Let’s start with what’s not happening for 2024 tax filing.
The highly publicized capital gains inclusion rate increase from 50 per cent to 67 per cent that was to be effective June 25/24, has been delayed to January 1, 2026 … that’s correct, 2026, not 2025.
The plan is to have the first $250,000 of capital gains and losses retain the 50 per cent inclusion rate for individuals, proprietors, and personal trusts, and then increase to 67 per cent if the capital gains or losses surpass $250,000.
However, corporations and regular trusts will have the 67 per cent inclusion rate apply for all its capital gains and losses.
But this is now a 2026 tax issue … maybe!
No need to file T3 Bare Trusts.
Just as they were cancelled for 2023, they have been cancelled for 2024.
That being said, if you have been filing one in the past, it is wise to check to see if you have to file for 2024.
What’s new for 2024 tax reporting?
Here’s some exciting news, and no surprise given our electronic world.
You can now set up digital recognition log in with Canada Revenue Agency (CRA).
It’s real time access to CRA by electronically sending CRA your picture.
Crazy? … but true.
Back to Earth.
The volunteer firefighter and search and rescue tax credit has been doubled from $3,000 to $6,000 for those who give at least 200 hours of their time.
The expenses for operating short term accommodation will be denied for non-compliant short term rental units in specified areas of B.C., notably in our area its Nelson and Shoreacres/Bonnington Falls.
The withdrawal amount from the Home Buyers Plan with no tax consequence has been increased to $60,000 from $35,000.
For those situations when travel expenses can be claimed for 2024, the mileage reimbursement rate for 2024 is $0.72.
The flat meal rate remains at $23/meal.
For employer reimbursement of 2024 travel expenses, the rate was $0.70/km for the first 5,000 km, then dropped to $0.64/km.
Now for 2025, those rates are $0.72 and $0.66
The CND-USA 2024 annualized exchange rate is 1.3698.
The annualized rate is used when related multiple foreign currency conversions are spread throughout the year.
In the case of one-off transactions, the exchange rate for that particular month should be used.
And what about this one, there’s a new box on the T4A slip this year, Box 15 for the reporting of dental coverage.
This follows last year’s addition of Box 45 on the T4 slip for the same purpose.
Now to the proposed changes not yet approved by the government but have been implemented by CRA for 2024 tax reporting.
The disability supports deduction has had the list of allowable expenses expanded.
The Alternative Minimum Tax (AMT) rules have been redefined offering some good news, and some bad.
Check them out if you know the AMT will apply to you for 2024.
There is an increase in the Lifetime Capital Gains Exemption (LCGE) for small business corporations.
Good news for Canada’s entrepreneurs.
Here are some reminders and updates on tax changes brought into effect in the past two years.
The BC Renters Tax Credit is a $400 refundable tax credit for a household income under $60,000, reducing to a zero credit at $80,000.
The renting of a unit in 2024 must have a formal rental agreement and include a minimum of six months of renting, and those six months can be 30 day periods.
There is only one $400 claim for spouses whether they live in one rental together or two separate rentals.
However, unrelated roommates living in one common rental can each make a $400 claim.
There is a broad definition of rental unit, including long term care facilities and student housing.
Excluded are rentals owned by a family member, free employer provided rentals, rent to own agreements, and rentals in mobile and trailer parks.
If a First Home Savings Account (FHSA) is set up and a contribution made prior to December 31, a T4FHSA slip will be issued to claim a tax deduction, just like an RRSP contribution.
If funds were withdrawn from an FHSA in 2024, a tax slip is also issued but as long as a home was purchased with the withdrawn funds, there is no tax consequence.
The Multi-Generational Home Renovation Credit is a refundable tax credit of 15 per cent of up to $50,000 of renovation expenses.
This is designed to transition a family member into their own unit within a home owned by another family member.
The federal government’s Property Flipping Rule, otherwise known as the “365 day rule” or the “anti-house flipping rule” denies the principal residence capital gains exemption if a house is bought and sold within 365 days.
Instead, the full profit from the sale is included as taxable income.
However, there is a list of defined exceptions to the flipping rule such as change in marital status, employment change, health issues for self or immediate family member, plus a few others.
Reminder that the Underused Housing Tax Form UHT-2900 must be filed for the reporting of rental units owned by those who are not Canadian or do not have Permanent Resident status.
Finally, a reminder that the day of week changes each year that you have to file your tax return and pay any tax owing.
April 30 is on a Wednesday this year.
Ron Clarke has his MBA and is a business owner in Trail, providing accounting and tax services. Email him at ron.clarke@JBSbiz.ca. To read previous columns visit www.JBSbiz.net.
