A new year has begun and the Canada Revenue Agency (CRA) announced that the due date for 2023 tax returns and payments is Tuesday, April 30, 2024. This early reminder should prompt all taxpayers to mark their calendars and observe the deadline.
Tax filing is an overwhelming activity, but the process can be problem-fee with planning and advanced preparation. CRA benefits are likewise plenty; every taxpayer should claim them, especially the essential ones.
Canada Child Benefit
Individuals with children less than 18 years old are eligible to claim the CCB. The first payment this year begins on January 19, 2024. If you’re eligible, expect to receive $619.75 per child monthly. This benefit ensures parents can raise their children with fewer financial constraints.
The application process and payment mode are online through Canada.ca. Prepare the birth certificate of your child/children and submit the document when you apply for the CCB.
Work-from-home tax relief
Taxpayers with work-from-home arrangements with their employers can claim the working-from-home tax credit. However, the flat rate method no longer applies for the year 2023. Instead, qualified individuals must use the detailed method. The amount you can deduct from your taxable income depends on the size of your at-home workspace.
Furthermore, you must complete Form T777S or T777 and get a completed and signed Form T2200S or Form T2200 from your employer. Also, keep records of your work-related expenses in case of a CRA audit.
Canada Workers Benefits
Canada Workers Benefits, or CWB, is specific to lower-income taxpayers. After filing their tax returns, people in this income bracket receive some additional income as financial support.
Offset tax payable
Taxpayers can offset their tax payables by holding income-producing assets like dividend stocks in their Tax-Free Savings Accounts (TFSAs). You don’t include all interest, income, and gains (or losses) in your TFSA in computing income for tax purposes. Also, TFSA contributions will not affect eligibility for income-tested benefits or benefits like CCB and OAS.
Generate tax-free income
Freehold Royalties Ltd. (TSX: FRU) in the energy sector is an ideal holding in a TFSA. The $2 billion company isn’t an oil and gas producer but pays generous dividends from a high-netback portfolio of mineral titles and royalties on oil and gas properties. At $13.77 per share, the dividend offer is a lucrative 7.84%.
The diverse portfolio across North America generates robust cash flows. Moreover, Freehold’s business is simple, with lower-risk attractive returns from quality assets. In the U.S., most royalty lands are in the most productive basins. The high inventory of high-impact drill spacing units assures business growth and upside for the mid-cap stock.
Rogers Sugar (TSX: RSI) in the consumer staples sector is another low-risk stock. Sugar is a low-growth business but enduring. At only $5.40 per share, you can partake in the 6.67% dividend. The $567.5 million company has consistently paid quarterly dividends, in bust or boom economic periods.
After a solid financial performance in 2023, management anticipates the favourable trend to continue in 2024. The sugar business, mainly, should deliver stable organic growth due to strong demand and pricing. Rogers Sugar’s production and logistic capacity expansion project will also commence soon.
More tax savings
The CCB and working-from-home tax credit are just two essential CRA benefits. You can realize more tax savings by knowing all the benefits you can claim before the tax filing deadline.
