Financial goals are monetary targets you set or strive to achieve, whether in the short term or an extended period. However, these goals aren’t about spending, saving, and investing only. Your plan won’t be complete if you don’t incorporate tax planning. Tax liabilities can set back your financial goals, while tax savings can improve your financial situation.
April 30, 2024 is the tax filing deadline for the 2023 tax return. It would help taxpayers to plan ahead, know the new tax rules and, more importantly, identify tax benefits that can reduce taxes or deliver tax savings.
Helpful childcare benefits
The Canada Child Benefit (CCB) is a helpful tax benefit that parents must take note of during tax planning and filing. Parents with children under six can receive up to $7,437 per child, while the benefit for each child between 6 and 17 years old is up to $6,275.
First-time home buyer perks
Home buyers in Canada have perks if you don’t know the latest. The First-Time Home Buyers’ Tax Credit (HBTC) or Home Buyers Amount allows home buyers to claim up to $10,000 of the purchase price for a non-refundable tax credit of up to $1,500. Also, the legislation for this tax credit intends to offset ownership costs, partially.
The qualifying home must be the claimant’s principal residence within one year of purchase. Persons with disabilities who are not a first-time home buyer can apply for the HBTC.
Get mileage from your RRSP
Canada’s Registered Retirement Savings Plan (RRSP) is an investment account and tax-savings tool rolled into one. Money growth of RRSP contributions is tax-free and users can claim a tax deduction on the contributions. February 29, 2024 is the RRSP deadline for 2023.
The maximum RRSP contribution limit is 18% of earned income from the previous year or $30,780. RRSP contributions lower taxable income if they are made on or before the deadline.
Furthermore, a tax refund could follow after you file 2023 taxes. However, contributions past the deadline won’t be tax deductible. Any refund will be available after filing the 2024 taxes next year.
RRSP holding
Stocks, specifically dividend stocks, are preferred investments by RRSP investors because they have historically delivered the highest returns in addition to the regular payouts. Emera (TSX:EMA) has a low-risk profile due to its highly regulated electric and natural gas utility assets (seven companies).
The $13.4 billion energy and services company caters to customers and end-users in Canada, the U.S., and three Caribbean countries. If you invest today, the share price is $48.94, the dividend yield is 5.86%, and the payout frequency is quarterly.
According to its President and CEO, Scott Balfour, Emera’s primary focus is to execute a balanced energy transition that drives value for customers and generates reliable returns for shareholders. Now is the best time to invest in this top-tier utility stock. Because of the strength of the business and management’s confidence in the assets, the dividend growth rate target through 2026 is 4% to 5%.
Reduce the anxiety
Every tax season is pressure-filled for taxpayers but early planning can reduce the anxiety. Moreover, it ensures you won’t overlook all the CRA benefits you are eligible to claim in 2024.
