Wildfires: Apply for Taxpayer Relief Provisions

It may not be the first concern, but Canadians affected by wildfires may worry at some point about the tax consequences of lost records or missed filing deadlines – the next one on June 16 for those filing T1 returns with proprietorship income. Fortunately, the CRA offers Taxpayer Relief Provisions when there are circumstances beyond a taxpayer’s control, including natural disasters, serious illness or death in the family, or errors made by the CRA, which may trigger penalties and interest due to late or incomplete tax filings. Here’s what you need to know.

The 31st Actuarial Report on the Canada Pension Plan (CPP)[1] was released to the Finance Minister on November 14 and tabled in Parliament on December 14, 2022, as required by law, every three years. It is an important and comprehensive overview of Canada’s vital economic statistics from which to project the sustainability of the CPP.  What’s interesting about this report is how the uncertainties ahead may affect our rate structure and what a wealth of economic news it brings.

There’s an argument to be made with high inflation, a shaky economy and possibly lacklustre returns – that this year is the worst year to retire. Retirees NEED to know how long their assets are going to last. High inflation makes that tricky as retirees must draw down more income to pay for basics like groceries and gas. 

According to a report by Toronto- based research firm Strategic Insight, approximately $1Trillion in personal wealth will change hands by 2026, with roughly 70 percent of that in the form of financial assets.  In fact, this is already taking place, as Baby Boomers and Gen X transfer their wealth to Millennials and GenZ. 

Knowledge Bureau’s Advanced T1 Tax Update is more than an incredibly fun and full day of shaking out the cobwebs and learning about the “dark tax horses” with colleagues from coast to coast! This tax update has got you covered for the entire tax season with great online resources: a comprehensive online certificate course featuring over 100 retention questions,  Evergreen Explanatory Notes – a complete tax research library - plus Knowledge Bureau’s Discovery Tools – 16 sophisticated tax planning calculators! 

Old Age Security recipients will receive more on January 27, 2023, due to inflation indexing. But just how much more is more complex these days: it depends on your age – those over age 75 receive 10% more - and whether you have postponed receiving OAS to age 70.  Here are the benefit amounts to watch for:

Advisors should identify clients who have balances owing to the CRA as soon as possible in the new year to ensure they pay off their balance due and if they cannot, to advise on the most tax-efficient way to eliminate this expensive debt.  Interest costs accrue daily at the current prescribed rate plus 4%.  The new rates in effect from January 1, 2023 to March 31, 2023 will increase the cost of a debt to CRA significantly: