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Friday, February 16, 2024

The way to increase your probabilities of getting a much bigger tax refund subsequent yr

Now’s a crucial time to plan your taxes

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Canadians usually affiliate tax season with submitting returns in March or April, however now could be a crucial time to plan your taxes, says one skilled.

“Yr-end is admittedly the crucial time to do your tax planning,” Jamie Golombek, managing director of tax and property planning at CIBC Personal Wealth and a Monetary Submit columnist, stated in a current interview with FP’s Larysa Harapyn. “There are very particular issues that it’s worthwhile to do earlier than the top of the yr to reap these advantages come subsequent submitting season.”

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Tax-loss promoting is one place to begin, however maybe not for these seeking to offset capital features in overseas foreign money investments.

Golombek stated 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 could be a acquire when transformed to Canadian {dollars}.

“Tax-loss promoting will truly backfire on you, so consider the overseas trade when doing these acquire and loss calculations,” he stated.

First-time homebuyers also can take benefit by opening a first house financial savings account (FHSA) earlier than the top of the yr. The account permits first-time homebuyers to contribute as much as $8,000 per yr and obtain a tax deduction for his or her contributions.

Golombek stated the advantage of opening an account in 2023, even if you happen to solely contribute $100, is you could carry ahead the unused room (a further $7,900 on this case) and contribute extra the next yr.

“There’s no danger … so individuals ought to get on that in the event that they’re a first-time homebuyer,” he stated.

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Golombek additionally suggested owners to look at the brand new credit out there 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) relating to new different minimal tax (AMT) laws.

“Beginning Jan. 1, 2024, AMT might have a way more important influence for sure taxpayers,” he stated.

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To date, capital features have been 15 per cent taxable, however within the new yr, they are going to be 100 per cent taxable. Nonetheless, there are methods to keep away from the AMT, Golombek stated, together with realizing a major acquire, promoting a property or making giant charitable donations earlier than year-end.

• E-mail: novid@postmedia.com

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