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Important changes to 2023 income tax returns in BC

The time to plan and prepare for the filing of your 2023 Personal Income Tax Return(s) is upon us, and a lot of the proposed items from last year have become reality, resulting in LOTS of changes for 2023 to consider.  It is very important to read the information below and reach out to a tax accountant for clarification if necessary. I am not a tax preparer, accountant or financial advisor. I do have a list of trusted professionals in the lower mainland where you can find the accountants that I use.

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If applicable and important to you, Feb 29th 2024 is the RRSP Deadline for contributing to an RRSP for the 2023 tax year.  Also, the RRSP deadline will be December 31 for the year in which you turn 71.

Contributions made to a First Home Saving Account (FHSA) are tax deductible and available to be claimed in 2023 if the contributions are made prior to January 1st, 2024; unused room can be carried forward;

The $2.00 per day working from home credit is no longer available for 2023; full details and a signed T2200 Declaration of Conditions of Employment, plus the 50% of work from home over 4 weeks requirement, are now needed to make this claim.  Other restrictions and details do exist.

Residential flipping rules are now in place for short term held residential properties; properties held for less than a year are deemed business gains instead of capital gains; certain exemptions may be available.

Multigenerational home renovation tax credit may be available (refundable up to 15%) for up to $50,000 of qualifying renovations to construct a secondary suite for a qualifying eligible relation.  Many restrictions and details exist.

A New BC Provincial Renter’s Credit for your 2023 income tax return is potentially available to individual/families with net income < $60,000.

Underutilized Housing Tax (UHT) has had a number of changes implemented for 2023 to make filing less of a requirement, However, if you were required to file 2022 based on those rules; those rules still apply and you are still required to file that 2022 return by April 30th, 2024.  Significant penalties are possible.

NEW Trust Reporting: If your Name is on Title of another person’s Property or Bank Account or Vice-versa (holding for/with the next generation or non-spouse), then based on current law the CRA will consider this a Bare Trust arrangement, and a T3 Trust Information Return will be due April 2nd, 2024.  Basic personal information, details of the property held jointly, and the date the trust relationship began, should be all that is needed; please view the document attached for examples of Bare Trusts and contact us as soon as possible if these apply to you.  Large penalties are possible for late & non-filing.

There are also many possible income tax changes coming for 2024 income tax returns including to those landlords renting residential property on short-term basis (and using VRBO and other platforms); all expenses will be denied if operators are not compliant with provincial and/or municipal licensing and permitting, plus many other rule changes to 2024 Amortization/Depreciation rates and incentives for people in business and investing in capital equipment (such as electric vehicles and manufacturing equipment).  There are also increasing interest rates being charged by CRA which can impact late filing amounts and penalties for under-remitting, plus T-Slip changes for dental insurance coverage.  Finally, there are many proposed changes for 2024 regarding Alternative Minimum Tax (AMT) and the need for electronic payments.  Most of this is not applicable to the general population, and there is excellent information available at the CRA website. 

To Summarize:  Trust Returns are due Tuesday, April 2nd (since March 31st is on the weekend and Apr 1st is Easter Monday), and generally Personal Income Tax Returns are due Tuesday April 30th, unless you or your spouse are reporting self-employment income.