Mark Your Calendar: Critical Deadlines for May and June

Tax season never truly ends, it seems, as there are many more upcoming tax filing, investment planning and education milestones to discuss with your clients over the next six months. Check out our handy checklist below and then test yourself – what are the conversation openers you’ll use and with which clients? It’s your opportunity to shine with every member of the household:

In a climate of rising interest rates, Home Equity Lines of Credit (HELCO) and other joint borrowing opportunities can present a new risk for two generations in the family.  Joint borrowers need to be aware of the dangers ahead and the tax consequences; all reasons why that’s an important part of a year-end tax planning conversation.

The April 2022 federal budget, introduced a Labour Mobility Deduction for skilled tradespeople and apprentices who need to temporarily relocate for work. It’s important to advise eligible taxpayers about this, so they keep receipts to back up the claims retroactively to January 1, 2022.   

In Canada, as in many advanced economies, the age group that grew the fastest in recent years was those aged 65 and over. That’s not pandemic-related, it’s simply the aging of the baby boomers. Those over 65 tend to have the lowest labour force participation rate, and that has been pulling down the growth of Canada’s labour force in recent years, according to recent remarks by Tiff Macklem, Governor of the Bank of Canada. In addition, many small businesses in Canada are owned by Baby Boomers.  There’s a potential problem if Baby Boomers own a business and plan to use the money they’ve invested to pay for their retirement years.

Nothing like a positive headline to grab your attention.  The Financial Post article goes on to say: It’s been a miserable year for the global economy. And things could get worse with a mild recession potentially on the horizon. In an extreme downside scenario, this could wipe out US$5 trillion in global output, according to Bloomberg Economics. So, what to do?

There is no doubt your clients are interested in knowing how to inflation proof and recession-proof their wealth and navigate successfully through emerging risks from the CRA. To accomplish the former, advisors must have broader knowledge on upcoming tax changes and how astute investment planning in a very new economic environment can help clients maximize after-tax income and reduce capital erosion.

Our economy is shrinking and we can’t avoid that.  This was the hard truth Canada’s Finance Minister delivered in her November 3, 2022 Fall Economic Report and Mini-budget, which was followed the next day with Explanatory Notes to a 169-page Ways and Means Motion that amends the Income Tax Act for new measures.  A brief synopsis of the economic issues follows.  Be sure to request a copy of the Knowledge Bureau Special Report; also enrol now to attend the Nov. 16 Annual Year End Tax Update for in-depth details for professional advisors.