Personal Tax Preparation in Calgary, AB

C. Lough-Li Professional Corporation provides personal tax preparation services in Calgary.

Our firm focuses on staying current on the income tax changes and legislation in order to minimize your income taxes and comply with the constant changes within the income tax regulations and legislation.

We attempt to offer a very thorough and personalized service in preparing your personal income tax returns. Our process is based on supplying you with updates in the income tax rules on a yearly basis so we can capture these changes on your personal tax return. We follow up with an initial interview for your first year of filing and on a continual basis when your personal tax situation is changing. These changes occur often with the constant changes in a person’s life, whether it is brought about by a marriage, divorce, having a child, a disability or a death and many other scenarios. Regardless we can deal with all of your income tax requirements to comply and minimize your tax liability. After the preparation of your returns we follow-up with a final interview to review these returns and answer any questions you may have. You don’t leave our office without knowing why you owe money to the government or why your refund is the amount it is.

We pride ourselves in our personal income tax process.

Contact our personal tax accountants to know more about personal income tax services provided by us.

WHAT’S NEW IN PREPARING YOUR 2022 PERSONAL INCOME TAX RETURN

TAX

The Home Office deduction is still in effect for your 2022 tax Return:

Employee home office deduction Calculation method
In the December 14, 2021 federal Economic and Fiscal Update (economic statement), the government announced that the optional simplified method of calculating an employee’s home office deduction, introduced in 2020, will be extended for 2021 and 2022. This method is available to employees who were required to work from home due to the COVID-19 pandemic and are not claiming any other employment-related expenses (such as the use of a car, or paying for a substitute or supplies, etc.).

The deduction is calculated as a flat rate of $2 per day worked at home. The maximum deduction under the simplified method is $500 for the 2022 tax year. Employees who claim other employment-related expenses may continue to use the detailed method to calculate their home office expense deduction.

Amounts received related to COVID-19:

If you received benefits for the 2022 tax year relating to COVID-19 programs you will receive in the mail a T4A as the benefits will be included in income on your tax return. These benefits would include the following programs: Canada Recovery Benefit, Canada Recovery Caregiving Benefit, Canada Recovery Sickness Benefit or Canada Worker Lockdown Benefit.

COVID-19 Benefits subject to Exemption:

In certain cases there were benefits from the Canada Recovery Benefit, Canada Recovery Caregiving Benefit, Canada Recovery Sickness Benefit or the Canada Worker Lockdown Benefit that were eligible for exemption under Section 87 of the Indian Act. In these case a Form T90 – Income Exempt from Tax under the Indian Act must be filed with your return.

COVID-19 Benefit Repayment in a prior year:

There is an option by filling out Form T1B to deduct repayments relating to COVID-19 Benefits in a prior year. If you repaid your Benefits in 2022, you have the option to deduct these in 2020, 2021, or split between 2022 and the year that the benefit was received. By Filing the Form T1B the Government will automatically reassess your tax returns and no amendment will be required.

Air Quality Improvement Tax Credit:

A new 25% refundable tax credit for small businesses that improves ventilation or air quality at your place of business. The conditions to qualify are as follows:

They incurred expenses for air quality improvements in qualifying locations between September 1, 2021 and December 31, 2022.
Eligible expenses are limited to $10,000 per location, and $50,000 across all locations for affiliated businesses.
The credit is available to unincorporated sole proprietors and Canadian-controlled private corporations with taxable capital of less than $15 million employed in Canada in the preceding year.
Partners who meet these same requirements can also claim the tax credit for their share of a partnership’s eligible expenses.

Also there is a refundable tax credit for farmers in provinces without federally-approved carbon pricing systems. This credit will return the federal fuel charge proceeds directly to farmers based on their eligible farming expenses. To be eligible for the credit, farms must incur farming expenses of at least $25,000.

Critical Mineral Exploration Tax Credit:

The Critical Mineral Exploration Tax Credit is a 30% investment tax credit for the exploration of specified minerals. The only expenses eligible are those that were renounced under eligible flow-through share agreements entered into after April 7, 2022 and before April 1, 2027.

Disability Tax Credit:

After the 2021 tax year, an individual diagnosed with type 1 diabetes is deemed to have met the two times and 14 hours per week requirements for life-sustaining therapy.

