Tax Tax Tax
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Tax reflections and planning and implementation are always evolving and some of the basics stay pretty well the same.
It has been suggested by my friend Mark that I start a Tik Tok channel on T A X. , he sugested lots of XXX in the titles apparently that gets more viewers attentions. Will see, we don't want our eyes poked out.
In the meantime, let's start with this list
https://www.advisor.ca/tax/tax-news/essential-tax-numbers-updated-for-2024/
Hot Hot Hot off the internet advisors site.
Will add some more content and commentary going forward.
Tim's Tax Tips
PS, maybe we should add some Traps , lots of T's
T T T & T
Comments
1. Home buyers’ plan
How much? The tax-free withdrawal limit from an RRSP account is $60,000 under the federal government’s home buyers’ plan (HBP).
so if there is a couple, 60,000 * 2 = 120,000 possible, just remember the 90 days rule
- the great thing about this is it allows you to withdrawal a substantial amount of money from your rsp savings, it has to be paid back or be taxed over a 15 yr period of time.
- you can make a contribution and pickup a tax deduction which can save you lots of money on taxes today. Just beaware of the 90 day rules.
example, lets say you have saved 60,000 in your tfsa for the house, move that money over to a rsp ( invest in a money market fund) before end of February, get a tax deduction. It can be used in 2024 or some can be carryforward to 2025 if it is benefical. I ran the numbers for our family, that would have saved me 20,228 on my taxes for 2024, plus increased our other benefits by 3158. Everyone's situation will be different, but overall that example saves 23,386/60,000 = 38.98% return on a down payment that would have been missed , that is good math , good planning, tax smart.
2. FHSA
How much? FHSA account holders can contribute, or transfer from their RRSPs, up to $8,000 per year with a lifetime limit of $40,000. Contributions are tax deductible and growth is tax-free. So if you started in 2023, you would have 16000 + 8000 for 2025 = 24,000 , for couple that is 48,000 possible for that DP
3. Home buyers’ amount
How much? Home buyers can claim $10,000 on their tax return during the year they purchase their home for a maximum tax credit of $1,500.
- Only one person can claim if a couple is buying a home
4. Home accessibility tax credit
How much? Claim up to $20,000 in qualifying home renovation expenses for a tax credit of up to $3,000.
Who’s eligible? Canadian residents aged 65 or older, or those eligible for the DTC.
- this is similar tax rate as the home purchase credit, just a higher base level being 20,000 vs 10,000 , this could be an annual claim to match perhaps your budget
5. Multigenerational home renovation tax credit
How much? Claim 15% of qualifying renovation expenses to receive a maximum $7,500 tax credit.
Who’s eligible? This credit is available if the renovation costs create a secondary unit in the property, the renovation was completed in the tax year claimed regardless of when it began, and one of the individuals living on the property is 65 or older, or qualifies for the DTC and is a Canadian resident.
- this is a big one, many families should consider this, "granny suite"
- so 7500 / 15% = 50,000 renovation/building expense , one time claim
6. GST/HST new housing rebate
How much? New home buyers can claim a rebate for some of the GST/HST paid for qualifying residence purchases and expenditures.
- lots of paperwork, needs to be organized and prepared for audit
- there is two components federal and provinical , if your house is over 450,000 only provinical tax recovery will apply
7. Principal residence exemption
How much? A capital gains exemption on the value of a primary residence sold.
Who’s eligible? Canadian residents who sold their primary residence and realized a capital gain.
- special rules, you have to own that house for at least a year or the gain may be considered income and fall under the income flipping provisions, so be cautious and check the rules if you are not there for at least a yr
https://www.investmentexecutive.com/news/industry-news/7-housing-re...
https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-lev...
"When is the best time to tax-loss harvest? The answer is easy: all year long! Markets are volatile. They are also unpredictable. For an activity such as tax-loss harvesting, it’s best to be ready at all times to take advantage of when the market moves and create that valuable tax asset.
https://advisoranalyst.com/2024/01/15/what-is-tax-loss-harvesting-i...
https://advisoranalyst.com/2024/01/15/what-is-tax-loss-harvesting-i...
https://canadianfamilyoffices.com/life-family/considering-giving-a-...
Tip, back track the post, so you know where you put it
https://www.linkedin.com/posts/omegastewardship_tax-2024-prior-acti...
Don't get caught with your tail between your legs, checkout the tax list for 2024
https://www.advisor.ca/tax/tax-news/essential-tax-numbers-updated-f...