Many (if not most) taxpayers think of tax planning as a year-end exercise, one to be carried out in the last few weeks of the year, in order to take the steps needed to minimize the tax bill for that year.
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For the majority of Canadians, the due date for filing of an individual tax return for the 2023 tax year was Tuesday April 30, 2024. (Self-employed Canadians and their spouses have until Monday June 17, 2024 to get that return filed.)
Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.
While our tax laws require Canadian residents to complete and file a T1 tax return form each spring, that return form is never exactly the same from year to year. Some of the changes found in each year’s T1 are the result of the indexing of many aspects of our tax system, as income brackets and tax credit amounts are increased to reflect the rate of inflation during the previous year.
Each year, the Canada Revenue Agency publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. The final statistics for 2023 show that the vast majority of Canadian individual income tax returns – just over 92%, or just under 30 million returns – were filed by electronic means, using one or the other of the CRA’s web-based filing methods. About 2.5 million returns – or just under 8% – were paper-filed.
By mid to late summer, almost every Canadian has filed his or her income tax return for the previous year and has received the Notice of Assessment issued by the Canada Revenue Agency (CRA) with respect to that tax filing. Most taxpayers, therefore, would consider that their annual filing and payment obligations are done and behind them for another year.
Many, if not most, taxpayers think of tax planning as a year-end exercise to be carried out in the last few weeks of the year, with a view to taking the steps needed to minimize the tax bill for the current year.
The vast majority of Canadians view completing and filing their annual tax return as an unwelcome chore, and generally breathe a sigh of relief when it’s done for another year.
There are a number of income sources available to Canadians in retirement.
It is an axiom of tax planning that the best year-end tax planning begins on January 1.