First-time Hone Buyer’s Tax Credit:

Homes purchased after December 31, 2021 are entitled to a first-time home buyer’s tax credit of $10,000. These are for qualifying homes that are purchased.

Home accessibility Tax Credit:

This credit allows the qualifying Individual to gain access to or to be mobile or functional within the eligible dwelling or reduce the risk of harm to the qualifying Individual within the eligible dwelling or in gaining access to the dwelling.
The annual expense limit of the home accessibility tax credit has increased to $20,000. The Home Accessibility Tax Credit, which is a non-refundable tax credit, was introduced in the Federal 2015 Budget. The credit is for qualifying expenses incurred in 2016 or later, for work performed or goods acquired in respect of a qualifying renovation of an eligible dwelling of a qualifying individual (eligible for the disability tax credit or 65 years or older at the end of the year).. The HATC can be claimed by a qualifying individual or an eligible individual making a claim for a qualifying individual.

Labour Mobility Deduction for Tradespeople:

Eligible individuals can deduct up to $4,000 per year for temporary relocation expenses. This credit is available for eligible tradespeople and apprentices working in the construction industry.

Medical Expense Tax Credit:

The Medical expense tax credit has included in the 2022 tax year amounts paid to fertility clinics and donor banks in Canada to obtain donor sperm or ova to enable the conception of a child by the individual, the individual’s spouse or common-law partner or a surrogate mother on behalf of the individual.

Canada Training Credit (CTC) (Still in effect for the 2022 tax year)

The CTC is a refundable tax credit introduced in 2020. If you are between 26 and 65 years old, you will accumulate $250 towards their Canada Training Credit Limit (CTCL) account in 2020 if both of the following apply to you:

You had at least $10,000 of “working income” in 2019.
Your total 2019 net income was less than or equal to $147,667 (the level at which the 29% tax bracket started that year).

Working income generally includes employment and self-employment income, research grants, scholarships, bursaries, prizes, and maternity and parental EI benefits.

Who qualifies, and how to calculate your CTC balance

If you meet both the minimum working income limit and the maximum total income limit in subsequent years, the CTCL account will continue to accumulate over time to a maximum of $5,000; both limits will be indexed to inflation.

You can claim up to 50% of the costs of taking a course or enrolling in a training program against the balance in your account in the year you paid the tuition. The remaining 50% of the program costs may be eligible for the tuition tax credit, as the CTC uses the same eligibility criteria as are used for the tuition tax credit. You would see the balance in your CTC account for 2020 on your notice of assessment for 2019. Any unused CTCL will expire when you turn 65.

For example, Sohil was a 28-year-old Canadian resident in 2020. From 2019 to 2023, he met both the minimum working income limit and the maximum net income limit, so the balance in his notional CTCL account as reported on his 2023 notice of assessment was $1,250 (five years x $250 per year). In 2024, he enrols in a continuing education program at a local community college to upgrade his skills. The tuition he pays for the program is $2,000.

On his 2024 tax return, Sohil can claim a refundable CTC of $1,000 (50% of the $2,000 tuition), and he can claim a non-refundable tuition tax credit of 15% on the remaining $1,000 of tuition fees not eligible for the CTC. Sohil’s CTCL for 2025, assuming he meets both the working income and net income criteria for 2024, would be $500 ($1,250 opening balance – $1,000 CTC claimed in 2025 + $250 added based on his income in 2024).

Capital Cost Allowance for Zero-Emission Vehicles

There are two CCA classes for zero-emission vehicles acquired after March 18, 2019, which become available for use before 2028. (Class 54 and 55)

Lifetime Capital Gains Exemption

The lifetime capital gains exemption has increased based on the indexation to inflation to $913,630 in 2022. Qualified farm or fishing property continues to be eligible for a maximum total limit of $1,000,000 for 2022.

Tax-Free Savings Account

For 2022, the tax-free savings account will have a proposed annual contribution limit of $6,000 subject to inflation for subsequent years. The maximum amount from 2009 – 2021 that an individual can contribute to a Tax Free Savings Account is $81,500. Contribution room is accumulated for only those years in which the individual was at least age 18.

