Recently, I joined my team to attend a breakfast briefing event sponsored by Sage Canada and organized by Foundation Magazine for the philanthropic sector in Canada. It was an insightful event on impact of new trends, new tech, and digital transformation in the not-for-profit sector, a significant part of our practice at GMS Professional Corporation. It was great to hear from great leaders in the sector - Duke Chang, President and CEO of CanadaHelps; Jason Shim, Chief Digital Officer, Canadian Centre for Nonprofit Digital Resilience; and Anita Tong – Chief Finance and Administration Officer, World Vision Canada. The key takeaway is the urgency in advocating for the adoption of new tech in the not-for-profit space as this sector is nearly a decade away compared to the for-profit sector when it comes to new tech. Enjoy this issue and I wish you all a Happy Easter celebration and a relaxing long weekend. Please remember to share this with everyone in your network:
1. What’s In It For You In The 2023 Federal Budget?
About a week ago, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the government’s budget. The budget includes a number of measures that will impact businesses and individuals. However, for the average middle income individual and micro small business owner, there will be little or no tax impact resulting from this budget. Here are a few key highlights. The budget:
- proposes to increase the maximum Goods and Services Tax credit (GSTC) amount for January 2023, to be known as the Grocery Rebate. Eligible individuals will receive a Grocery Rebate equivalent to twice the regular GSTC amount received for January
- amends the alternative minimum tax (AMT) to better target the AMT to high-income individuals
- proposes to double the maximum employment deduction for tradespeople’s tools, from $500 to $1,000, effective for 2023 and subsequent taxation years
- proposes to amend the Income Tax Act (ITA) so that, effective March 28, 2023, the terms of an RESP may permit an increase in educational assistance payment (EAP) withdrawals
- introduces a refundable investment tax credit for certain clean hydrogen equipment
- expands the refundable investment tax credit for clean technology equipment to include certain geothermal energy systems
- announces a consultation on specific proposals to strengthen the general anti-avoidance rule (GAAR)
You can get all the details in this budget analysis by PwC here.
2. Personal Tax Return Filing Deadline Is Approaching…Have You Filed?
In the recent survey I completed on personal income taxes, 47% of you said you will be filing your taxes yourself, while another 24% plan to use a friend to help file their taxes. As technology continues to improve, we believe that this trend will continue to grow in the coming years. The truth is that filing personal taxes is not the hard part. What may be challenging is getting the appropriate insights from your tax returns that will enable you plan better going forward. As you file your tax returns this year, here are some questions to consider:
- What’s the dollar amount I paid in taxes?
- What’s my average tax rate?
- What’s my marginal tax rate?
- Why did I get a refund? Why did I NOT get a refund?
And when you have answers to these questions following the filing of your tax returns, you want to consider your next action steps. For example, what steps can you take in 2023 to pay less taxes than you did in 2022? This is where insights come in handy. As I’ve said many times, when you don’t get insights, you end up paying more in taxes than you’re required to and a dollar lost in taxes today will not only cost you a dollar today, IT WILL COST YOU A MULTIPLE OF THAT DOLLAR OVER TIME!
If you’re looking for INSIGHTS to help you minimize taxes, then consider the Personal Tax Services we offer. With our services, we can help you minimize taxes, improve cash flow and get ahead financially. Get the details here.
3. The Value of Knowing Yourself
Many people go through life drifting…and this often happens when you don’t have priorities you focus on in life. When you don’t have overarching goals that drive you to your desired destinations. In his email this week, James Clear highlights this quote that should prompt you to dig deep and really value your dreams and your goals so you can prioritize your daily activities accordingly:
"The world will ask you who you are, and if you don't know, the world will tell you."
James Clear, author of Atomic Habits, shares insightful quotes like this weekly. Consider subscribing to his weekly emails for tips on cultivating winning habits. Check it out here.
4. How Can Family Banking Make You More Tax-Efficient?
Many of you may not be familiar with the concept of “Becoming Your Own Banker” and this is why I invite you to join me at the upcoming Family Banking Summit in Toronto on April 28th. At this event, you will learn how you can operate a Banking System within your family that will impact all other areas of your life from financing the next best investments, growing your business, planning for your holidays, giving your children a better education and many more. If you’ve been following me, you know how much I value the tax-efficient life and “Becoming Your Own Banker” is one of those strategies that will allow you shelter and grow your wealth tax-free. To learn more about the event and to register, go here. I look forward to seeing you there.
5. Are You Prepared For The New Underused Housing Tax?
If you own a residential rental property in Toronto, you may be aware of the new Toronto vacant property tax as you would have received a letter in the mail. This is an annual tax levied on vacant Toronto residences, payable beginning in 2023. What you may not be aware of if the newly introduced Federal Underused Housing Tax (UHT) which imposes a 1% annual tax on the value of residential real estate considered to be vacant or underused that is owned on December 31 of each year. While the government indicated that the tax would target property owned by non-Canadians, the scope of filing requirements extends to many Canadian corporations and individuals, including Canadian Controlled Private Corporations (CCPCs), trustees of a trust and partners of a partnership. The first filings and taxes are due by May 1, 2023. Penalties for failure to file the return (even where no tax is payable) start at $5,000 for individuals and $10,000 for corporations. In the coming weeks, I will share a short survey or checklist you can complete to help you determine if filing is applicable to you and if you have any tax liabilities owing on this. So, stay tuned.