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:

At $7,218, the average balance due to CRA at the end of June was unprecedented. Does this surprise you?  It’s the poll question we asked our Knowledge Bureau Report readers last month and, no surprise, 75% of our respondents said yes it did.  Since then, the number has risen even higher to $7,322 as of July 24.  The amount of money owed on 7,006,135 tax returns filed by Canadians is over $51 billion – exactly  $51,301,022,379. What’s changed?  It can depend on many factors. 

CRA and Finance Canada would like to be more effective in thwarting aggressive tax planning schemes.  Despite previous mandatory disclosure rules, the “timely, comprehensive and relevant” information CRA wants hasn’t been forthcoming.  Guidance to new mandatory disclosure rules, which received Royal Assent June 22, 2023, were published July 25 and the penalties for failure to file the required 9-page RC312 are huge, for both taxpayers and their advisors. Of particular concern are new “notifiable transaction” rules. Tax and financial advisors may have difficulty understanding their respective responsibilities. Here’s an overview with the key points:  

At a time when money is in motion, the buying and selling of assets can result in complex tax treatment.  It’s important for tax advisors to work together with clients who are in these processes and bring in the right stakeholder group of legal and financial advisors to close on these transactions.  The tax consequences should always form part of informed negotiations.  In this excerpt from Evergreen Explanatory Notes, we present a primer on terminal losses.

Most donors with higher net worth portfolios know that donating appreciated publicly traded securities, and other financial instruments such as mutual funds, segregated funds, and exchange traded funds, is a great way to amplify giving potential with tax savings.  It’s a triple win: a leveraged opportunity to  support community causes and a great tax and estate planning opportunity for the taxpayer and their survivors.  But there are tax clouds on the horizon.  Wealth managers, and in particular RWM™ (Real Wealth Manager) and MFA-P™ Designates are well positioned to help assemble a multi-stakeholder solution, but need to take action now.

Fifteen outstanding organizations have come together to support the 20th Annual Distinguished Advisor Conference November 12-14 at the beautiful Banff Springs Hotel. You don’t want to miss hearing from the thought leaders representing these fine organizations with mission critical topics to the theme:  Imagine – Break Free to Transformative Change.  

In this final installment of our three-part series on the financial challenges facing younger generations in Canada, we delve into the role financial advisors can play in guiding their clients through these tough economic times. In the first part of the series, we analyzed the alarming rise in consumer and business insolvencies, particularly among younger Canadians, drawing attention to the gravity of the situation​​. The second part of the series provided insights into the potential benefits of referring financially struggling individuals to Licensed Insolvency Trustees, rather than resorting to immediate bailouts. Now, in this third part, we explore how financial advisors can become better equipped to advise their clients on managing debt and planning for future financial security.