Non-eligible and Eligible dividend rates

In 2022, non-eligible dividends had the gross-up factor of 15% and the dividend tax credit adjustment is 9/13 for an effective dividend tax credit rate of 10.38% of the grossed up dividend. In 2022 the eligible dividends had a gross up factor of 38% and the dividend tax credit adjustment is 6/11 for an effective dividend tax credit rate of 20.73%.

Registered Retirement Savings Plan

Your maximum RRSP limits for 2022 are $29,210.

Marginal Rates

There have been no changes in the overall federal marginal tax rates; however, the thresholds for taxable income have been changed as indicated in the comparison table below.

2022 Taxable Income	Federal	Alberta	2022 Taxable Income
On the first $50,197	15.0%	10%	On the first $134,238
$50,197 up to 100,392	20.5%	12%	134,238 up to 161,086
$100,392 up to 155,625	26.0%	13%	161,086 up to 214,781
$155,625 up to 221,708	29.0%	14%	214,781 up to 322,171
Over $221,708	33.0%	15%	Over $322,171

Other changes for 2022:

Employment Insurance and Canada Pension Plan

Employment Insurance premiums are $1,002.45 with the employer’s portion being $1,403.43. The maximum insurable earnings have increased from $56,300 in 2021 to $61,500.
The maximum pensionable earnings for the Canada Pension Plan have increased from $61,600 in 2021 to $66,600; the employee and employer contribution rates have also increased from 5.45% to 5.95% in 2022.
The contribution limit for Tax Free Savings Accounts remains unchanged at $6,000 for 2021.

Changes in 2023:

Residential Property flips:

Proposed in the 2022 budget, Residential properties (including rental properties) which are disposed of in 2023 and have been owned for less than 12 months will be deemed to be business income and taxed at full rates.

Home Renovation Tax Credit

Effective for 2023 there is available a $50,000 non-refundable tax credit for qualifying renovations which is a renovation that creates a secondary dwelling unit to enable an eligible person (senior or person with a disability) to live with a qualifying relation.

Underused Housing Tax Credit

Effective January 1, 2022 there is a federal tax applied to a vacant or underused housing in Canada targeting Canadian and foreign property owners.
The underused housing tax is an annual 1% tax on the ownership of vacant or underused housing in Canada. The tax usually applies to non-resident, non-Canadian owners, and in some circumstances it also applies to Canadian owners.
If you are an owner of residential property including rental properties, please ensure you consult our firm to ensure whether you are exempted or affected by the underused Housing Tax Credit. There are specific rules that exempt you as an individual or a corporation or other mode of ownership, which means that you are not required to file the Underused Housing Tax Return and Election Form (UHT-2900 E), and therefore do not have a liability to pay tax. There are additional rules that classify you as an “affected owner”, which mean that you will have to file the tax return, but may not have a liability to pay tax.

2024 UPDATE FOR YOUR PERSONAL INCOME TAX RETURN: WHAT’S NEW

Tax Time

Changes to the Capital Gains Inclusion Rate:

The capital gains change to the inclusion rate (1/2 to 2/3) will not occur until 2026, based on the Liberal Party being in Power.

Changes to the Lifetime Capital Gains Exemption:

In addition, the increase to the capital gains exemption will be raised to $1,250,000 from June 25, 2024.

The New Canadian Entrepreneur Incentive: (Effective for 2025)

The new Canadian Entrepreneurs’ Incentive will also proceed from 2025 onward as announced. The inclusion rate will be 1/3 on up to $400,000 of eligible capital gains, $800,000 in 2026, $1,200,000 in 2027, $1,600,000 in 2028 and $2,000,000 in 2029.

The seller must be an individual (not a trust) who is resident in Canada and must have owned at least 5% of the business for at least 24 months prior to the sale.

The Canadian Entrepreneur Incentive applies when a Qualified Small Business Corporation, with the added restriction of an “Excluded business” sells its share after being active in a business for at least three years.

The added restriction of an Excluded Business is a common service business based on knowledge of the service provider, on rental of Real Property hospitality or recreation.

The Canadian Entrepreneur incentive also applies to the sale of shares of a qualified Farm or Fishing Property. To qualify for the incentive your tax return must be filed no later than one year after the actual due date.

