December 19, 2022,

Dear Valued Clients & Friends,

With 2022 coming to an end and as our thoughts turn to the holiday season, it is important to take some time and spend it with our loved ones. It feels like just yesterday when we rang in 2022; and now here we are ready to welcome 2023. With a new year, come new beginnings and an opportunity to reflect and set goals for the year ahead.  As we prepare to close out 2022, it also a reminder that we are just around the corner from the personal tax filing season. Attached, you will find an income tax return checklist to help you prepare your documents for the upcoming tax season. Please do not hesitate to contact us, should you require any assistance.

We would like to express our gratitude for giving us the opportunity to serve you over the years. We thank you for your loyalty and look forward to growing our relationship into the New Year and beyond!

Kindly note that our office will be closed for the holiday season from Friday, December 23, 2022, at 2pm and will reopen on Tuesday, January 3, 2023 at 9am.

On behalf of my family and my staff, I wish you and your family happy holidays and a prosperous New Year!

In our final newsletter of this year, here are the topics that will be reviewed:

1. 2022 Personal Income Taxes
2. CRA Updates & ‘My Accounts’
3. Important CRA Deadlines
4. 2022 Year End Tax Planning Strategies
5. Life Insurance & Estate Planning, Loan applications, Advisory, Tax Planning and Cash Flow Planning

Please connect and follow the links to my social media at your convenience (Facebook, Twitter, LinkedIn, Instagram) to stay fully updated on COVID-19 and tax planning tips for individuals & businesses.

   

We have been working very hard in providing personal tips & accounting, tax, and business content on social media.   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

Sincerely,

Ali Raza Jaffer

 

1. 2022 Personal Income Taxes

Similar to last year, you have the option of sending your files digitally (either via dropbox, google drive, box, or secured email).  Please do not hesitate to contact us should you require any assistance.  I have attached the income tax checklist as a pdf.

You can also access the checklist at the link:   2022 Personal Tax Checklist

 

2. CRA Updates

CRA Provides updates on tax changes, webinars, individual and business deductions, and credits and HST information on a regular basis.  You can access the information with update to date information at the following link:  CRA Updates

A reminder to sign up for your My account (individuals) or My business account (for business owners).  Details can be found at:

Individual Account:   https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html

Business Account:   https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html

 

3. Important CRA Deadlines

Listed below are the upcoming CRA deadlines:

• January 15, 2023 – Deadline to remit source deductions for the 2022 payroll tax year
• February 28, 2023 – T4 & T5 Filing Deadline
• March 1st, 2023 – RRSP Contribution Deadline
• April 30, 2023 – Deadline for filing & payment of taxes owing for 2022 Personal Tax Returns
• April 30,2023 – Deadline for payment of HST payable for Self Employed
• April 30, 2023 – Deadline for payment of taxes owing for Self Employed Individuals
• June 15, 2023 – Deadline for filing Tax Return for Self-Employed Individuals
• June 15, 2023 – Deadline for filing of HST for Self-Employed Individuals

1. 2022 Year End Tax Planning Strategies

As 2022 comes to a close, there is still some time to make some tax planning decisions.  Here are some strategies to consider:

1. Tax Loss Selling

With the calendar year coming to an end, this is a good time to review your investments and look at opportunities to optimize your tax position.  One of these strategies is called Tax Loss Selling.  The strategy involves triggering a loss on a non-registered investment that’s worth less than its original cost.  If an individual has capital gains that could result in taxes payable, a review of all the investments that are losing money could be offset against these gains to reduce taxes payable.

Example: Any excess losses can be applied against losses from the past three tax years or carried forward to be used in future years.  For example, if you have a $10,000 capital gain and realize in December that you have accumulated a loss of $6,000 on another investment, you can sell that second investment to trigger a loss resulting in a net capital gain of $4,000.  Per the tax rules, 50% of that gain is taxable.  One of the conditions of this rule is that the same stock cannot be repurchased for at least 30 days.  The transaction must also be settled before year end.

2. RRSP Contributions 

To reduce your 2022 taxable income, the deadline to contribute to your RRSPs is March 1st, 2023.  The contribution provides a tax deduction against your 2022 income.

3. RESPs:

The deadline to contribute to RESPs is December 31st.   For the annual maximum contribution of $2,500 per child to your RESP, the government will provide a 20% grant.  For those parents with children enrolled in a post-secondary institution who will earn more than $20,000 in 2023 from an entry level role or summer employment, consider making an RESP withdrawal for them before the end of 2022. Any taxable income from the RESP withdrawals (including principle contributions, growth of investments and government grants over the years), will be taxed in 2022 at a lower tax bracket instead of 2023.

4. Charitable Donations

A reminder to make any charitable contributions to a registered Canadian charity to allow for the charitable tax credit prior to the end of 2022.   Any donations made before December 31st can be applied against your 2022 taxable income.

5. Various 2023 Tax Limits

i. Tax-Free Savings Account Contribution Limits

• 2023: $6,500

• 2022: $6,000 (Dec 31st, 2022, deadline to contribute)

ii. Old Age Security Clawback Thresholds

• 2023: $86,912.

• 2022: $81,761

iii. Lifetime Capital Gain Exemption (for Qualified Small Business Shares)

• 2023: $971,190

• 2022: $913,630

6. Life Insurance & Estate Planning, Loan applications, Advisory, Tax Planning and Cash Flow Planning

If you are looking at long term planning strategies, whether you are an individual taxpayer, sole proprietor, or corporate business owner, there are several approaches that we can assist you with.  As part of our commitment and service delivery to our clients, we have been working with our clients on the following to achieve your financial goals:

1)Life Insurance Planning and recommendations to brokers

2)Business Financing which includes

a.$100k BDC working capital loan application

b. Bank loan proposals & applications

c. Lines of credit applications

d. Preparation of business plans and cash flow projections

3) Cash Flow Planning & Budgeting

4) Tax Planning and Corporate Restructuring (Holding companies, Estate Freezes, Trusts)

5) Net Worth Analysis and Planning

6) Strategies to achieve your short term and long-term goals

Please see our website for further details at https://www.arjcpa.ca/business-advisory-services/

Have a safe and happy holiday season!

Best regards,