Thursday, February 22, 2024

Methods to increase your possibilities of getting a much bigger tax refund subsequent yr

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 knowledgeable.

“12 months-end is basically the important time to do your tax planning,” Jamie Golombek, managing director of tax and property planning at CIBC Personal Wealth and a Monetary Publish columnist, mentioned in a latest interview with FP’s Larysa Harapyn. “There are very particular issues that you’ll want 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 start out, however maybe not for these trying to offset capital positive factors 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 contemplate recalculating their foreign-exchange losses as a result of a loss on paper could be a achieve when transformed to Canadian {dollars}.

“Tax-loss promoting will really backfire on you, so consider the overseas trade when doing these achieve and loss calculations,” he mentioned.

First-time homebuyers can even take benefit by opening a first dwelling 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 mentioned the good thing about opening an account in 2023, even in case you solely contribute $100, is you could carry ahead the unused room (an extra $7,900 on this case) and contribute extra the next yr.

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

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Golombek additionally suggested householders to look at the brand new credit obtainable for 2023, such because the multi-generational dwelling 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 revenue earners ($173,000 and above) concerning new different minimal tax (AMT) laws.

“Beginning Jan. 1, 2024, AMT might have a way more vital affect for sure taxpayers,” he mentioned.

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To date, capital positive factors 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 mentioned, together with realizing a major achieve, promoting a property or making giant charitable donations earlier than year-end.

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