Preparing for the 2024 Tax Season: Key Changes and What You Need to Know

As we move into 2024, Canadian taxpayers—both individuals and businesses—need to be aware of significant changes in tax regulations, credits, and deductions. With evolving government policies and new programs introduced to support economic recovery, it’s crucial to stay informed to maximize tax savings and ensure compliance. Whether you’re filing personal taxes or managing corporate taxes for your business in Toronto, preparing early will help you avoid last-minute stress and take full advantage of new opportunities for deductions and credits.

In this comprehensive guide, we’ll walk you through the key tax changes for 2024, what individuals and businesses in Toronto need to know, and how BOMCAS Canada can assist you with expert tax preparation services.

Key Tax Changes for Individuals in 2024

1. Personal Income Tax Brackets for 2024
   The Canadian personal income tax system is progressive, meaning tax rates increase as income increases. For 2024, the federal tax brackets remain largely consistent with inflation adjustments. The 2024 tax rates are as follows:

• 15% on the first $54,700 of taxable income
• 20.5% on income over $54,700 and up to $109,450
• 26% on income over $109,450 and up to $218,750
• 29% on income over $218,750 and up to $341,500
• 33% on income over $341,500

Ontario, like other provinces, also applies its own set of income tax brackets. Here’s a look at Ontario’s 2024 tax brackets:

• 5.05% on the first $48,535 of taxable income
• 9.15% on income over $48,535 and up to $97,070
• 11.16% on income over $97,070 and up to $150,000
• 12.16% on income over $150,000 and up to $220,000
• 13.16% on income over $220,000

2. Basic Personal Amount (BPA) Increase
   The Basic Personal Amount (BPA) is a non-refundable tax credit that allows Canadians to earn a portion of their income tax-free. For 2024, the BPA is increasing to $15,000, meaning individuals can earn up to $15,000 before paying any federal income tax. This increase is designed to provide more relief to low- and middle-income taxpayers, so be sure to include this in your calculations.
3. Climate Action Incentive (CAI)
   The Climate Action Incentive (CAI) is continuing in 2024, with payments scheduled to be made quarterly. Ontario residents will receive the CAI to offset the costs of federal carbon pricing. The amount varies based on family size and province, with individuals receiving approximately $244 in Ontario. Ensure you apply for this incentive when filing your taxes.
4. New First Home Savings Account (FHSA)
   The First Home Savings Account (FHSA) is a new tax-free savings account aimed at helping first-time homebuyers save for their homes. Contributions to this account are tax-deductible, similar to RRSPs, and withdrawals for purchasing a home are tax-free. The annual contribution limit is $8,000, with a lifetime contribution limit of $40,000.
5. Updates to Tax-Free Savings Account (TFSA) Contribution Limit
   The Tax-Free Savings Account (TFSA) contribution limit for 2024 is set at $6,500, allowing individuals to save and grow their investments tax-free. Unused contribution room from previous years can be carried forward, providing further opportunities to shelter income from taxation.
6. Employment Expense Deductions for Remote Workers
   With many individuals continuing to work remotely, the simplified process for claiming home office expenses is still in place. In 2024, you can claim up to $500 in home office expenses without requiring detailed documentation or employer certification, a useful deduction for remote workers in Toronto.

Key Tax Changes for Businesses in 2024

1. Lower Small Business Tax Rates
   One of the most significant changes for businesses in 2024 is the reduction in the small business tax rate. The federal small business tax rate remains at 9% for 2024, applicable to the first $500,000 of active business income. Additionally, the Ontario small business tax rate has been reduced to 3.2%, providing more relief for small and medium-sized businesses.
2. Clean Technology Tax Credit
   Businesses investing in clean technologies can benefit from the Clean Technology Investment Tax Credit (CTITC) in 2024. This refundable tax credit allows businesses to deduct 30% of their capital investments in eligible clean energy equipment. This applies to sectors like manufacturing, energy, and technology—particularly relevant to Toronto’s growing clean tech industry.
3. Apprenticeship Job Creation Tax Credit (AJCTC)
   Businesses that employ apprentices in certain trades may claim the Apprenticeship Job Creation Tax Credit, which provides a 10% non-refundable tax credit on eligible wages paid to eligible apprentices during their first two years of employment, up to a maximum of $2,000 per year.
4. Enhanced SR&ED Tax Incentives
   The Scientific Research and Experimental Development (SR&ED) program continues to offer substantial tax credits for businesses involved in R&D. The federal credit remains at 35% on the first $3 million of eligible expenses for small Canadian-controlled private corporations (CCPCs), and 15% for larger companies.
5. Changes to Digital Services Tax
   A Digital Services Tax (DST) is being introduced in 2024, targeting large multinational companies providing digital services to Canadian consumers. This 3% tax applies to companies with global revenues of over $750 million, and it is expected to impact large digital platforms operating in Canada.

