limits.
If you initiated an FHSA in the year 2023, you have the opportunity to declare a deduction on your 2023 income tax and benefit return for FHSA contributions made by December 31, 2023, capped at a maximum of $8,000. This deduction offers a tax-free advantage, supporting your efforts to save for your first home.
“FHSA 2023: Unlock Tax-Free Savings for Your First Home!”
Frequently, I encounter the question of whether I should file a tax return even when I have no income or tax owing. This dilemma is particularly common in various scenarios, such as when children are growing up and receive their first paycheck, albeit below the taxable limit. This uncertainty is also prevalent among new immigrants with minimal or no income in their first year, university students, and individuals emigrating from Canada. While filing a tax return is optional in certain situations, there are mandatory cases that should not be overlooked. The Canada Revenue Agency (CRA) website provides a useful resource to determine whether you need to file a tax return Do you have to file a return?
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Here are some key situations where filing a tax return is mandatory:.
Liability: If you owe taxes, regardless of the circumstances.
CRA Request: If the CRA has specifically requested you to file a return.
Income Splitting: If you and your spouse or common-law partner elected to split pension income.
Capital Property Disposal: If you disposed of capital property, including the sale of a Principal Residence from tax years 2016 and onwards.
Repayment of Benefits: If you need to repay old age security or employment insurance benefits.
RRSP Withdrawals: If you haven’t repaid all amounts withdrawn from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan or the Lifelong Learning Plan.
CPP Contributions: If you have to contribute to the Canada Pension Plan (CPP) due to self-employment earnings…
Moreover, there are various credits and benefits that may only be accessible if a tax return is filed. Some recommended scenarios include.
Refundable Credits: Even individuals with low income, such as students, may want to file a tax return to claim a refund of CPP, EI, and Income Tax.
Specific Benefits Application: Certain benefits, like the Working Income Tax Benefit and GST Credits, are available only by applying. Additionally, eligibility for Child Tax Benefits may require a tax return.
Tuition Credits: Students are advised to file a tax return to claim Tuition Credits.
Seniors’ Benefits: To continue claiming the Guaranteed Income Supplement, seniors should file their tax returns.
We can assist you in analyzing your situation, recommend necessary filings and compliance, and ensure you benefit from the deductions, credits, and refunds applicable to your tax filings.
Contact us for more details