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Ali Raza Jaffer, Chartered Accountant Mississauga, Greater Toronto Area

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March 1, 2026

Dear Valued Clients & Friends,

As the days get longer and the weather finally starts to warm up, many of us begin thinking about spring cleaning including clearing out clutter, getting organized, and starting fresh. Tax season is no different. A little preparation now can make the process smoother, reduce stress, and even uncover planning opportunities you may not have considered. Think of this as your annual financial reset; a chance to tidy up your records and ensure everything is working efficiently for the year ahead.  Whether you’re an individual, incorporated professional, or business owner, early preparation ensures fewer surprises and better results.

With new compliance updates and continued CRA scrutiny, this year is about being organized, strategic, and ahead of deadlines.  We have seen many global changes over the past few months including declining global economies, uncertainty on interest rates, stock market volatility, US tariffs, real estate market decreases, and global political tensions.  We are here to guide and serve you to navigate these changes as it applies to your financial and tax situation.  As the tax filing deadlines are approaching, now is the time to get organized and ensure a smooth tax process.  At AR Jaffer Professional Corporation, we are committed to supporting you through every season, and we look forward to assisting you in the months ahead.

To assist with your income tax preparation, we’ve attached an income tax return checklist to help you prepare your documents.  We also provide recent CRA My account changes, continued supporting of our advisory and CFO Fractional Services and Tax planning strategies and changes for 2025 & 2026.  I also discuss Rental Cash Damming as a CRA approved tax planning strategy in our Advisory section & Fractional CFO Services section.

In our first edition of our newsletter for 2025, here are the topics that will be reviewed:

  1. CRA Account Updates
  2. 2025 Tax Documents Preparation
  3. Value Added Advisory & Fractional CFO Services
  4. 2025 Key Tax Changes
  5. Tax Planning Strategies
  6. Important Dates
  7. Stay Connected!

 

If you would like to book a meeting with me please click on the following:  Book time with Ali Raza Jaffer, CPA: Exploratory Accounting & Tax Call

If you have missed any editions of the newsletter, please click on the following link:  AR Jaffer PC Newsletter Archives

We have been working very hard in providing personal tips & accounting, tax, and business content on social media. Please connect and follow the links to my social media at your convenience (Facebook, Twitter, LinkedIn, Instagram) to stay fully updated on CRA Updates and tax planning tips for individuals & businesses.

As a reminder, if you get an opportunity, please also provide a Google Review available at the following link:

AR Jaffer Professional Corporation Chartered Professional Account Google Review

 

Warm Regards,

Ali Raza Jaffer, CPA

  

 

1) CRA My Account update

CRA has modified accessing the CRA Account portal.  If you are locked out of your CRA account or forgot your sign-in information, you can now regain access online – no need to call the CRA. Use the CRA’s new self-service option to create new sign-in credentials and quickly get back into your account.

 

To regain access:

  1. Go to Sign in to your CRA Account
  2. Under “Help,” select “Your account is locked”
  3. Follow the on-screen steps

 

Authorizing a representative:

Online services are designed to make CRA service delivery faster, easier, and more secure for you and your representative. To authorize a representative instantly and with ease, sign in to or register for a CRA account.  As of July 15, 2025, the Authorize a Representative function in EFILE software for individuals is no longer available. This means that your representative can no longer use EFILE to request access to your account. Instead, your representative must use Represent a Client to request online access to your account. The access will be activated as soon as you confirm it within your CRA account.

For taxpayers who cannot access their CRA account, the CRA has also enhanced the Represent a Client portal by removing the previous five-day processing delay for the alternative process. Now, your representative can get instant access to your account using the Alternative process for individuals. To do this, you need to make sure your representative has the necessary tax documents ready for authorizing a representative through the CRA.

 

To get instant access, your representative must:

  • submit the authorization using the Authorization Request service in Represent a Client
  • provide specific tax information from your notice of assessment that was issued at least six months ago

Note

Only the representative requesting authorization (or a person registered with the same GroupID or business number (BN) in Represent a Client) can submit a request.

For more information, see Representative authorization

 

 

2) 2025 Tax Documents Preparation

With the April 30th income tax filing deadline fast approaching, here are some key documents to include in your tax package to help optimize your tax position:

  • Income slips (T4, T4A, T3, T5)
  • RRSP contribution slips
  • Employment expenses (T2200 form required)
  • Investment-related expenses (management fees for non-registered accounts, interest paid on investments)
  • Donation receipts
  • Medical receipts (for expenses not covered by a benefits plan)
  • Childcare expenses
  • Tuition slips (T2202A)
  • Professional & union dues
  • Disability support expenses
  • Foreign investments & property (if valued over $100,000 for T1135 reporting)
  • Self-employed, small business, or partnership records:
    • Profit & loss statement and balance sheet
    • GST/HST records
    • Asset/capital purchase receipts
    • Payroll records
  • Rental property details: Income, expenses (including mortgage interest, property taxes, utilities/condo fees, and insurance)
  • Sale of properties: Lawyer’s closing documents, purchase and sale agreements

 

For your convenience, we have attached a tax checklist to assist you with compiling your documents.

