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Navigating The 2024 Tax Season: What’s New And Essential Updates

As we gear up for another tax season, it’s crucial to stay informed about the latest changes and updates that will impact individuals, businesses, and trusts.

Let’s explore the significant updates and key developments that you need to know for the 2024 tax season.

What’s New For Individuals?

  • Advance Canada Workers Benefit payments will now be automatically issued to eligible recipients, eliminating the need for application.
  • Additionally, individuals can now deduct up to $1,000 for tradesperson’s tools expenses, doubling the previous limit.
  • The introduction of the First Home Savings Account (FHSA) provides a new opportunity for individuals to save for their first home with deductible contributions and tax-free income.
  • Moreover, a new Multigenerational Home Renovation Tax Credit aims to support families by offering a refundable tax credit for qualifying renovations.
  • It’s also essential to note the revised rules regarding residential property flipping, working from home deductions, and more.

What’s New For Businesses?

Business owners should be aware of changes such as the extension of immediate expensing of capital for eligible property until January 1, 2025.

  • The accelerated investment incentive continues for eligible property acquired after 2023, with a phase-out period implemented from 2024 to 2027.
  • Furthermore, adjustments to the phase-out of zero-emission vehicles and automotive equipment and measures targeting Substantive Canadian Controlled Private Corporations (CCPCs) have been introduced.
  • The inclusion of Clean Economy Investment Tax Credits (ITC) aims to encourage investments in environmentally friendly initiatives.

What’s New For Trusts?

Trusts are subject to new beneficial ownership reporting requirements, necessitating the annual filing of additional information. Clarifications have been made regarding the reporting rules for internal trusts of registered charities, ensuring compliance with regulations.

Other Key Developments

Legislation now requires taxpayers to remit tax payments over $10,000 electronically, with a grace period provided for adjustment. Amendments to the Underused Housing Tax (UHT) rules and adjustments to prescribed interest rates for overdue remittances and taxable benefits are also noteworthy.

  • For overdue, the interest rate starts at 8% in Q1 2023 and increases by 1% each quarter until it reaches 10% in Q1 2024.
  • For overpaid – individuals, the interest rate starts at 4% in Q1 2023 and increases by 1% each quarter until it reaches 6% in Q1 2024.
  • For overpaid – corporation, the interest rate starts at 6% in Q1 2023 and increases by 1% in Q2 2023. It remains constant at 7% for Q3 and Q4 2023 and increases by 1% again in Q1 2024 to reach 8%.
  • For taxable benefits, the interest rate follows the same pattern as overpaid – individuals, starting at 4% in Q1 2023 and ending at 6% in Q1 2024.

What’s New For 2024?

Alternative Minimum Tax (AMT) Proposals

  • Draft proposals released in August 2023 suggest significant alterations to the AMT rules for 2024 and beyond.
  • Stakeholders, including CPA Canada, have advocated for changes to address concerns such as potential impacts on charitable donations.
  • Updates and revisions to the draft rules may occur before finalization, necessitating vigilance and attention to updates.

Mandatory Disclosure Rules And General Anti-Avoidance Rules (GAAR) Amendments

  • Changes to the mandatory disclosure rules will affect reportable transactions occurring after June 21, 2023.
  • Amendments to GAAR apply to transactions occurring on or after January 1, 2024.
  • Broadened scope of GAAR rules may lead to increased reporting obligations for taxpayers and their advisors.
  • Expectations for additional guidance from the CRA in 2024 regarding changes to GAAR.

Intergenerational Business Transfers And Employee Ownership Trusts

  • Amendments introduced to facilitate intergenerational business transfers come with new conditions and corrections to flaws in existing legislation.
  • Employee ownership trusts have been introduced to support employee buyouts.
  • Both measures apply to transactions occurring on or after January 1, 2024.

Short-Term Rental Deduction Changes

  • The 2023 Fall Economic Statement proposed changes to deny deductions for short-term rentals in cases of non-compliance with provincial or municipal laws.
  • Effective from January 1, 2024, this change aims to ensure compliance with regulations governing short-term rental properties.

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Wrapped Up!

Stay tuned for further updates and guidance as the 2024 taxes near me season progresses, and don’t hesitate to consult with WK Tax Services for personalized Tax Accountants Milton advice tailored to your specific circumstances.

Let’s navigate the 2024 taxes near me season together with confidence and preparedness!