There are crucial tax changes in tax season 2024. Three Canada Revenue Agency (CRA) benefits, which involve updating dependents, tracking expenses, and transforming savings into tax-free income will help lighten your tax burden.
1. Financial assistance for parents
A taxpayer can claim the Canada Child Benefit (CCB) if the child is under 18 years old, is a Canadian citizen or candidate for permanent residency, and has lived with the claimant for at least half a year. Individual parents will receive 50% of the CCB in case of shared custody.
For 2024, the CCB amount is $619.75 monthly for every qualified dependent under six and $522.91 per qualified dependent between ages 6 and 17.
2. Work-from-home employees
Taxpayers working from home, whether allowed or required, can still deduct home office expenses. The time of work rendered must be more than half the time for at least a month straight. However, you are required to use the detailed method only.
You can claim portions of rent, utilities, home internet access fees, and maintenance and minor repair costs. However, you can’t claim the following expenses: mortgage interest, principal mortgage payments, home internet connection fees, and capital expenses, including furniture and home decor.
3. Offset tax payables with savings
Tax-Free Savings Account (TFSA) users can use their savings to offset tax payables. You can invest the new $7,000 limit in 2024 or your available contribution room in dividend stocks. Maximize the limits yearly because all income in a TFSA is exempt from personal tax.
Indirect real estate ownership
TFSA users can be pseudo-property owners by investing in Nexus Industrial (TSX: NXR.UN). This $653.2 million pure-play industrial real estate investment trust (REIT) pays generous monthly dividends. If you invest today, the share price is $6.99, while the dividend yield is 9.06%. A $7,000 investment will generate $52.85 in monthly passive income or an annual tax-free income of $634.20.
Nexus delivered solid financial results in 2023. In the 12 months ending December 31, 2023, property revenues, net operating income (NOI), and net income increased 15%, 16.9%, and 32.4% year over year respectively to $157.7 million, $111.9 million, and $160 million. The industrial occupancy rate at year-end was 99%.
Essential products and services
Superior Plus (TSX: SPB) is ideal for risk-averse investors. The $2.3 billion company distributes propane, compressed natural gas, renewable energy and related products and services in North America. It is Canada’s largest propane distributor and fourth-largest in the United States.
The recently acquired Certarus will strengthen its position in mobile low-carbon energy solutions. In Q4 2023, net earnings increased 23% year over year to a record $77.5 million. At $9.40 per share, Superior Plus pays a lucrative 7.7% dividend.
“Our propane distribution business continues to generate strong cash flows that we intend to reinvest in our businesses to maximize returns for shareholders on a per share basis. We look to grow and improve further in 2024,” said Allan MacDonald, President and CEO of Superior Plus.
Avoid a big hit
April 30, 2024 is the tax filing deadline for 2023 tax returns. All taxpayers must file on time to avoid an unnecessary big hit. The interest rate on overdue income has increased from 9% to 10%.
