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The best way to elevate your probabilities of getting an even bigger tax refund subsequent 12 months

Now could be a important time to plan your taxes

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Canadians typically affiliate tax season with submitting returns in March or April, however now’s a important time to plan your taxes, says one skilled.

“12 months-end is basically the important time to do your tax planning,” Jamie Golombek, managing director of tax and property planning at CIBC Non-public Wealth and a Monetary Publish columnist, mentioned in a current interview with FP’s Larysa Harapyn. “There are very particular issues that you want to do earlier than the tip of the 12 months to reap these advantages come subsequent submitting season.”

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Tax-loss promoting is one place to start out, however maybe not for these trying to offset capital positive aspects in overseas foreign money investments.

Golombek mentioned buyers who bought U.S. shares 10 or 11 years in the past, when the U.S. greenback was on par with the Canadian greenback, ought to contemplate recalculating their foreign-exchange losses as a result of a loss on paper may be a achieve when transformed to Canadian {dollars}.

“Tax-loss promoting will truly backfire on you, so take note the overseas alternate when doing these achieve and loss calculations,” he mentioned.

First-time homebuyers may also take benefit by opening a first house financial savings account (FHSA) earlier than the tip of the 12 months. The account permits first-time homebuyers to contribute as much as $8,000 per 12 months and obtain a tax deduction for his or her contributions.

Golombek mentioned the advantage of opening an account in 2023, even if you happen to solely contribute $100, is that you could carry ahead the unused room (an extra $7,900 on this case) and contribute extra the next 12 months.

“There’s no threat … so individuals ought to get on that in the event that they’re a first-time homebuyer,” he mentioned.

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Golombek additionally suggested householders to look at the brand new credit obtainable for 2023, such because the multi-generational house renovation tax credit score. For instance, Canadians who’ve renovated to create a secondary dwelling for a senior (65 or older) or an individual with a incapacity can get a 15 per cent federal credit score on as much as $50,000 in bills.

He additionally provided some recommendation for the highest one per cent of earnings earners ($173,000 and above) concerning new various minimal tax (AMT) laws.

“Beginning Jan. 1, 2024, AMT may have a way more important influence for sure taxpayers,” he mentioned.

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Up to now, capital positive aspects have been 15 per cent taxable, however within the new 12 months, they are going to be 100 per cent taxable. Nonetheless, there are methods to keep away from the AMT, Golombek mentioned, together with realizing a big achieve, promoting a property or making massive charitable donations earlier than year-end.

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