New Tax Credits and Deductions in 2024

1. Multigenerational Home Renovation Tax Credit
   This new tax credit allows families to claim up to $50,000 in renovation expenses for building a secondary suite for a senior or an adult with a disability. The Multigenerational Home Renovation Tax Credit provides a 15% tax credit on eligible expenses, making it easier for families to afford home modifications.
2. Anti-Inflation Grocery Rebate
   In response to rising inflation and food costs, the federal government is continuing its Anti-Inflation Grocery Rebate in 2024. Eligible individuals and families can receive up to $234 per person, with higher amounts for couples and families with children. This rebate is automatic when you file your tax return.
3. Canada Dental Benefit
   The Canada Dental Benefit continues in 2024, providing up to $650 per child under 12 for dental care services, depending on family income. This benefit is available to families earning less than $90,000 per year and not covered by private dental insurance.
4. Electric Vehicle Purchase Incentive
   Canadians purchasing zero-emission vehicles in 2024 can still benefit from federal incentives of up to $5,000, depending on the vehicle type. The Zero-Emission Vehicle (ZEV) Program encourages the adoption of electric vehicles and reduces the tax burden for those making eco-friendly choices.
5. Home Accessibility Tax Credit (HATC) Increase
   Seniors and individuals with disabilities can claim up to $20,000 in eligible home renovation expenses in 2024 to make their homes more accessible. The Home Accessibility Tax Credit has been doubled, providing a 15% tax credit on eligible costs.

How BOMCAS Canada Can Help with Tax Preparation and Compliance

Preparing for the 2024 tax season can be overwhelming, especially with new changes and regulations. Here’s how BOMCAS Canada can assist both individuals and businesses in Toronto:

1. Personalized Tax Preparation for Individuals
   Whether you’re a salaried employee, self-employed, or retired, BOMCAS Canada offers comprehensive personal tax preparation services to ensure you maximize your deductions and credits. Our team stays updated on the latest tax changes to help you claim all available benefits, including the Climate Action Incentive, Canada Dental Benefit, and First Home Savings Account.
2. Business Tax Planning and Strategy
   For businesses in Toronto, tax planning is crucial to minimize liabilities and stay compliant. BOMCAS Canada offers strategic corporate tax planning, including advice on SR&ED credits, clean technology tax incentives, and small business tax rate reductions. Our tax professionals work with companies of all sizes to implement tax-saving strategies that ensure profitability while staying compliant with federal and provincial regulations.
3. Audit Support and CRA Communication
   If you’re selected for a CRA audit, BOMCAS Canada is here to provide support. Our experts will represent you in all communications with the CRA, ensuring that your audit process is smooth and stress-free. We also help businesses and individuals prepare for audits by ensuring all documentation is accurate and compliant with CRA requirements.
4. Estate and Trust Tax Services
   Planning for the future is critical, and BOMCAS Canada offers specialized estate and trust tax services. Whether you need assistance with the Multigenerational Home Renovation Tax Credit or estate planning to minimize tax burdens on your heirs, we provide expert advice to ensure your financial legacy is protected.
5. Timely and Accurate Filing
   Filing taxes late can result in penalties and interest. BOMCAS Canada guarantees timely and accurate filing of all your tax returns, ensuring you meet CRA deadlines. We offer services for both personal and business clients, ensuring every detail is covered.
6. Assistance for Non-Residents and Expats
   If you’re a non-resident or an expat living in Toronto, navigating the Canadian tax system can be complicated. BOMCAS Canada offers specialized services for non-residents and expats, ensuring that you comply with both Canadian and international tax regulations.

Conclusion

As you prepare for the 2024 tax season, staying informed about the latest tax changes and opportunities for deductions and credits is essential. Whether you’re an individual taxpayer or a business owner in Toronto, the new regulations offer a range of ways to reduce your tax liability and optimize your financial situation. BOMCAS Canada is here to guide you through the process, offering personalized tax preparation, business tax planning, and audit support to ensure that you’re fully compliant with CRA requirements.

Contact BOMCAS Canada today for expert assistance with all your accounting and tax needs, and ensure a stress-free tax season in 2024.