** The deadline to contribute to an RRSP this year is February 29, 2024 **

An RRSP is one of the best ways to save for retirement and a contribution may reduce your taxable income.

We offer you 2 easy ways to contribute to an existing RRSP:
1. EFT (Electronic Fund Transfer) from your bank account. You can call us at 905-827-8066, or send an e-mail to Tony Maduri at tony@madurifinancialgroup.com or Adam Maduri at adam@madurifinancialgroup.com
2. Online banking contributions. Please call us for instructions.

To open a RRSP:
Give us a call at Maduri Financial Group – 905-827-8066 and we would be more than happy to help you set up an appointment to open a RRSP account before midnight on Thursday, February 29, 2024. All contributions made or received in our office by midnight February 29, 2024 are eligible for a 2023 tax receipt.

TFSA limit: Contribution room limit for 2024 has been increased by $7,000, for a total maximum contribution of $95,000.

First Time Home Buyer Program:
The FHSA is a Registered Savings Plan that gives potential first-time homebuyers the ability to save up to $40,000 ($8,000 per annum) towards their home purchase without accruing tax. Similar to a Registered Retirement Savings Plan (RRSP), contributions to a FHSA are tax-deductible on your income tax return for the tax year you make them in.

Mortgages:
Canadian borrowers have faced a sharp rise in interest rates in 2023. We might be in the final stages of higher rates right now. If your Mortgage is coming due in the near future, please give us a call to discuss your options.

Our firm has made the decision to expand our partnership, so that we can offer you a wider selection of Mortgage plans and options. We have partnered with Paul Wade at Champion Mortgage powered by Axiom Mortgage Solutions to help us with your Mortgage needs. Paul has accessibility to numerous mortgage companies. We can help with a new purchase, refinancing options or mortgage renewals and can offer up to a 120-day rate guarantee.

Home Expenses:
Clients who continued to work from home voluntarily last year will be able to claim home office expenses again for 2023. However, the process will be more complicated this time around. The CRA clarified its approach to working from home in 2023, which involves an updated T2200 Form that employers will need to sign as part of the “detailed method” for claiming expenses.
The temporary “flat rate” method, which allowed Canadians working from home due to Covid to claim up to $400 in employment expenses in 2020 and up to $500 in 2021 and 2022, is not available for 2023.
Reporting the Sale of your Principal Residence:
Since the 2016 tax year, you are required to report basic information (address, date of acquisition, proceeds of disposition, etc.) on your tax return when you sell your principal residence to claim the full principal residence exemption. You do not have to pay tax on any capital gain when you sell your house if it was your principal residence for all the years you owned it and you did not use any part of it to earn income.

 

New Trust Reporting:

While the Canada Revenue Agency (CRA) is providing temporary relief from penalties for bare trusts that file late for the 2023 tax year, the filing requirement nevertheless remains.

The new rules — effective for trusts with year ends of Dec. 31, 2023, and after — apply to more types of trusts, including bare trusts. Trustees also are required to report information such as the names, addresses and social insurance numbers of beneficiaries and other parties connected to a trust. Trustees affected by the new rules, must file a T3 trust return along with a new Schedule 15 beneficial information return by the filing deadline of March 30 (April 2 in 2024).

In December 2022, Ottawa passed legislation to expand the trust reporting rules to include express trusts (created with a settlor’s express intent) and bare trusts (in which a trustee’s only duty is to transfer property to a beneficiary on demand). Previously, only trusts with taxes payable for the year or those that disposed of capital property, had to file an annual trust return. Many clients will have a reporting obligation and not be aware of it.

For example, a parent co-signing a mortgage with an adult child might constitute a bare trust, with the parent being the legal owner of the property and the child being the beneficial owner.
A bank account opened by a parent for the benefit of a minor child might also be considered a bare trust. Common trusts set up for estate planning purposes, such as alter ego, joint partner and spousal trusts also now have a reporting requirement. The rules may extend to trusts set up to facilitate financial transactions.

Certain trusts are excluded from the scope of the expanded rules. These include: graduated rate estates; qualified disability trusts; mutual fund trusts and registered plans; trusts in existence for less than three months; and trusts with less than $50,000 in asset value — as long as those assets consist only of cash and securities traded on a designated exchange (and other certain assets).

In addition to the existing penalty for failing to file a T3 return on time — $25 a day, with a minimum penalty of $100 and to a maximum of $2,500 — the new reporting rules introduce an additional penalty for deliberately not filing or for gross negligence: $2,500 or 5% of the property’s value, whichever is greater.

The deadline for filing a T3 return is 90 days after the trust’s year end. For trusts with a 2023 calendar year end, the deadline for filing the return is March 30, 2024. However, as this day falls on a Saturday and April 1st is Easter Monday, the CRA advised it will consider the T3 return to be filed on time if the agency receives it, or it’s postmarked, by Tuesday, April 2nd

Financial Planning:
A complete financial plan should address all financial planning components:

  • 1. Cash Management Plan: Income, savings and spending, plus effectively dealing with debt.
    2. Estate Planning: Having proper wills and power of attorney documents that accurately reflect your wishes, and reviewing asset ownership structures and beneficiary designations to ensure they are not conflicting with these documents.
    3. Investment Planning: Building an appropriate investment plan that aligns with your willingness to assume risk and considers your need for taking the risk.
    4. Retirement Plan: Planning how much to save for retirement and spend in retirement, and utilizing the optimal vehicles (RRSPs, TFSAs, corporate savings, non-registered savings) to reach the targets you set.
    5. Risk Management Plan: It is generally best to use insurance for events with a low probability of occurring, but may have very severe consequences. Events such as disability or death require income replacement for your family.
    6. Tax Plan: Every Canadian has the right to organize their affairs to pay the lowest amount of tax possible while complying with the country’s tax code.