Changes to Paper Filing Disempowering

Last tax season, only 7% of all Canadian tax filers filed on paper. The CRA is pushing for zero. It continues to steer the holdouts to digitized filing by adding lots of obstacles. Most recently, it is removing almost all the schedules from the tax return package it mails. This seems unfair to people who paper file because they can’t afford a computer and internet, distrust the security of online filing and those who are neither tax or computer literate. Here’s what they are up against:

Breaking News - From Finance Canada today - a postponement of capital gains inclusion rate increase from June 25, 2024 to January 1, 2026—the new date on which the capital gains inclusion rate would increase from one-half to two-thirds on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and most types of trusts.

Last week Finance Canada released draft legislation to confirm the extension of the charitable donation deadline for the 2024 tax year to February 28, 2025. But it’s not for all donations. The fine print in this legislation matters before going ahead and making the donation. Check it out:

Say tuned this Friday, January 31 when CRA is set to release its capital gains calculation forms.  Will they include the proposed new capital gains inclusion rate calculations?  Recall the April 2024 Budget, when our now resigned finance minister Chrystia Freeland announced that the proportion of capital gains that qualify as taxable income would be increased for some tax filers. Is it law?  No.  What should tax filers do?

Many small businesses are currently receiving the long-awaited Canada Carbon Rebate, and for some it’s a sizable sum.  Is it taxable?  It shouldn’t be, according to an announcement made by the Finance Minister last November after the CFIB raised the issue.  In fact, its written statement on the matter on its website also casts this as a tax-free payment.  But did you know, the law says something different?

New! Get hooked on preparing income taxes for tax season 2025 with dozens of true-to-life case studies using professional tax software to build your confidence.  It’s Knowledge Bureau’s Canada’s Income Tax Fundamentals, now available for online training.  It features a dynamic 3 hour instructional overview  - worth the price of admission on it’s own plus personal instructor support!  It’s perfect for anyone new to personal tax filing - really valuable for career development in tax preparation or financial services.  Here are the details.

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