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:

There are more tax filing milestones in sight, and tax and financial professionals will want to ensure their clients are reminded of them now with Knowledge Bureau’s handy checklist.  Most important is the June 15 tax filing deadline for those with unincorporated businesses.  But there are other important dates too.  Here are some important dates and deadlines coming up to make note of in May and June!

How maxed out is your time?  Most business owners struggle with this question – too much to do, too little time.  To prioritize, especially after tax season, consider:  are you spending more time working on the creation of income or the creation of wealth?  They are conjoined for sure, but by executing on financial priorities that are critical in all the important spheres in your life –in a healthy balance – you will likely achieve more of both. 

There are 8 important topics and 6 incredibly interesting speakers lined up to provide you with critical education on the latest budget changes and tax, retirement and estate planning trends.  By signing up before Monday, you’ll also get a sneak peek at a brand-new learning experience with Knowledge Bureau, including a comprehensive online course to supplement the sessions. Check out the topics and speakers and enrol now.

Ready to increase your tax skillset for the 2023 tax season? The newly updated Personal Tax Course – Advanced Level from Knowledge Bureau will prepare you to dive deeper into the more complex tax scenarios you will want to do more confidently to enhance your professional service offerings next year.  It’s available now so you can start your Summer School – personally or for your staff – and as a KBR reader, we have a special tuition offer for you too.

The prescribed interest rate is set quarterly based on the average return rate for three-month treasury bills for the first month of the previous quarter, raised to the next highest whole percentage point.  For April, the average return rate for three-month treasury bills topped 1% so the prescribed rate is set to 2% for the July to September timeframe.

Did you know that generally speaking, interest is considered to be a capital expense and is not deductible against other income unless it meets specific requirements in the Income Tax Act? To be deductible, the use and purpose of the money must be established as interest costs – and therefore the amount of the deductions may rise, so expect increasing scrutiny by the CRA.  The following six rules will help tax specialists determine whether interest costs may be attacked by the CRA and keep meticulous notes on individual client files to trace the source of the borrowings.