 

How to Submit Your Tax Documents:

  1. Secure Digital Submission:
  1. Physical Drop-Off or Courier:
    • If digital submission isn’t possible, you may drop off or courier your documents to our office.

Filing before April 30th is crucial to avoid penalties and interest, even if some documents are missing—we can always amend your return later if needed.

If you have any questions or would like to schedule a meeting, please contact us via phone, email, or video conferencing.

We appreciate your trust in our services and look forward to assisting you!

 

Gentle Reminder on our Process:

  1. Ensure our office receives your tax return by April 10, 2026, in order to file by April 30, 2026
  2. We will prepare tax returns on first in basis.
  3. We require a signed T183 for us to EFILE your return

 

 

3) Value Added Advisory & Fractional Services

 As you may be aware, beyond tax compliance and annual personal and corporate tax filings, our role is to serve as proactive advisors focused on helping you build, protect, and optimize your financial position. Whether you are an individual planning for long-term wealth or a business owner navigating growth and complexity, strategic insight makes a measurable difference. Through Advisory, Planning, and Fractional CFO Services, we provide forward-looking guidance designed to improve cash flow, reduce risk, enhance profitability, and support smarter decision-making. Our goal is not just to report on the numbers — but to help you use them as a tool to create clarity, confidence, and long-term financial success.

 

Value Added Advisory & Fractional Services for Individuals and Families

 

Value Added Advisory & Fractional Services for Small to Mid size Business Owners

  • Fractional CFO leadership and strategic financial oversight
  • Supporting the accounting department and bookkeeper
  • Cash flow forecasting and working capital management
  • Budgeting and financial modelling
  • KPI dashboards and performance reporting
  • Tax planning and compensation optimization
  • Corporate structure and reorganization planning
  • Succession and exit strategy advisory
  • Financing support and lender negotiations
  • Profitability analysis and margin improvement
  • Internal controls and process optimization

 

 

4) 2025 Key Tax Changes

AR Jaffer Professional Corporation is committed to filing returns on time. To ensure timely filing, please submit your completed checklist and 2025 tax information by April 10, 2026.

Here are the key changes for individuals for 2025:

2025 Tax Updates (Key Highlights):

  • Federal tax rate reduction: Lowest rate reduced to 14% effective July 1, 2025 (blended 14.5% for 2025).
  • Canada Disability Benefit: Up to $2,400 annually for eligible individuals aged 18–64 approved for the Disability Tax Credit.
  • Digital News Credit: Discontinued for 2025 onward.
  • Underused Housing Tax (UHT): Eliminated for 2025 and later (prior-year compliance still required).
  • Capital gains: Inclusion rate remains at 50%; proposed increases were not enacted.
  • Automobile limits: 2025 mileage rate increased to $0.72 (first 5,000 km) and $0.66 thereafter; CCA and lease limits updated.
  • AMT changes: Rate increased to 20.5% with expanded income base.
  • CPP2: Additional contributions apply on earnings between YMPE and YAMPE.

 

Ongoing & Prior-Year Reminders:

  • Principal residence sales must be reported to claim the exemption (penalties may apply for failure to do so).
  • Foreign property reporting (T1135) required if total cost exceeds $100,000.
  • Residential flipping rule: Properties sold within 12 months generally taxed as business income (with limited exceptions).
  • FHSA: $8,000 annual ($40,000 lifetime) contribution room.
  • Home Buyers’ Plan: RRSP withdrawal limit increased to $60,000 (from $35,000)
  • LCGE (Lifetime Capital Gains Exemption): Increased to $1.25 million (indexed starting 2026).
  • First Time Home Buyer’s Credit of $10,000 for a tax savings up to $1,500

 

Automobile Income Tax Deduction Limits

  1. Employers may reimburse employees who use their personal vehicles for business purposes at the following prescribed rates:

 

Year First 5,000 km Each Additional km
2025 $0.72 $0.66
2026 $0.73 $0.67

 

  1. Capital Cost Allowance (CCA) Limits (Before Tax)
  2. The maximum depreciable cost for vehicles acquired during the year is as follows:

 

Year Class 10.1 Passenger Vehicles Class 54 Zero-Emission Vehicles
2025 $38,000 $61,000
2026 $39,000 $61,000

 

4. The maximum deductible automobile leasing expense increased to $1,100 per month (before tax) in 2025 and will remain unchanged for 2026.

 

Personal Tax Rates – Ontario (Combined Federal & Provincial).  Details available at CRA Rates

 

2025:

Taxable Income Capital Gains Interest & Other Income Eligible Dividends Non-Eligible Dividends
$220,000 – $253,414 24.92% 49.85% 34.25% 43.50%
Over $246,752 26.76% 53.53% 39.34% 47.74%

 

2026:

Taxable Income Capital Gains Interest & Other Income Eligible Dividends Non-Eligible Dividends
$220,000 – $258,482 24.92% 49.84% 34.25% 43.50%
Over $258,482 26.76% 53.53% 39.34% 47.74%

 

5. Late filing penalties can occur, so we strongly encourage you to file and pay on time:

    1. 5% of the balance owing, plus 1% per month (up to 12 months).
    2. Late payments incur daily compounded interest (7% as of February 2026).
    3. If you received a late-filing penalty for 2022–2024 your 2025 penalty increases to 10% plus 2% per month (up to 20 months).

