The landscape of properly filed taxes is ever-changing, and with new legislation and laws being introduced each year, keeping up with Canada’s various tax rules can seem overwhelming when you try and file on your own.
For the 2023 tax filing season, several key changes could significantly impact how much you pay in taxes and affect your possible refund amounts. Let’s explore some of the most consequential updates so that you can understand how they may affect your bottom line when it comes time to submit your return.
Adjusted Tax Brackets
In a move to account for inflation, the Canadian government has adjusted its tax brackets for 2022. This includes raising the beginning of each bracket to maintain buying power for Canadians. As such, individuals with incomes ranging from $0 to $50,197 will pay 15% in taxes; those earning up to $100,392 will pay 20.5%; incomes up to $155,625 fall into a 26% bracket; 29% is charged on those making up to $221,708; and those pulling more than $221,708 this tax year will be subject to a 33% rate.
For those who hover around a specific tax bracket boundary, this means that you may be shifted into a lower bracket this year and paying less taxes as a result.
TFSA Limit Remains Unchanged
Despite the current financial uncertainty, the TFSA limit remains unchanged, which can be viewed as both a blessing and a curse for those looking to build their savings. On the one hand, it’s an opportunity to continue to contribute $6,000 each year to maximize your earnings. On the other hand, it might put constraints on savers who want to accumulate more money than they can contribute towards their TFSA accounts. Ultimately, if used wisely and strategically, this high contribution limit keeps Canadians in great shape when it comes to saving more of their hard-earned money.
Work From Home Credit
Working from home has become more of the norm this past year, and you may be eligible to claim up to $500 in expenses related to working remotely under the work-from-home tax credit. This allowance can either be acquired by tallying up what you have spent on work-from-home items like desks or additional screens for your computer, or by using the flat rate method with a set amount of $2 for each day worked from home during the pandemic.
These are just a few of the notable changes that will factor into tax returns this year – there are several newly introduced credits for both personal and business claims that can be found with the expert help of Keenans Accounting. Call us today at 705-526-7628 to get an early start on your taxes and ensure you have all the proper paperwork and receipts you need to succeed when it comes time to file.