Have you had many changes in 2022? If your answer is YES, this could have a big impact on your taxes.
If so, this could have an impact on your taxes.
Perhaps you've started your next epic career, welcomed a new family member or tied the knot with the love of your life. If any of these situations sound familiar, the Canada Revenue Agency (CRA) is well aware of them. Big changes in your life can mean big changes in your tax situation. Here are a few examples to help you understand what to expect.
You've started your first job;
The transition from student to fully employed adult can be a difficult one. You may have been surprised to see how much tax was deducted from your first paycheck, but you may be entitled to claim a tax credit. If you weren't able to claim all your tuition and education credits while you were in school and didn't transfer them all to someone else, they would have been carried forward when you filed your next returns. This means they can be used this year to reduce your overall tax bill.
Congratulations on getting your ring on!
While you're enjoying marital bliss, take the time to inform the CRA of your new family situation by completing Form RC65 - Change of Marital Status. Here are some other useful things to know:
- Even if you do everything together, taxes won't be part of it. Spouses must file their own returns during tax season, but you'll enter your spouse's SIN and net income on the first page.
- You won't pay any more taxes, but benefits such as GST/HST and the Canada Child Allowance (CCA) may be affected by your new family income.
You've bought your first home.
No more rent for you! If you're a first-time homebuyer, you're entitled to the Homebuyer's Amount. This tax credit has increased from 5,000 $ to 10,000 $, representing tax savings of 1,500 $.
Here are some other useful things to know:
- If you bought your home with your spouse, the tax credit can be shared between you if you are first-time homebuyers.
- You don't need a specific receipt to make this claim. You'll simply need to have documentation to support the fact that you've purchased a home in the past year, if requested by CRA.
- If you borrowed from your RRSP for your down payment, you have two years before the CRA starts asking you to pay it back.
You've come a long way.
When your first child arrives, he or she will be registered after delivery. Here's what you need to know:
- You may start receiving Canada Child Benefit (CCB) payments: this monthly payment is determined by family income and is designed to help cover the cost of raising a child.
- You've taken maternity or parental leave: new parents receiving employment insurance benefits should remember that this income is taxable, which may result in a tax bill at the end of the year, depending on other income earned during the rest of the year.
- Thinking of opening an RESP account: Your little one won't always be little. While post-secondary education may still seem a long way off, contributions to a Registered Education Savings Plan (RESP) can qualify for matching amounts through the Canada Education Savings Grant. So it's a good idea to start early.
Have there been any other changes in your life in recent months?
You may have experienced other important changes not listed above, and wonder if they affect your taxes.
- Are you a single parent with a child who has turned 18 in the last year or so?
- Is your spouse earning a lot more this year?
- Has your spouse quit his or her job to stay at home with the kids?
- Looking after an elderly relative?
If you answered yes to any of these questions, your tax situation has also changed. This is a good time to consult a tax professional to make sure your employer is withholding the right amount of tax, and to see if you can benefit from any other tax credits or deductions.
When big changes occur, it's easy to get caught up in them and not put taxes first. By taking a minute to inform the CRA of any events that may affect your tax situation, you can save yourself some headaches along the way.
Not sure if changes in your life mean changes in your tax bill?
Visit Cabinet XP and talk to one of our professional representatives at the Canada Revenue Agency and Revenu Québec. They can guide you through all the steps you need to take, and tell you about any new tax credits or deductions to which you may be entitled. You can make an appointment by phone at 514 797 0019 or 514 545 3838 or by e-mail to info@cabinetserviceconseilxp.org or dgxp@cabinetserviceconseilxp.org or online via the website's appointment form.
