As the tax season kicks off, it’s time to get your receipts together and hope for a substantial refund. The official start of tax-filing season is marked by the opening of Netfile, an electronic filing service, which begins accepting returns on Monday. Let’s break down the steps you need to take, important deadlines, and notable changes for this year.
Gathering Your Tax Information
When preparing your tax return, it’s recommended to tackle the “messy part” first. This means gathering all the necessary documents that are not readily available through the Canada Revenue Agency (CRA) website.
According to Brian Quinlan, a partner and chartered professional accountant with Allay LLP, you will need receipts for various expenses, including:
- Medical expenses
- Donations
- Child-care expenses
- Union dues
For forms such as T4s (employment income), T4A (pension-related income), T5s (interest and investment income), and T3s (trust-related information), you can generally access them through your CRA MyAccount profile.
“Most of those forms are available electronically now, either from your bank or your employer, who may send you a PDF of your T4. Even if you’ve moved or didn’t receive a slip, it’s likely available on CRA’s website,” Quinlan explained.
Key Filing Deadlines
The tax-filing deadline for individuals is April 30. However, for self-employed individuals, the deadline extends to June 16 due to June 15 falling on a weekend this year.
It’s important to note that even though the filing deadline for self-employed individuals is in June, interest on any outstanding tax amount begins accruing at the end of April.
Additionally, for those looking to reduce their 2024 tax bill, RRSP contributions must be made by March 3 to qualify for a tax deduction.
Changes to Tax Filing for 2024
Capital Gains Inclusion Rate Delay
One of the major changes for this filing season involves the capital gains inclusion rate. The federal government has delayed the planned increase to the capital gains inclusion rate until 2026. The proposed change would have taxed two-thirds of capital gains over $250,000, but instead, the rate will remain at 50%, as it was in 2023.
As a result of these changes, the CRA announced that its systems won’t be ready to accept returns involving capital gains or losses until late March. To accommodate this delay, the CRA is offering interest and penalties relief until June 2 to give individuals more time to file.
Charitable Donation Extension
Another significant change this tax season is a two-month extension granted by the government for obtaining charitable donation tax receipts. This change comes in response to the Canada Post strike that delayed mail delivery late last year.
As a result, donations made in the first two months of 2025 can be claimed on either your 2024 return or your 2025 return.
Maximizing Your Tax Return
Strategic Credit and Deduction Planning
When looking to maximize your tax return, it’s essential to understand which credits you are eligible for. Some tax credits can be grouped together or transferred between spouses or even from children to parents. For instance:
- Charitable donations can be grouped together and claimed on one return.
- Medical expenses can also be grouped together for a more significant tax benefit.
- Tuition credits from a low-income student can be transferred to a higher-earning parent to reduce the tax burden.
According to Quinlan, tax planning should not be done in isolation: “Don’t be a ‘selfish tax planner.’ You need to consider the tax returns of your entire family.”
Benefits of Filing on Time
Many taxpayers mistakenly believe that missing the filing deadline won’t matter if they don’t owe taxes. However, Yannick Lemay, a tax specialist with H&R Block, explains that late filing can still have consequences. Even if you have no income to report for 2024, you must file your tax return to receive vital benefits such as:
- Canada Child Benefit
- GST/HST tax credit
- Canada Carbon Rebate
Failure to file can result in missed credits and potential penalties, even if you don’t owe taxes to the CRA.
Key Tax Deadlines and Changes
| Event | Deadline | Notes |
|---|---|---|
| Tax-Filing Deadline | April 30 | For most individuals. |
| Self-Employed Filing Deadline | June 16 | Due to June 15 falling on a weekend. |
| RRSP Contribution Deadline | March 3 | To reduce the 2024 tax bill. |
| Charitable Donation Receipt Extension | January to February 2025 | Donations made during this period can be claimed on either 2024 or 2025 returns. |
| Capital Gains Rate Delay | Until 2026 | Inclusion rate remains at 50%. |
| CRA’s Acceptance of Capital Gains Returns | Late March | Due to system updates. |
As tax season approaches, it’s important to stay organized and informed about the changes and deadlines for 2024 tax filings. By gathering all necessary documents, considering strategic deductions and credits, and filing on time, you can maximize your tax return and avoid any potential penalties.
Be sure to take advantage of the extended charitable donation receipts and stay up-to-date with changes like the capital gains inclusion rate delay. Proper planning now will help you make the most of the season and potentially increase your refund.
FAQs
What is the deadline to file taxes for most individuals?
The deadline for most individuals is April 30, but self-employed individuals have until June 16.
How can I maximize my tax return?
You can maximize your return by transferring tax credits between spouses or from children to parents, and by grouping eligible expenses like charitable donations and medical expenses.
What are the penalties for filing taxes late?
Even if you don’t owe taxes, you could miss out on credits and benefits. In some cases, penalties may also apply.