What Albertans Should Know About the 2024 Tax Changes and How it Will Impact You

It's time to submit your 2023 tax return before the deadline on April 30, 2024. This time of year often highlights the benefits of proactive tax planning, which can alleviate stress come April. It's not too late to start preparing for the 2024 tax year, as the Canada Revenue Agency (CRA) regularly adjusts requirements for reporting, tax bracket rates, and income thresholds. Occasionally, new tax laws are introduced mid-year, affecting income earned from January 1.

 

Here are the key tax changes for 2024:

 

Changes to Canadian Payroll Deductions:

The CRA has raised income thresholds and contribution rates for CPP and EI, affecting disposable income and future benefits.

 

Canada Pension Plan (CPP): 

The maximum pensionable earnings for CPP have increased to $68,500, with an additional 4% contribution for incomes between $68,500 and $73,200.

 

Employment Insurance (EI):

The insurance rate and maximum annual insurable earnings have increased, resulting in higher EI premium deductions.

 

All other deductions have been adjusted for inflation, along with increased income thresholds for federal tax rates.

 

Higher Taxes Impacting 2024 Expenses:

Certain goods and services are subject to increased taxes, potentially leading to higher prices passed on to consumers.

 

Carbon Tax: 

Effective April 1, 2024, carbon taxes will rise, affecting fuel prices.

 

Alcohol Tax:

On the same date, there will be a 4.7% increase in excise tax on alcoholic beverages.

 

Digital Services Tax (DST): 

A new 3% DST targets large online companies, likely leading to slightly increased service costs.

 

Changes in Reporting Requirements for Bare Trusts:

Bare trusts, previously exempt from filing returns, now require T3 tax returns and Schedule 15 disclosure for the 2023 tax year.

 

Proposed Changes to Tax Laws for 2024:

Various amendments are under discussion, potentially affecting income earned from January 1, 2024, onward.

 

Intergenerational Business Transfers:

New conditions might impact business transfers to children or employees.

 

Alternative Minimum Tax (AMT):

There's a proposed increase in the AMT rate and scope of included items.

 

Tax Deductions on Non-Compliant Short-Term Rentals:

The proposed law could eliminate certain expense deductions for non-compliant properties.

 

Tax laws are intricate and subject to change. Professional tax consultants can help navigate these complexities and plan accordingly.

 

For expert tax planning services, contact Dymas Services Ltd. in Southern Alberta. We are equipped to guide you through these changes and optimize your tax strategies. Reach out to us via the provided contact information.