The New Canada Dental Benefit:

There is a new dental benefit available for taxpayers 65 years or older. If you are 70 or older you should have received a letter in 2024 and if you are between 65 years old and 69 years old you can start applying online as of May 2024. To qualify you must not have access to dental insurance, have an adjusted family income less than $90,000, are a Canadian Resident, have filed your previous tax return in the previous year.

There will also be other programs to help lower dental costs for eligible families earning less than $90,000 per year. Parents and guardians may be eligible if they pay for dental care for a child under 12 years old who does not have access to a private dental insurance plan. A tax free payment will be available to families depending on their family income. Those families with an income under $70,000 will receive $650 per eligible child, with a family income from $70,000 - $79,999, there will be a tax-free benefit of $390 per eligible child, and with a family income of $80,000 - $89,999 there will be a tax-free payment of $260 per eligible child.

Tax Time

Canada Carbon Rebate:

The rural supplement to the baseline Canada Carbon Rebate, which is available to eligible individuals who reside in small and rural communities, was increased from 10% to 20%.

Payments:

As per Canada Revenue Agency, effective January 1, 2024 remittances made under the Income Tax Act in excess of $10,000 must be electronically submitted. If they are not electronically submitted there will be a penalty of $100 for each time a submission has been made over $10,000.

Business and Professional Income (Passenger Vehicles, Leasing and Interest Thresholds):

Capital Cost Allowance:
The Limit to deduct Capital Cost Allowance on Passenger Vehicles has increased from $36,000 to $37,000 (plus applicable sales taxes) effective January 1, 2024. The limit for Capital Cost Allowance on zero emission passenger vehicles is $61,000, effective January 1, 2025.

Leasing Costs:
The Leasing costs on passenger vehicles, effective January 1, 2024 have increased from $950 to $1,050 (plus applicable sales taxes).

Interest Costs:
The deductible interest costs on financing a vehicles have increased from $300 per month to $350 per month.

Immediate Expensing of Capital Assets:
Proposed amendments will allow for full expensing of eligible property in the CCA Classes as follows:

Class 44 (patents or rights to use patented information for a limited or unlimited period)
46 (data network infrastructure equipment and related systems software)
50 (general-purpose electronic data-processing equipment and systems software) that is acquired after April 15, 2024, and becomes available for use before 2027.

Capital Cost Allowance:

As Proposed December 16, 2024 the accelerated investment incentive for qualifying property, as well as immediate expensing for manufacturing or processing machinery and equipment, clean energy generation and energy conservation equipment, and zero-emission vehicles, for property that is acquired on or after January 1, 2025, and becomes available for use before 2030 (with a four-year phase-out starting in 2030) has been reinstated.

Foreign Investment in Canadian Housing:

As of January 1, 2023, non-Canadians will be prohibited from purchasing residential real estate in Canada for a period of two years. This ban will not apply to Canadian Citizens, Permanent residents of Canada, or companies incorporated in Canada that are not controlled by non-Canadians.

Residential Property flips:

As of 2023 Residential properties (including rental properties) which are disposed of in 2023 and have been owned for less than 12 months will be deemed to be business income and taxed at full rates.

As of January 1, 2024 all expenses deductible on these non-compliant rental properties will be denied. The non-compliant rental properties refer to those properties disposed of and owned less than 12 months.

Proposed amendments increase the maximum capital cost allowance (CCA) rate from 4% to 10% for buildings or parts of a building that qualify as a new purpose-built residential rental throughout the year. To qualify, construction must start after April 15, 2024, and before 2031, and the property must become available for use before 2036.

Alternative Minimum Tax (AMT):

Alternative Minimum Tax ensures high-income individuals pay minimum amount of tax even when they receive income subject to tax incentives and preferential treatments. There will be significant changes to the calculation of Alternative Minimum tax starting in 2024.

The AMT exemption will increase from $40,000 to $173,000, and the rate will increase from 15% TO 20.5%.

