It's crunch time! - April 2023 Tax and Money Tips

Photo by Luis Villasmil on Unsplash

APRIL 2023 TAX AND MONEY TIPS

Last stretch of the 2023 Tax Season! At this point, my turnaround time for existing clients is 2 weeks, assuming you provide me with complete information. This means that I may be able to complete your tax return by May 1st if you provide your completed data by Friday, April 14, 2023.

There seems to be many finance/tax-related news pieces lately. I will mention a few here.
1. By now, many may have heard about a potential Canada Revenue Agency (CRA) union strike. HERE is CRA's official statement about the potential labour disruptions. What it means for you is that there may be delay in processing your tax return (and maybe refund) and longer wait time when you contact the CRA. To check wait times, you can see HERE. Best to call early in the morning.

2. First Home Savings Account (FHSA) is a great new program that is like a combination of Registered Retirement Savings Plan (RRSP) and Tax Free Savings Account (TFSA). A taxpayer may deduct the contribution (just like RRSP), let the money grow tax free (like RRSP and TFSA), and withdrawals are tax-free (like TFSA). Woohoo! Not everyone is eligible, so you must read the requirements. FHSA also has an expiration date. You can read more about FHSA HERE. At the time of writing, there are not many financial institutions offering this program yet. Many will have them available in summer 2023. Those who are US citizens, US residents, or may be considered US persons must be careful with US tax implications if you decide to open an FHSA. Consult cross-border tax specialists; get more than one opinion/advice.

3. This is the first year Underused Housing Tax (UHT) is launched and there have been challenges. On March 27, 2023, CRA published information that "Underused Housing Tax penalties and interest are waived." Here is information from their website:
"The application of penalties and interest under the UHTA for the 2022 calendar year will be waived for any late-filed underused housing tax (UHT) return and for any late-paid UHT payable, provided the return is filed or the UHT is paid by October 31, 2023."
So, it's a temporary relief. Now we can focus only on tax until May 1st or June 15th, haha..... :)

4. By the way, did you know that the minimum wage in BC will increase from $15.65 to $16.75/hour starting June 1, 2023? HERE is the source.


Ok, that's all for now. Here are quick tax tips for you as we are nearing the end of tax season.
1. Have you set up direct deposit yet? If not, go to your online banking and look for direct deposit information, then you can include it when you file your taxes. I can help you if you are using my service.

2. Did you move? Did your marital status change? Do you now have a child in your custody? All these need to be reported to CRA because your situation may affect the benefits that you are receiving, or you may now be eligible for certain benefits. You don't want to be caught off-guard if CRA asks you to pay back benefits you are not entitled to. If you have separated from your spouse or common-law partner, you should have a separate mailing address than your ex; otherwise, it will be very hard to convince CRA that you are now separated.

3. Remember that the general tax deadline is April 30th. However, since April 30, 2023 falls on a Sunday, the deadline is extended to May 1, 2023. If you or your spouse is self-employed, your tax filing deadline is June 15, 2023, but any tax owing should be paid by May 1, 2023 to avoid interest. Sole-proprietors, if you will not be filing your tax returns by May 1st, estimate your income and balance owing and make a payment by May 1st. Ideally, try to make the payment a week before it is due to avoid unexpected problems. If you are a GST registrant, don't forget to pay your GST owing by May 1st as well.


As a reminder, my Tax Preparation service is:
- Full service: You provide your data to me, I do your taxes for you.
- Review service: You prepare your taxes, I review it before you submit your return.
- Tutoring service: I teach you how to do your taxes. This service is not available in March and April.
My fee generally includes 20 minutes of assistance if you are assessed by the CRA, but you must let me know when you need my assistance because I do not monitor your account.

Visit https://PrudentMoneyCoach.com/blog.html or follow me  on LinkedIn, IG, FB, Twitter for more tax and money tips. To subscribe to the monthly tips, send me an email. Hope you have made plans to file your taxes!