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Sure, worrying about the tax season makes sense.
You are supposed to collect all those receipts and documents on time and file your taxes as soon as possible to avoid any penalty, right?
But…
What if you missed out on an important change related to your tax benefits?
What if you paid a lot more than you were supposed to?
Definitely, you wouldn’t like to be in that situation!
Therefore, to claim the right number of tax credits and keep working on your financial goals, read on to the tax changes mentioned below!
Updates In Taxes For 2023
It’s almost tax season!
Which implies you still have time to learn everything about the right tax filing. And, for that, you need to ensure you are updated in every possible way.
So, here are a few important changes that will impact the way you buy your first home, claim a tax refund, fight inflation, and so on!
1. Good News For First-Time Home Buyers Tax Credit
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Due to the prices going high and above, the government and the Canadian revenue agency (CRA) have decided to make accommodation affordable, especially for first-time home buyers.
And for this, there have been some changes made to the HBTC, also known as the home-buyers tax credit.
These changes include:
- The HBTC has been increased
- The increase is expected to double the existing HBTC
- The credit you can claim is from your non-refundable tax credit
- First-time home buyers can claim around $10,000 as credit
This initiative will directly help you save your hard-earned money so that you can make use of it while moving in or for any other purpose you find befitting.
2. Changes In Climate Action Incentive Payment
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The climate action incentive payment also known as CAIP is the amount the government issues in line with its climate repair policies.
There are some changes made to its eligibility criteria and the conditions to claim it in the first place.
These small updates include:
- To reap the benefit of CAIP, you’re supposed to file your taxes
- These income tax and benefit returns should be paid regardless of the money you earned
- To get your amount on April 14, 2023, you’re supposed to file your taxes by March 24, 2023
- Residents of Prince Edward Island, Newfoundland and Labrador, and Nova Scotia are also included in the eligible candidates' list.
Moreover, if you and your partner have been living outside a CMA, you are supposed to fill in the CAIP section available on page 2 of your tax returns.
3. Adjustments Made In Repaying Covid-19 Benefits
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The CRA has introduced a number of benefits to fight covid-19-related problems and financial issues faced by not one but almost every other Canadian resident.
These benefits can be named as:
- Canada Recovery Benefit (CRB)
- Canada Emergency Response Benefit (CERB)
- Canada Sickness Recovery Benefit (CSRB)
- Canada Recovery Caregiving Benefit (CRCB)
- Canada Worker Lockdown Benefit (CWLB), etc.
However, when it comes to repaying any of these benefits, CRA thought to make it less stressful for everyone so that they are not overburdened by tax and benefit returns simultaneously.
Some of the adjustments made are:
- For your ease, your benefit return information will be sent to you in your T4A slip.
- You have the option to pay those benefits in full or in parts if your net income falls above $38,000.
- Covid-19-related benefits that are utilized by you only once are excluded from taxation.
4. Increased Tax Brackets
As mentioned before, the Canadian government and CRA are mainly focused on creating ease for people in terms of
- Having their emergency funds
- Keeping up with the high food prices, etc
- Managing their income and spending
And everything else that can make or break one’s financial lifestyle.
Keeping in line with that, tax brackets have been increased in order to help taxpayers save for themselves more than they did before.
These changes in tax brackets are discussed in detail below:
If your income is
- Up to $50,197
- between $50,197 and $100,392
- $100,392-$155,625
- $155,625-$221,708
- Or, above $221,708
Then your taxable percentage will be
- 15%
- 5%
- 26%
- 29%
- And 33% respectively!
If you found a slight change in your tax bracket, congrats you will be paying fewer taxes than you did in the previous year!
Practical Tips To Benefit From Taxes In 2023
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There’s no doubt that tax filing is one of the most daunting tasks ever.
But there’s something that can make it more challenging for your finances. And that is, not taking your taxes seriously!
Therefore, below are some practical tips to help you pass the tax season as smoothly as possible!
1. Find Ways To Make Up For A Bad Credit
There’s no doubt that the Canadian government has introduced updates like
- Increasing RRSP annual dollar limit to $29,210
- Increasing the TFSA contribution limit to $6,500
- Increasing the Basic Personal Amount (BPA) to $14,398
And many others.
However, if your Equifax credit score is not keeping up with your financial lifestyle, this can result in an upside-down situation for you. For this, simply focus on improving your bad credit by:
- Using a secured credit card to make purchases
- Never missing a CC payment and everything in between
- Avoiding services that secretly overburden your credit utilization
Moreover, another way to improve relatively bad credit is by sharing the cost of living with your family or loved one.
2. Never Miss Out On Your Taxes
Yes, we get it; taxing, and everything in between takes ages to complete but it is definitely not something that can’t be fixed. This is mainly because not taking your taxes seriously can even result in missed out payments.
So, to avoid that make sure you:
- Keep track of your Equifax credit report
- Have a diary to jot down your major expenses
- Consult a professional when it comes to business taxing, etc.
When you file taxes correctly you become financially responsible. As a result, the money guru in you awakes and starts creating strategies that ensures you get to enjoy a financial life without dealing with debt and loans.
Final Conduct
Being a taxpayer comes with a ton of responsibility. You wouldn’t like to miss a payment when it can directly impact your ability to secure funds and everything in between.
Moreover, wrong filing or no filing at all can hurt your credit score and financial life. Heck, you might even have to deal with a lawsuit submitted by officials.
So, if you want to stay focused on achieving your money resolutions or goals, you have to keep yourself updated on everything changing in the tax world!
Don’t worry. We’ve got everything covered. Give this guide a read and we promise you’ll be ready to do your taxes like a pro!