 

 

5) Tax Planning Strategies

Here are my Top 10 Tax Strategies for tax season!

1. Employment Income (T4 & Related Slips)

 

Documents to Provide:

  • T4 slips (employment income)
  • T4A (contract or other income)
  • T2200 (if claiming employment expenses)
  • Work-from-home expense details

Planning Strategies:

  • Review eligibility for home office claims
  • Track unreimbursed employment expenses
  • Consider adjusting payroll withholdings if you owed tax last year
  • Review stock option exercises for tax timing

 

2. Self-Employment Income

 

Documents to Provide:

  • Income summary by client
  • Expense breakdown (advertising, meals, auto, supplies, etc.)
  • Home office calculation
  • Vehicle logbook (business vs personal km)

Planning Strategies:

  • Ensure expenses are properly categorized
  • Consider timing of income/expenses before year-end
  • Evaluate installment requirements
  • Assess whether incorporation makes sense

 

3. Investment Income

Documents to Provide:

  • T5 (interest/dividends)
  • T3 (trust income)
  • Capital gain/loss reports
  • Foreign income statements
  • Crypto trading summaries

Planning Strategies:

  • Offset capital gains with capital losses
  • Review tax-loss harvesting opportunities
  • Consider asset location strategy (RRSP vs TFSA vs non-registered)
  • Monitor foreign reporting requirements (T1135 if applicable)

 

4. Rental Income

Documents to Provide:

  • Rental income summary
  • Mortgage interest statement
  • Property tax bills
  • Insurance and repair expenses

Planning Strategies:

  • Differentiate repairs vs capital improvements
  • Plan major renovations strategically
  • Consider CCA carefully (future recapture implications)
  • Review ownership structure if multiple owners
  • Cash Damming Strategies

 

5. RRSP & TFSA Contributions

Documents to Provide:

  • RRSP contribution receipts (including first 60 days)
  • Unused contribution room (last NOA)

Planning Strategies:

  • Optimize RRSP contributions based on marginal tax rate
  • Consider spousal RRSPs for income splitting
  • Evaluate TFSA withdrawals/recontributions timing
  • Avoid overcontribution penalties

 

6. Family & Life Changes

Notify Us If:

  • Married, separated, or divorced
  • Had a child
  • Purchased or sold a home
  • Moved provinces
  • Became a new Canadian resident

Planning Strategies:

  • Review child benefits & credits
  • Plan principal residence exemption properly
  • Coordinate spousal income for optimal tax results
  • Reassess beneficiary designations

 

7. Medical & Charitable Donations

Documents to Provide:

  • Medical receipts
  • Insurance reimbursements
  • Donation receipts

Planning Strategies:

  • Combine family medical expenses for best threshold result
  • Time donations strategically (carry forward up to 5 years)
  • Consider donating appreciated securities for tax efficiency

 

8. Education & Students

Documents to Provide:

  • T2202 (tuition)
  • Student loan interest
  • RESP contribution details

Planning Strategies:

  • Transfer unused tuition strategically to parents
  • Plan RESP withdrawals tax-efficiently
  • Carry forward unused tuition credits properly

 

9. Home Ownership & Real Estate

Documents to Provide:

  • Purchase/sale agreements
  • Legal fees
  • Improvement costs

Planning Strategies:

  • Report all principal residence sales (mandatory)
  • Track adjusted cost base accurately
  • Consider tax implications before converting property to rental
  • Plan for capital gains inclusion rules

 

10. Other Important Items

  • Moving expenses
  • Support payments (paid/received)
  • Disability tax credit documentation
  • Installment notices from CRA
  • Last year’s Notice of Assessment

 

Common CRA Review Areas:

 

CRA scrutiny is increasing in the following,  Documentation is critical.

  • Home office claims
  • Automobile expenses
  • Rental losses
  • Large medical claims
  • Foreign assets reporting

 

Proactive Tax Planning Reminders:

  • Submit documents early (before April 10)
  • Schedule planning calls if income changed significantly
  • Review installment obligations
  • Discuss major 2026 transactions before executing

 

Strategic Questions to Ask:

  • Did my income increase significantly this year?
  • Did I sell investments or property?
  • Am I maximizing tax-sheltered accounts?
  • Do I expect to owe tax this year?
  • Has my family situation changed?

 

 

6) Important Dates

Listed below are the upcoming CRA deadlines:

  • March 2, 2026 – Deadline for filing of T4 and T5 slips.
  • Mar 2, 2026 – RRSP contribution deadline
  • April 30, 2026 – Deadline for filing & payment of taxes owing for 2025 Personal Tax Returns
  • April 30,2026 – Deadline for payment of 2025 HST payable for Self Employed
  • April 30, 2026 – Deadline for payment of 2025 taxes owing for Self Employed Individuals
  • June 15, 2026 – Deadline for filing 2025 Tax Return for Self-Employed Individuals
  • June 15, 2026 – Deadline for 2025 filing of HST return for Self-Employed Individuals