Tax Change: Advise Taxpayer About Short-Term Rentals

Taxpayers who own a residential property and rent it out must be aware that income reporting is required in most cases.  Further if the rental was for periods of less than 90 days, expenses to offset that income could be restricted.  These Short Term Rental (STR) rules are new for the 2024 tax year.  Here’s what you need to know based on recent directives from Finance Canada and the CRA, which includes a brief reprieve for some STR owners in 2024:

This month is Financial Literacy Month in Canada.  “Financial literacy is defined as having the knowledge, skills and confidence to make responsible financial decisions,” says Evelyn Jacks, a member of the Federal Task Force on Financial Literacy. “It’s a critical life skill especially in these financially challenging times.” For these reasons, Knowledge Bureau is pleased to introduce a new series of short courses to help professionals and their clients untangle today’s complex financial issues:  the CE Savvy Biz Ed™ and CE Savvy PD™ courses. “

Federal tax brackets and personal amounts are indexed annually based on changes to the consumer price index (CPI), but indexing lags inflation by nine months. So, although inflation is running near 7%, 2022 tax brackets and personal amount are 2.4%.  However, 2023 brackets and personal amounts will be indexed at 6.3% based on the average CPI changes from October 2021 to September 2022.  This is the highest indexation rate in 40 years. 

This is Part 3 of a series of 3 articles.  In Part 1 we started by discussing the common measurements of inflation and introduced some of the major causes of inflation.  In Part 2, we discussed monetary and fiscal policies that are affecting inflation.  In Part 3, we will discuss strategies that we can use to help alleviate some of the pains from rising prices.

Your clients may wish to understand how poised their investments are for success in the short term, and that may involve a discussion about the competitiveness and the growth of the Canadian economy.  How competitive is Canada and why is that important as a recession looms in 2023?   

Last week Distinguished Delegates at DAC 2022 were asked to get out of their comfort zones and make new, big goals to embrace what will be a difficult 2023. One thing that stood out to us: Many delegates see this time of high inflation and high anxiety as an opportunity.  It’s a perfect time to add value in all areas: accounting, tax, bookkeeping and financial services. Here’s a recap of the wisdoms:

We are going to feature an ongoing series highlighting certain courses that professionals will find valuable.  For the next couple of weeks we are going to spotlight professional certificate courses that are directly related to Year-End Tax Planning.  This week’s course is Tax Planning for Corporate Owner-Managers.