Personal Tax Returns
What information will Ritchie Shortt & Tully LLP require to prepare my personal tax returns?
We send our clients the following letter and attachments. If you have misplaced your copy or have just become a client of Ritchie Shortt & Tully LLP, a copy of the letter and attachment is available here: T1 Mailing Letter 2023 and Personal Income Tax Questionnaire 2023. These are required for your personal tax return.
If you require us to report your business or professional activities please use our Business and Professional Activities Worksheet 2023. You can print it out and fill it in. Additional information (T2125) in Part 2 of Form T2125 must be reported in 2023 if you earn income from your webpages or websites. You must also report the exact or estimated percentage of income generated from the Internet. Please see the details here: T1 Internet-Business-Activities. If you require us to report your rental income, please complete the rental summary: Real Estate Rental Worksheet 2023. You may also find some of our excel worksheets helpful in summarizing your information. These can be found in Calculation Tools under the Resources section of the website.
We will also need to know if you owned specified foreign property in excess of $100,000 CDN. Form T1135, is the Foreign Income Verification Statement that must be filed. The CRA has implemented changes to Form T1135 for the 2015 and subsequent tax years. The changes will allow taxpayers, who held specified foreign property with a total cost amount of less than $250,000, throughout the year, to report under a new simplified reporting method rather than providing the detail of each such property. The current detailed reporting method will continue to apply to those taxpayers who, at any time during a year, held specified foreign property with a total cost of $250,000 or more. More information on foreign income verification.
To help you determine if you need to disclose your foreign holdings, please refer to pages 4 to 6 of the form to review the types of specified foreign property that must be included.
Work Space in the Home Expenses – Detailed method is your only option now
If you worked from home in 2023, in limited cases, you may be able to make a claim based on actual expenses incurred, pro-rated for business use. (NOTE: The temporary flat rate method whereby employees could deduct $2/day that they worked from home in 2022 is not available in 2023.)
To claim a deduction for your expenses related to working from home, one of the following criteria has to be met:
- the home was where you mainly (more than 50% of the time) did your work for a period of at least four consecutive weeks in the year, or
- you used the space exclusively to earn business/employment income, and used it on a regular and ongoing basis for meeting clients, customers or other people in respect of the business/employment.
Examples for different work arrangements. Click here
Declaration of conditions of Employment: Click here
In addition, if you are making a claim by virtue of employment, your employer should provide you with a signed T2200.
Direct Deposit
Canada Revenue Agency will soon stop mailing tax refunds and other benefits. We urge you to set up direct deposit at this time. This can be done online through “My Account” (if you are registered), by phone (call 1-800-959-8281) or at your financial institution. More information is available on CRAs website (Form).
Canada Caregiver Amount
The Canada Caregiver Amount has replaced the Family Caregiver Amount. You could be entitled to claim the Canada Caregiver Amount in the calculation of certain non-refundable tax credits if the person you are making the claim for has an impairment in physical or mental functions. There is a $2,499 tax credit available to caregivers of infirm relatives including spouses, common-law partners and minor children. Find out more on Caregiver Credits.
Tuition, Education and Textbook Amounts
For 2023 federal tax purposes, the tuition credit is available; however, the education and textbook credit is no longer available. For Ontario tax purposes, the tuition and education and textbook credits are no longer available.
Ontario Staycation Tax Credit
The Ontario staycation tax credit is no longer available for the 2023 and later tax years. This was only temporarily available for the 2022 tax year.
Disposition of residential property owned for less than 365 days
Effective January 1, 2023, all gains arising from the disposition of residential property (including rental property and assignment sales) owned for less than 365 days are deemed to be business income (and not capital gains) unless a particular exception is met. Some of the exceptions include the following reasons for disposition: due to a death, separation, birth, safety issue, illness/disability, employment change, insolvency or involuntary disposition. More information on property flipping. For a detailed listing of exceptions click here
Reporting the sale of your principal residence for individuals (other than trusts)
When you sell your principal residence or when you are considered to have sold it, you must report the sale on your income tax and benefit return. Generally, you do not have to pay tax on any gain from the sale. This is the case if you are eligible for the full income tax exemption (principal residence exemption) because the property was your principal residence for every year you owned it.
You will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption. More information on the sale of principal residence.
Please note that if you own more than one property in any year (say your house and a cottage), then you can designate only one of those properties as your principal residence in any particular year. You may want to consult with us to ensure that you are making the optimum choice in claiming the principal residence exemption.
Multigenerational Home Renovation Tax Credit
For the 2023 and subsequent taxation years, Budget 2022 introduced the Multigenerational Home Renovation Tax Credit (MHRTC), a refundable credit to assist with the cost of renovating an eligible dwelling to establish a secondary unit that enables a qualifying individual (a senior or an adult who is eligible for the disability tax credit) to live with a qualifying relation. The credit is available for qualifying expenditures made or incurred after December 31, 2022, for services performed or goods acquired after that date. More information on claiming the Mutigenerational Home Renovation Tax Credit.
