Investigative Tax Prep:  Top Ten Changes to Probe

Tax season 2025 has started with a focus on the increased income levels some taxpayers may report due to proposed changes in capital gains tax laws.  But aside from this there are new questions to probe with clients to ensure the family’s tax returns are filed to their very best benefit, given change in their life and financial events as well.  Here are top 10 queries to add to your interview checklist:

The final repayment deadline for outstanding CEBA loans is today, March 28.  This is the last opportunity to preserve any of the up to $20,000 in loan forgiveness.  Those business owners who failed to arrange financing for repayment must pay up the entire loan plus interest.  Will that push more businesses to close?  If so, it would add to the over 2200 business which closed their doors in December of 2023, for a total of 8 months of active business closures in 2023, according to Statistics Canada.  Check out the provincial trends:

This tax season will be remembered as a challenging one for most tax accountants and financial advisors who work with Canadians who have long tried to protect their savings and their heirs from financial ruin in retirement.  There are two reasons: CRA’s new filing requirements for bare trusts and the significant cost factors retirees now face due to inflation, taxes and professional fees to keep it all straight.  That makes it a great time for a bootcamp.

Cycle 10 CIRO (previously IIROC) credits now available from Knowledge Bureau! Become a Designated Specialist: take the Real Wealth Management™ Program), the MFA-P™ Philanthropy Services Specialist Program to earn CE Credits and enhance your value proposition. Check out the details below.

March 28 marks the last day CEBA loan recipients who have submitted a refinancing loan application on or before January 18, 2024 can qualify for up to $20,000 of loan forgiveness.  The outstanding principal of the CEBA loan must be repaid on or before March 28, 2024.  Otherwise, unpaid loans remaining become non-amortizing term loans with full repayment due December 31, 2026.  But there is still at least one bright spot for those loan holders, but it comes with tax complexity.

RRSP and RRIF are retirement savings plans where investments grow on a tax-deferred basis.  When proceeds are taken from these accounts, the full amount withdrawn is reported on the RRSP/RRIF holder’s tax return as income. Can charitable giving reduce the tax sting?  Is that a smart strategy given the detailed tax rules that can leave a tax gap? Can planning now help keep assets invested as markets show signs of recovery?  Yes, but you need to do a little extra tax legwork.

Everyone is likely to have some out-of-pocket medical expenses during the year but many people don’t know that they can claim them.  Common examples are batteries for hearing aids, certain travel costs incurred to seek medical attention not available in your community or contact lenses for example. But there’s also a long list of expenses that can’t be claimed.  Can you name any of them?  The CRA offers a great list: