Canadian taxpayers hope to pay less in taxes or realize significant tax savings this coming tax season. But before naming the tax breaks you can’t afford to miss, the Canada Revenue Agency (CRA) reminds individual taxpayers that April 30, 2024 is the tax filing deadline for the 2023 tax return.
For self-employed taxpayers, the deadline for submission of income tax returns is on or before June 17, 2024. But for all that owe taxes, make payments by April 30. Also, the CRA will open its NETFILE service beginning on February 19, 2024, for those wishing to submit their tax returns electronically.
Claim home office expenses
Taxpayers who worked from home in 2023 can claim home office expenses. However, the temporary flat rate method no longer applies. Eligible employees must use the detailed method only to claim a deduction for home office expenses. The CRA will release updated forms (T2200 and other T1 forms) by the end of January.
Get relief on moving expenses
Relocating to a new office or job assignment entails expenses, especially if the location is far. You can deduct related moving costs in your tax return if you moved more than 40 kilometres from your previous residence.
Use the grocery rebate
Rising food costs drain the pockets of most Canadians, so the federal government introduced the Grocery Rebate. The one-time payment or power-up helps lower-income Canadians cope with rising grocery bills. However, only those who filed a tax return for the 2021 tax year and qualified for the GST/HST credit can receive this rebate.
The rebate amount depends on relationship status and number of children. It ranges from $234 to $306 for single and married individuals or with a common-law partner without children, and up to $628 for single and married individuals or with a common-law partner with four children.
What to do with your tax breaks
Taxpayers can use the tax savings or tax breaks to level up their finances. Investing in income-producing assets like real-estate investment trusts (REITs) is an option. Dream Industrial (TSX:DIR.UN) trades at $13.82 per share on the TSX and pays an attractive 5.06% dividend.
Assuming your tax savings is $7,000 or equivalent to the new Tax-Free Savings Account (TFSA) limit for 2024, your money will generate $354.20 per year ($29.52 monthly). Moreover, your investment income in the real estate stock is tax-free if held in a TFSA.
The $4 billion REIT enjoys strong leasing momentum because it owns and operates in-demand industrial properties. In Q3 2023, net rental income rose 17.4% to $84.5 million versus Q3 2022, while the occupancy rate was 97.2%. Management believes the embedded growth opportunities within the portfolio and development pipeline enhance Dream Industrial’s value-creation potential.
Higher late filing penalty
Beginning in 2024, taxpayers who do not submit their tax returns on time or the due date will pay a higher late filing penalty. The penalty is 10% of unpaid taxes and incurs interest if unpaid. Also, the CRA will increase the penalty for repeat late filers.
The advice for taxpayers is to prepare early and start right. It will help to know all the available tax breaks, credits, and benefits and take advantage of them to reduce tax liabilities.