2024 Personal Tax Planning Tips

Tax Filing and Payment Deadline for Deceased Taxpayers:

• If the individual’s death occurred between January 1 and October 31, the final return is due April 30 of the following year.
• If the individual’s death occurred between November 1 and December 31, the final return is due six months after the date of death.

Tax Filing and Payment Deadline for Deceased Taxpayers who Carried on a Business:

• If the individual’s death occurred between January 1 and December 15: The final return is due by June 16, 2025 (as June 15 falls on a Sunday).
• If the individual’s death occurred between December 16 and December 31: The final return is due six months after the date of death.

Income Tax Instalments

• Tax instalments for 2024 may be required if net taxes owing for 2024 is projected to be more than $3,000 and their actual net tax owing in either 2023 or 2022 was also more than $3,000. Tax instalment payments for 2024 are due by March 15, June 15, September 15 and December 15. Instalment interest and penalties will be charged by CRA if the required tax instalments are insufficient.

Changes Implemented for 2024 Personal Tax Filings

Lifetime Capital Gains Exemption (LCGE)

The LCGE for qualified small business corporation shares and qualified farm or fishing property increased to $1.25 million, effective June 25, 2024. This provides greater tax relief for eligible individuals disposing of such properties.

Charitable Donations Deadline Extended

The deadline to make charitable contributions eligible for the 2024 tax year has been extended to February 28, 2025. This gives taxpayers extra time to maximize their deductions for donations made to registered charities.

Alternative Minimum Tax (AMT) Changes

AMT is a parallel tax calculation under an alternative set of tax rules from the regular income tax regime. For 2024, there have been multiple changes to the calculation of AMT that increases the likelihood that AMT would apply to taxpayers. For instance, the Federal AMT tax rate increased from 15% to 20.5%, and the exemption threshold rose to align with the second-highest federal tax bracket ($173,205 in 2024). This broadens the AMT base and limits the use of non-refundable credits to reduce AMT liability.

Short-Term Rentals

Effective 2024, a taxpayer with short-term rental income would not be allowed to claim deductions for expenses if the rental activity is not compliant with applicable provincial or municipal licensing, permitting or registration requirements. In addition, taxpayers with short-term rental activities should be aware of GST/HST implications, including registration and collection of GST/HST on rent received, as well as GST/HST rules with respect to the real property itself.

Moving Expenses

Moving expenses could be claimed if a taxpayer moved at least 40 kilometers closer to a new job, business location, or post-secondary institution. Eligible expenses include transportation, storage, travel costs (like meals and lodging), temporary living expenses (up to 15 days), lease cancellation fees, and costs related to selling or buying a home. These expenses must be paid out-of-pocket and can only be deducted from income earned at the new location. If a taxpayer’s moving expenses exceed their income in the year of the move, the unused amount can be carried forward to future years.

Child Care Expense

The Child Care Expense Deduction allows parents to claim eligible child care costs incurred to work, run a business, attend school, or conduct research. A taxpayer can claim up to $8,000 per child under 7 years of age, $5,000 per child aged 7 to 16, and $11,000 for children with disabilities. Eligible expenses include daycare fees, nannies, day camps, and boarding schools (lodging portion only). The claim must be made by the lower-income spouse unless exceptions apply. Receipts are required, and the total claim cannot exceed two-thirds of the taxpayer’s earned income.

FHSA

The First Home Savings Account (FHSA) is a powerful tool for first-time homebuyers, allowing eligible Canadians to save up to $40,000 tax-free toward their first home. Contributions are tax-deductible, and investment growth within the account is not taxed. A taxpayer can contribute up to $8,000 annually, and any unused contribution room (up to $8,000) can be carried forward to the next year, provided the account is open. To qualify, the taxpayer must be a Canadian resident aged 18–71 and not have owned a home during the current or previous four calendar years. Withdrawals for a qualifying home purchase are tax-free, making the FHSA an excellent way to accelerate savings while reducing taxable income.

RRSP Change for First Home Buyers

Since April 16, 2024, the Home Buyers’ Plan (HBP) allows first-time homebuyers to withdraw up to $60,000 tax-free (increased from $35,000 in previous year) from their RRSPs to buy or build a qualifying home. Couples can withdraw a combined total of $120,000 if both are eligible. For withdrawals made between January 1, 2022, and December 31, 2025, the grace period before repayments begin has been extended to five years (instead of two), though the total repayment period remains 15 years. This program helps first-time buyers access their retirement savings to make homeownership more affordable.

Disability Benefits

Many Canadians are eligible for the Disability Tax Credit (DTC) but have not applied, often due to lack of awareness or the complexity of the process. To qualify, a medical practitioner must certify the disabled’s impairment by completing Part B of Form T2201, which is then submitted to the CRA. Once approved, the disabled taxpayer could claim the credit and access related benefits like the Registered Disability Savings Plan (RDSP). If a taxpayer has not applied in past years—after approval, adjustments to tax returns could be made retroactively, potentially resulting in significant refunds. This credit helps reduce financial burdens for individuals with disabilities and their families.

2024 Personal Tax Return Documents

• 2024 – T1 Client Checklist (PDF)
• 2024 – Real Estate Rental Income Worksheet (Excel)
• 2024 – Self-Employed Worksheet (Excel)