LET’S GET THIS STARTED!
- by Andrew Hawryluk
- January 30, 2023
As we look back on 2022 and say good riddance, we are all well aware that our 2022 obligations are not behind us as of yet…. Yes…the dreaded tax season is upon us.
As with most years we will soon begin to receive slips in the mail from the various companies and agencies you deal with which will include tax slips for the 2022 Calendar year. Most of put this off until the deadline rush of April 30th. Have no fear this year as April 30th falls on a Sunday, so al long as your tax return is post marked May 1st 2023 it will still be considered on time – Phew! The deadline for self-employed Individuals remains June 15 2023.
Some of the typical reminders to watch out for are your 2022 RSP Contributions as well as any of the contributions you make during the first 60 days of 2023 (Jan 1 – Mar 1 2023). If you still need to make Home Buyers Plan contributions, please make sure to get those completed within the same timeframe. The maximum RSP Contribution Limit for 2022 is 18% of your earned income or $29,210. For the 2023 tax year the RSP Limit will increase to: $30,780.
If you sold any securities during 2022 to trigger losses – just a reminder that you can carry these losses forward indefinitely or carryback to the previous 3 years of filings (2019, 2020, 2021) which for many may have been big years of gains. Make sure to remind your accountant if you wish to carry back any losses for previous years. This can have big benefits and nice unexpected refunds to take out the sting of the market realities of 2022.
Staycation Tax Credit 2022
Did you stay close to home in 2022, but still took a staycation? If so, dig out those receipts for local travel and claim on your taxes for 2022. Ontario Staycation Tax Credit
Work from home 2022?
Did you work more than 50% of the time from home for a period of at least four consecutive weeks during 2022. This measure which was put in place as a Pandemic Response is still eligible. You may be able to claim a deduction of $500 for home office expenses in the 2022 year.
Home Accessibility Tax Credit (HATC)
If you are 65 or older and are eligible for the Disability Tax Credit and have re-modeled your home for safer access, you can claim up to $20,000 of your related expenses. See the link here: HATC
TFSA Annual Limit Increase
The TFSA Annual Limit has increased to $6,500 as of January 1 2023 – maxing out your TFSA just makes sense. If you have un-used contributions from previous years, consider topping off for 2023 and max out from prior years room as well. TFSAs are terrific probate avoiding, gains tax-free long term savings vehicles, and also with interest rates back up to decent levels, the option to use high interest savings structures is also extremely attractive for shorter term projects, such as saving for a house, a car or other near term needs.
The OAS Clawback Limit has also increased for the 2023 Income year to: $86,912 while 100% OAS clawback will occur above $141,917 for this year. This means you might have planning opportunities we can help with on the accumulation side of things – if you are younger, are you saving to the right “tax buckets” to preserve your old age benefits? And if you are already drawing on your investments, we can help you optimize wherever possible, to preserve this additional income benefit from the Canadian government.
OPPORTUNITIES for 2023
First Home Savings Account (FHSA) This is a new program effective January 1 2023 – the First home Savings Account – this gives prospective first time home buyers the ability to save $40,000 on a tax free basis. Just like an RSP, the FHSA contributions are tax deductible. Withdrawals are non-taxable just like a TFSA (Tax Free Savings Account). The full year limit for 2023 is $8,000. Please contact us with any questions or if you believe someone you know could benefit from this type of strategy for a first home purchase. A quick video to the FHSA Account is included on the B-side of this month’s Surroundup!
Once you have filed your tax return, pleas send us copies of your notices of Assessments. These measures can add tremendous opportunity from a planning perspective.
As always, if you have any questions about these tax issues, or anything else, please reach out to us. We would be happy to review and determine where any of these items may help you and your family from a tax and planning perspective!
Small details are a huge deal, and when it comes to tax time, they can add up in significant ways to save you money. We are always here to help with your questions!
By Andrew Hawryluk
Assante Financial Management Ltd.
B Side: First Home Savings Accounts – check out the short video on the NEW FHSA Accounts!