Wealth Strategies: Tax Season 2025 - Key Updates and Tips for Canadian Taxpayers

As the 2025 tax season kicks off on February 24, Canadian taxpayers should be aware of several important changes and deadlines for filing their 2024 tax returns. This blog post highlights the crucial information taxpayers need to know to navigate this year's tax season efficiently. 

Filing Deadlines and Methods 

The Canada Revenue Agency (CRA) has set April 30, 2025, as the deadline for most individuals to file their tax returns and pay any taxes owed. Self-employed individuals have until June 16, 2025, to file, though they must still pay any taxes due by April 30 to avoid interest charges. Notably, those reporting capital gains from 2024 have been granted an extension until June 2, 2025, due to complications arising from changes in capital gains reporting. 

The CRA strongly encourages electronic filing, which, combined with direct deposit, can result in refunds being processed in as little as eight business days. In contrast, paper returns may take up to eight weeks to process. 

New Tax Considerations for 2024 

Several significant changes affect 2024 tax returns: 

1. Alternative Minimum Tax (AMT): A new AMT system applies to taxpayers with taxable income exceeding $173,205 in 2024. This may impact those claiming large deductions or credits to reduce the tax that they owe to very low levels. Under the AMT system, there is a parallel tax calculation that allows fewer deductions, exemptions, and credits than under the regular income tax calculation. 
2. CPP and QPP Enhancement: Additional contributions of four per cent are now required on earnings in 2024 between $68,500 and $73,200. For self-employment income and other earnings, the rate for second additional contributions is eight per cent. 
3. Short-Term Rentals: Expenses for non-compliant short-term rentals (less than 90 consecutive days) can no longer be deducted. 
4. Capital Gains Reporting: Despite the deferral of inclusion rate changes to 2026, taxpayers must still report gains or losses separately for periods before and after June 25, 2024. The CRA noted that while the inclusion rate increase was deferred until 2026, it is keeping the Period 1 and Period 2 reporting on the T1 return “to ensure consistency with the tax slips that have already been published, those currently being issued to taxpayers and those filed with the CRA.” 
5. Donation Deadline: The federal government announced an extension of the 2024 charitable donation deadline until Feb. 28, which is meant to mitigate the impact of the postal strike. Only donations made in the form of cash or cheque, credit card, money order or electronic payment qualify for the extension. 

 

CRA Service Improvements 

The CRA has introduced new digital services to enhance the filing experience: 

• A document verification service for immediate CRA account access 
• An online chat service in CRA My Account for personalized assistance

 

Source: Financial Post  

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