The 10 most-asked tax season questions — answered by an expert

Happy tax season!

This time of year can feel overwhelming for Canadians, but not to worry — Daily Hive has you covered.

We spoke with H&R Block tax expert Yannick Lemay about his clients’ 10 most-asked tax season questions.

From new tax changes you should know about to how to fix errors on your return to how a change in marital status could impact your taxes, here are all of the answers in one article to save you from opening multiple Google tabs.

1. What are the new tax changes this year that I should know of? 

• Canada Carbon Rebate (CCR): This new credit replaces the former Climate Action Incentive Payment (CAIP), and comes with more money back in the pockets of Canadians.
• Multigenerational Home Renovation Tax Credit (MHRTC): The MHRTC is a new refundable tax credit encouraging individuals to regain renovation costs for creating secondary units on their property to house family members, with potential claims of up to $50,000 per renovation.
• Property Flipping Rule: As of January 1, 2023, the residential property flipping rule has been in effect. It categorizes profits from selling homes owned for less than 365 consecutive days as business income, unless specific exemptions apply. This rule is designed to discourage house flipping and driving up home prices.

2. What are some of the biggest mistakes one could make filing during tax season? 

Lemay says key mistakes include providing incorrect or incomplete information, omitting income, overlooking available deductions and credits (there are more than 400 available to Canadians!), and failing to report changes in marital status.

He added that if you don’t file on time, late filing penalties may apply, with a penalty of 5% of any balance owing, plus 1% for each full month the return is late, up to 12 months. Penalties can be higher if you have already filed a late return in the previous years.

3. How can I reduce what I owe on my tax return? 

• Maximize contributions to your Registered Retirement Savings Plan (RRSP) for tax-efficient retirement savings and income reduction. 
• Leverage education credits, particularly the federal tuition tax credit, to offset tuition fees paid for post-secondary education. 
• Optimize charitable donations. Tax savings are higher when your combined charitable donations exceed $200. You can combine your receipts from the last five years if you didn’t claim them previously.
• Remember to include unreimbursed medical expenses in your tax returns for potential deductions.

4. How long does it take to get my refund? 

According to Lemay, taxpayers filing online with direct deposit may receive refunds in as little as eight business days, while paper returns could take up to eight weeks to process.

If you qualify, you can receive your refund the same day you file your tax return with H&R Block Instant Refund, he added.

5. How can I fix any errors made on my return? 

Did you make a mistake on your return this tax season? No need to stress.

“When you get your Notice of Assessment back from the CRA, adjust the line items that were wrong,” explained Lemay. “Avoid filing a new return unless instructed to do so, which you’d do under subsection 152(7) of the Income Tax Act.”

6. My workplace has implemented a hybrid working model. How does that impact my taxes? 

Remote work deductions are still available in 2023, with revised criteria including the necessity for a signed T2200 form from your employer. You must also meet specific home office usage requirements, says Lemay.

“This is because the simplified form that was established during COVID-19 lockdowns (known as T2200S) is no longer available for 2023,” he explained. “Though that might mean more calculations for people claiming a home office, it might also result in a bigger deduction!”

7. What is the new Canada Carbon Rebate, and what happened to the Climate Action Incentive Payments? 

The Climate Action Incentive Payment was renamed this year to the Canada Carbon Rebate, and residents of every participating province (all except British Columbia, Québec and the territories) will see even more money this year than last.

For example, if you live with your spouse and one child under 19 in Alberta, you can receive $1,575 total back in your pocket, spread out over four quarterly payments.  

To ensure you get the Canada Carbon Rebate payments on time, Lemay says families must electronically file their income tax returns by March 15, 2024. They’ll receive their payment on April 15, 2024.

If your tax returns are processed after this date, your payment will be included in a subsequent payment after your return is assessed. 

Lemay stresses that you must file your 2023 tax return to get the Canada Carbon Rebate. 

8. How can I reduce taxes on my investment income?

Lemay advises contributing to your Tax-Free Savings Account (TFSA) account so the investment income you earn is accumulated tax-free. 

In 2023, if you were at least 18 years old, you could contribute $6,500 to your TFSA account. In 2024, this limit has increased to $7,000. 

9. Which should I choose between RRSP vs TFSA? 

Deciding where to put your money between a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA) depends on many factors, especially your income, says Lemay.

If you earn more, putting money into RRSPs can help lower taxes. If you earn less, using TFSAs might be better, saving RRSPs for later when you earn more.

Speaking of RRSPs, the contribution deadline is this week, so here’s everything you should know.

10. My marital status has changed over the past year. How does that impact my taxes? 

If you get married and live together for a year, you must file taxes together, advises Lemay.

Even though you submit separate forms, some tax benefits are based on your combined family income, such as the Canada Carbon Rebate.