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!

December 16, 2024.   Amidst the drama of the resignation of the Finance Minister, the Fall Economic Report itself was shocking in it’s revelation of a projected $61.9 Billion dollar deficit for the year 2023-2024 and another $48.3 billion for 2024-2025, with  no end of deficit spending in sight for the rest of this decade.  This will generate public debt charges that grow from $47.3 billion in 2023-2024 to $69.4 Billion in 2029-2030.  These are swoon-worthy numbers that do not take into account the potential economic fallout of threatened tariffs from the U.S. and the effect this might have on nominal GDP, the indicator of growth (or loss) of tax revenues going forward.  Subscribe to KBR now to get the full report, and check out a summary of the tax measures below.

Winnipeg, which already has one of the highest residential tax rates in Canada,  is the latest city to propose a property tax increase this week.  At 5.95%, this is the largest increase in 34 years and is expected to raise $44.4 million dollars.  What is behind these tax increases, and why, when taken together with the convergence of other layers of tax, is tax reform so urgent in Canada today?

Will seniors be receiving a raise in early 2025?  Unfortunately, not, at least for the first quarter.  Adjustments to the benefits are based on the Consumer Price Index (CPI), OAS and GIS benefits will not be increasing for the January to March 2025 quarter.

Canada’s per capita spending on health care was among the highest internationally, at CA$8,119 and even so, the amount of money Canadians spend out-of-pocket on private health care and insurance also exceeds the OECD average, according to a recent report by the Canadian Institute for Health Information (CIHI).  This is especially difficult for cancer patients, for whom out-of-pocket costs can be astronomical.   A silver lining is that some of those costs may be recoverable through the personal tax system.  Here’s an overview of the kind of write-offs most people miss, and some of the complexities that come with the claims.

Canada’s Finance Minister is scheduled to release the Fall Economic Statement on Monday December 16. Knowledge Bureau will release a Special Report to inform you on the changes and in addition, based on our clients’ wishes we are announcing an expansion of our CE SAVVY Summit offering to accommodate tax training needs to accommodate the enormous volume of changes to forms and procedures expected throughout January, February and March.   

According to the 2025 Canada Salary Guide released by Robert Half, Competition is intense for skilled finance and accounting talent, and to compete businesses need to meet or beat market salary rates in order to retain professional staff with specialized in-demand skills. Many are training to upskill their existing staff in order to overcome technical skills gaps. Knowledge Bureau’s programs and courses leading to specialized credentials can help prepare business owners in the field with technical training their new hires need in tax and accounting.