2023 Tax Return Checklist: 14 Changes Canadians Need To Know
When preparing your 2023 T1 tax return in Canada, here's a comprehensive checklist of the key tax changes and updates you need to be aware of:
Increase in the Basic Personal Amount (BPA): The BPA has been raised to $15,000, offering a slight boost to tax returns.
Introduction of the Grocery Rebate: A new rebate equivalent to double the GST/HST credit amount received in January 2023 for those eligible.
Simplification of the Disability Tax Credit Application: The process has gone digital, streamlining applications through My CRA Account.
Tax Bracket Adjustments for Inflation: Federal tax brackets have been adjusted to reflect inflation, potentially shifting some Canadians to a lower tax bracket.
Increased Limits for TFSA and RRSP: The TFSA contribution limit is now $7,000, and the RRSP limit is $30,780, influenced by 18% of the previous year's earned income.
New Old Age Security (OAS) Limits: Income thresholds for OAS repayment have been adjusted, with specific increases for seniors aged 75 and over.
Canada Pension Plan (CPP) Contributions: Maximum contributions have increased by 6.5%, with the introduction of a new earnings ceiling for additional CPP contributions.
Multigenerational Home Renovation Tax Credit: A new refundable tax credit is available for renovations that create a secondary unit for a senior or a person with a disability, with a credit value of 15% up to $7,500 based on qualifying expenses.
Adjustments to Unpaid Tax Penalty Rates: Starting in 2024, penalties for unpaid taxes increase to 10% plus 2% for each full month the return is late, up to 20 months, with compounding interest.
Expiry of COVID-19 Benefits: The $500 work-from-home expense claim, Canada Worker Lockdown Benefit, and Ontario Staycation Tax Credit are no longer applicable.
Claiming Teleworking Expenses: The flat rate method for claiming teleworking expenses has been removed. You must now use the detailed method and have a Form T2200 completed by your employer.
Early Sale of Residential Property: Profits from selling a residential property owned for less than 365 consecutive days before sale are now considered business income, which means you can deduct related expenses but cannot claim a non-capital loss.
Exceptions for Deeming Profit as Business Income: Specific life events such as death, household additions, separation, personal safety concerns, disability, illness, employment changes, insolvency, or involuntary disposition, do not apply to the new rule on early sale of residential properties.
Introduction of T4FHSA Slip: If you've engaged in any transactions involving a First Home Savings Account (FHSA) such as opening an account, making contributions, transferring funds from an RRSP to an FHSA, or making designated or qualifying withdrawals, you'll need to complete Schedule 15.
This checklist encapsulates the major tax changes affecting the 2023 tax year, ensuring you're well-prepared for your T1 tax return filing in Canada.
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This blog post is intended to provide general information only and should not be construed as tax advice or opinions. Always consult a qualified accountant before making any decisions regarding your tax situation.