Inclusion rates will significantly change as follows:

Only 50% deduction (formerly 100%) for Employment expenses, moving expenses, childcare, interest and carrying charges, limited partnership losses, non-capital loss carryovers.
Only 50% (formerly 100%) of most non-refundable tax credits will be allowed (excluding dividend tax credits)
100% of capital gains are added back which was formerly 80%
30% of capital gains generated on donation of publicly listed securities are added back (currently 80%)

New First Home Savings Account: (Introduced in 2023)

There is a new First Home Savings Account (FHSA), that is in addition to the Home Buyer’s Plan. This plan is for first time home buyers and has a life-time limit of $40,000 in contributions, which consist of annual contributions of $8,000 per year. Annual contributions not contributed in the current year can be carried forward to the following year but the carry-forward is maximized at $8,000. Money put into the account is tax deductible in the year of contribution. Similar to the Home Buyers plan where you and your partner can save funds up to $70,000 ($35,000 each), the FHSA allows you and your partner to save funds of $80,000 ($40,000 each).

There is no tax penalty for withdrawals and no limit on withdrawals. Once the FHSA is opened, the account holder has 15 years to make their home purchase, or the funds are transferred to either an RRSP or RRIF. The qualification of a First Time Home Buyer is not to have owned or jointly owned a principal residence in the last five years. This requirement for a First Time Home Buyer is reclaimed without the five year rule by those persons who have had a marriage breakdown. (you live separate and apart from your spouse or common-law partner for a period of at least 90 days)

New CPP Rules for 2024:

Effective January 1, 2024 there will be two different rates of CPP applied on two different levels depicted as CPP1 and CPP2. The maximum CPP earnings for 2024 will be $68,500. For 2024, the second ceiling will be $73,200 (7% higher than first earnings ceiling). For 2025 and subsequent years, the second ceiling will be 14% higher than first earnings ceiling.

Social Benefits Repayment:

The repayment threshold amount has increased to $90,997 for old age security benefits and to $79,000 for unemployment insurance benefits.

Canada Learning Bond:

Under new rules introduced in 2024, eligible children born in 2024 or later will be automatically enrolled for the Canada learning bond (CLB) if they do not otherwise have a registered education savings plan (RESP) set up for them by the age of four. The federal government will open an RESP for these children when they reach age four and deposit the applicable CLB payments into the account. The new rules will apply beginning in April 2028.

Tax-Free Savings Account

For 2024, the tax-free savings account will have a annual contribution limit of $7,000 subject to inflation for subsequent years. The maximum amount from 2009 – 2024 that an individual can contribute to a Tax Free Savings Account is $95,000, 2025 - $102,000). Contribution room is accumulated for only those years in which the individual was at least age 18.

Non-eligible and Eligible dividend rates

In 2024, non-eligible dividends had the gross-up factor of 15% and the dividend tax credit adjustment is 9/13 for an effective dividend tax credit rate of 10.38% of the grossed up dividend (9.0301 of taxable dividends). In 2024 the eligible dividends had a gross up factor of 38% and the dividend tax credit adjustment is 6/11 for an effective dividend tax credit rate of 20.73%, (15.02% of taxable dividend).

Registered Retirement Savings Plan

The annual registered retirement savings plan (RRSP) dollar limit for purposes of determining an individual’s RRSP deduction limit is $31,500 for 2024 and increased to $32,490 for 2025. The deadline for making deductible 2024 RRSP contributions is March 1, 2025. But since March 1, 2025, falls on a Saturday, the deadline is administratively deferred to the next business day, Monday, March 3, 2025.

Marginal Rates:

There have been no changes in the overall federal marginal tax rates; however, the thresholds for taxable income have been changed as indicated in the comparison table below.

2024 Taxable Income	Federal	Alberta	2024 Taxable Income
On the first $55,867	15.0%	10%	On the first $148,269
$55,868 up to 111,733	20.5%	12%	$148,270 up to $177,922
$111,734 up to 173,205	26.0%	13%	177,923 up to 237,230
$173,206 up to 246,752	29.0%	14%	237,231 up to 355,845
Over $243,753	33.0%	15%	Over $355,846

Find out more about personal income tax services in Calgary by scheduling an appointment with our personal tax accountants or calling our office at (403) 209-3275.

Our personal tax accountants at C. Lough-Li Professional Corporation service the entire Calgary and surrounding areas.