Start Tax Season 2025 on Sound Footing

Filing a tax return is difficult as the playing field is one of constant change:  the tax rules are in flux, particularly in the 2024 tax filing year,  with all the uncertainty around the capital gains provisions.  But in addition, taxpayers have undergone many financial and life event changes since their last T1 filings, each of which must be identified for each family member.  Here’s a primer for new year conversations between advisors and clients that cuts through the noise:  what matters is what you keep!

This is an annual favorite book, especially at year end tax planning time, by Jenifer Bartman and Evelyn Jacks from publisher Knowledge Bureau. It addresses a common family secret that plagues millions of Canadians from coast to coast: what to do with the family business at a time when boomers are contemplating retirement.  Will the business sell for the millions owners hope for, blow up, or just wind down?   Will family relationships survive it all?

Especially if you are working with a business owner thinking of transferring the interests in their small businesses to the next generation, consider commenting on the draft legislation released by the Federal Government on August 12.  These clients require more information about new taxing initiatives; in particular, the changes to the Capital Gains Inclusion Rates (CGIR) and the related Lifetime Capital Gains Exemption (LCGE), the new Canadian Entrepreneurs’ Incentive (CEI) and Employee Ownership Trusts (EOTs).  But the rules are very complex and the deadline for response to the draft rules is short: for the CGIR rules, it’s September 3.  For the case of the CEI it’s September 11.   Here’s what you need to know:

Real estate investments have been all over the news with the announcement of several new tax provisions recently.  One of these concerns residential property offered on platforms such as Airbnb or VRBO as a short term rental.   Expenses normally deductible in reducing rental income will be denied effective January 1, 2024 if the property is not in compliance with provincial or municipal laws.  That naturally leads to an important question: what is deductible if the properties fall in line with the law?  Here’s what you need to know:

Parents and students are not the only ones who incur school supply costs.  Teachers across the country are back at school, preparing for their new classes.  In the process they might be incurring some out-of-pocket costs, which are tax deductible.  Here’s what you need to know and share with your teacher friends to shine a light on some good financial news:

New! Get hooked on taxes preparing true-to-life case studies on professional tax software.  File simple tax returns confidently. This 20-hour pre-requisite to Knowledge Bureau’s highly acclaimed professional Diploma and Designation Programs is perfect for anyone new to personal tax filing and especially valuable for career development in the tax preparation or financial services. Pre-register now. Canada’s Income Tax Fundamentals Course™ will be available August 31 and you can take advantage of this pre-sale offer, ending this week!

The upcoming September 18 Virtual CE Summit is focused on Audit Defence and features an important session led by experienced tax litigation lawyer, Anna Malazhavaya, LLB, who will cover significant expansion of the CRA audit powers in the recent years. You will learn the best practices in corresponding with CRA auditors, how to identify situations where CRA auditors overstep their boundaries, how to protect your clients, and when to engage a tax lawyer. Register by September 15 and check out the full agenda online!