Ateet Kapadia explained major Canadian tax changes coming in 2023

 

We have seen extreme economic instability over the past few years. In COVID-19, Ateet Kapadia explained that a significant inflation rate has already been seen. Following that, there are other adjustments to the tax amounts that have been raised for 2023. He talked about several significant individuals you should be aware of in 2023.

Increased basic personal allowance-

The non-refundable tax credit is available to everybody who pays income tax in Canada. The fundamental justification for this partial decrease is that those who pay taxes and earn more than this baseline amount do so at a reduced rate. The goal is to offer full income tax deductions to those who earn less than a specific threshold. According to the federal budget released in December 2019, it is proposed to alter the Income Tax Act so that the basic personal exemption amount would rise to $15,000 by the year 2023.

Alterations made to first-home savings accounts-

Ateet said that while most people won't be affected by this development, those wishing to purchase a new home for themselves will. As with the initial home savings account, a deduction of up to $40,000 will be allowed up to almost $8000 per year starting in 2023. This impacts people starting in 2023 and will also have an impact on those who are constructing homes for the first time.

Modifications to the Luxury Vehicle Tax-

As to recent regulations, starting in September 2022, cars costing more than $100,000 will be subject to a tax equal to 10% of that item's worth. However, if the person buying a used car, they would often not have to pay the luxury tax, even if the cost was over $100,000.

The dollar cap for Registered Retirement Savings Plans has risen-

According to Ateet Kapadia, the yearly RRSP ceiling, which was around $27,800 in 2021, has now raised to $29,210. According to the regulations, everyone older than 17 years old is eligible for the RRSP deduction restrictions. In addition, if your contributions are beyond your $2,000 RRSP deduction limit, you must pay an additional 1% monthly tax.

Rules for trust reporting-

When someone does an estate freeze, Ateet explained. A legal strategy called an "estate freeze" is used to lock the current worth of a capital asset for one person so that any future appreciation will benefit someone else. This is typically done to lower any unpaid estate taxes. Since 2021, trusts will no longer be exempt from filing returns if there is no tax due and no distribution of assets has been made by the trust. Every trust will have to submit a return starting with the 2023 tax year.

The OAS limit amounts have changed-

The purpose of the OAS is to provide retirees with a source of income, but if their income exceeds the federally imposed limit, their benefits may be decreased or even terminated depending on the information the Canada Revenue Agency has access to (CRA).

Conclusion-

The CRA is in charge of ensuring that everyone files their taxes in accordance with the law. If you are employed in Canada, paying taxes is a given. Taxes for self-employed people operate differently from taxes for people with regular jobs. A non-resident of Canada will file taxes in a different way than a Canadian resident. You can file your taxes appropriately using internet tax applications, or if your circumstances are difficult, you could think about employing a professional in Canada for guidance and tips to keep informed regarding tax flow in Canada. 

 

Ateet Kapadia Shared Essential Tax 2023 Tips for Entrepreneurs

Every fledgling businessperson must at some point deal with taxes, which initially causes them confusion and difficulty. According to Ateet Kapadia, it frequently causes headaches for newcomers since they have to go through several formalities throughout tax season. In order for beginning entrepreneurs to understand the scenario and maintain track of the circumstances while also saving time and money on taxes, Ateet Kapadia elaborates on some tax suggestions based on his experience.

Keep track of your expenses-

According to Ateet Kapadia, keeping track of all of your documents would make it simpler for you to navigate and comprehend any circumstance with precise reports. Not only does it save you time, but it also keeps you out of danger. For instance, if you run a business or offer any kind of service. Your services or businesses are often operated by staff. Typically, you have everyday costs. If you don't keep a record and have a daily expense. You definitely have problems. You have to pay higher taxes since your costs are not exact and are calculated based on theories or assumptions. Having daily accurate records that are kept up might easily prevent these situations.

Make payment through cheques-

As a business owner, Ateet Kapadia said that using cheques is always a smart idea. As a company owner, paying with a check rather than cash will always save you taxes. Since you frequently face the danger of running out of receipts when you make everyday payments. Since you often avoid running out of perks when paying with cash, Additionally, if you use checks, you can provide the government with a proper record of payment deductions. You may still save taxes if you don't have a receipt since you have your chequebook to show the government your records.

Hire a family member to work for you-

Ateet Kapadia enlightens that you may increase the advantages by saving money on taxes if you have family members who can assist with duties crucial to your business, such as a youngster who can assist mow lawns as part of your lawn service.

Hiring a family member allows you to minimize your taxable income by taking a business deduction for the reasonable compensation you gave that person, which may also allow you to avoid paying taxes on that income.

Getting a business vehicle for getting benefits-

It is usually preferable to purchase a car for use in regular company operations. He explained that an asset is shown in your worksheet when you buy a car, you gain from this. You can obtain a deprecation on it thanks to this. This helps your business run better while simultaneously reducing your tax liability.

Ateet Kapadia also answer some question for beginner entrepreneurs-

Q. What are the more benefits of hiring a family member?

A. He explained that hiring family members might result in significant tax savings. They could earn compensation on par with what other workers receive. If the hired family members don't have any other means of support, the company will pay them. As a consequence, they won't be obligated to pay taxes. Since the salaries paid to the workers represent a cost to the company, they can be subtracted from its taxable income, reducing the overall tax burden.

Q. How do limits on making the cash payment help in taxes?

A. He described that setting a cap on payments made in cash is always a smart idea. Since income tax forbids expenditure deductions when cash payments exceed the cap amount. If possible, divide payments over a few days if there is just cash available for payment.

Conclusion-

This straightforward advice might be quickly used in your day-to-day business operations. Because it will save entrepreneurs a great deal of time and prevent problems. In order to reduce your tax liability and maximize your tax deductions, it is thus wise to keep these ideas in mind that Ateet Kapadia mentioned.