Hello everyone!

A quick note:
If you are my client and you have provided me with your document, please allow 2-3 weeks processing time. Don't forget to fill out the 2025 CHECKLIST. Please make a copy or download a copy since the file is shared with others. Then fill out the “TS2025” tab and other tabs that are applicable to your situation. Send it to me when you are finished.

We are in the midst of a super busy and an unusual tax season with so many (last-minute) tax updates and political changes that affect our tax rules; from capital gains inclusion rate issue that went into effect on June 25, 2024 but never became law and is now deferred to January 1, 2026; donation deadline extension to February 28, 2025 for 2024 tax return; information return (such as T4 slips) extension from February 28, 2025 to March 7, 2025; to a relief period up to May 1, 2025 for T3 slips. Oh, and our tax deadline is still April 30, 2025. 😰

A lot of people have not received all their tax slips yet and many slips are not posted on Canada Revenue Agency's (CRA) website yet, so I have to manually enter many receipts. Please provide me with all your tax slips and update me on your tax situation for 2024 tax returns. If your tax return has been e-filed and you receive a tax slip afterwards, please inform me so I can ReFile (re-submit) your tax return.

Anyhow, for this newsletter, I thought I’d share with you questions I have received and answers I provide. I will also include questions I have read on social media. Note that this is general information only. Please consult your own tax advisor for any questions pertaining to your specific tax situation.

• Q: I forgot to claim my RRSP contribution for a few years. Is it still possible to claim them? What is the deadline?

          A: Yes, you can still claim any past RRSP contributions you made that you forgot to claim in your tax returns. You can change your return (do an adjustment) for the last 10 years of your tax return. For example, we are currently in the year of 2025. You can change your 2015 - 2024 tax returns. 
Bonus: If you find an old receipt (let’s say it’s a medical expense receipt) that you forgot to claim, you can also file an adjustment or claim it in the current year if the  medical expense incurred within 24 months of the tax year. For example, for the 2024 tax return, you can claim medical expenses from Jan 1 to Dec 31, 2024, or Jan 2, 2023 to Jan 1, 2024.

• Q: Oh dear .....! I forgot to include my January-February 2024 RRSP contribution in my 2023 tax return. Should I just add them in my 2024 tax return?

          A: No. January-February RRSP contributions belong to the previous year’s tax return. So this means that you DO NOT add the Jan-Feb 2024 RRSP contributions to your 2024 tax return, but rather, you need to ADJUST your 2023 tax return. That is the ONLY way to claim the Jan-Feb 2024 RRSP contributions.
Note: This was a question posted in a Facebook group. There were many individuals who answered “Yes, of course!” 😧

• Q: Times are tough. My salary is not enough for the expensive Vancouver cost of living. I started a side hustle. I don’t make much money. I don’t need to report my income, correct?

          A: No; that is incorrect. Canadian tax system is self-assessed. This means, Canada Revenue Agency (CRA) relies on individuals to honestly report their income and claim deductions/credits/expenses. Canadian tax system requires Canadian residents (Canadian resident as in tax status, not immigration status) to report their worldwide income. There is no minimum limit of income to be reported. This means that any income needs to be reported. Remember that CRA allows personal tax credit. Remember that at least the first $10,000 you earn will not be taxed federally or provincially. Actual tax credit you can claim may be higher depending on your tax situation.

• Q: When I sell my property, do I pay tax on the entire sale price or the difference between the sale price and my purchase price?

          A: Capital gains is calculated as the difference between your sale price and your purchase price. ½ of the capital gains is taxable. There is a proposed change to make ⅔ of the capital gains taxable for amounts above $250,000, but the start date has been pushed to January 1, 2026. 
Note that if you are a newcomer to Canada and your property is outside of Canada, capital gains will be calculated as the difference between the sale price and the fair market value of your property at the time you entered Canada. This often benefits taxpayers as the fair market value is usually higher than the purchase price. Further, if you pay tax on the capital gains in the country where the property is located, you may be able to claim foreign tax credit if there is a tax treaty between Canada and the other country. This will avoid double taxation.


Is taxes overwhelming for you? If so, let someone else do your taxes. (Pick me. 😁) During this tax crunch time, I have decided to list my prices on my website to improve efficiency. 

For more tax tips in between my bi-monthly newsletters, follow my social media accounts on YouTube, Instagram, Facebook, LinkedIn, or X . That's all for now. See you in June.


Sources:
How to change your return
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/change-your-return.html

Capital Gains Inclusion Rate
https://www.canada.ca/en/department-finance/news/2024/06/capital-gains-inclusion-rate.html

Update on the Canada Revenue Agency's administration of the proposed capital gains taxation changes
https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/update-cra-administration-proposed-capital-gains-taxation-changes.html

What is the reporting requirement for new immigrants? How is the cost amount determined for property that was owned at the time of immigration to Canada?
An individual does not have to file Form T1135 for the tax year in which he or she first became resident in Canada. For a new resident, the cost amount of foreign property is its fair market value at the time he or she first became resident in Canada. Use this fair market value in determining the new resident's Form T1135 filing requirement in future years.
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/questions-answers-about-form-t1135.html

Tax treaties
https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties.html

Update on the filing of information returns
https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/update-filing-information-returns.html