Getting Ready for your 2022 Tax Return
Tax-filing season is fast approaching, and it is a busy time for both individuals and businesses. While tax season may not be the most wonderful time of the year, there are a few steps you can take now to remove some of the stress of filing your taxes when the time comes.
Before you call up your accountant or wade into the taxation trenches yourself, there are a few changes you should know about for the 2022 tax year.
Here’s what you need to know about income tax rates:
Personal income tax brackets and rates – 2022 tax year
Taxable Income – 2022 Brackets | Tax Rate |
$0 to $43,070 | 5.06% |
$43,070.01 to $86,141 | 7.70% |
$86,141.01 to $98,901 | 10.50% |
$98,901.01 to $120,094 | 12.29% |
$120,094.01 to $162,832 | 14.70% |
$162,832.01 to $227,091 | 16.80% |
Over $227,091 | 20.50% |
New tax credits to consider for 2022:
To help you understand and prepare for any upcoming changes, we compiled a summary of the most significant federal tax changes that may affect your 2022 personal income tax return, as well as changes that may help you save taxes in 2023 and beyond. Here’s a look at what you need to know, and at some of the new benefits you may qualify for this year.
First-time home buyers’ tax credit
The amount used to calculate the first-time home buyers’ tax credit has increased to $10,000 for a qualifying home purchased after Dec. 31, 2021. That means Canadians who bought their first home last year may be eligible for a refund of up to $1,500.
Home accessibility tax credit
This credit is available for eligible home renovations or alteration expenses aimed at making a home safer or more accessible for a person with a disability. The benefit has been enhanced this year, allowing Canadians to claim up to $20,000 in expenses.
One-time top-up to the Canada Housing Benefit
The government introduced a one-time $500 payment to help lower-income renters facing housing affordability challenges. Applications are open until March 31, 2023. To obtain the one-time payment, you need to have filed your 2021 tax return.
Disability tax credit
For 2021 and later tax years, 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.
Canada Dental Benefit
The new interim Canada Dental Benefit is available to eligible families earning less than $90,000 per year. It provides financial support for parents and guardians of children under 12 years old if they receive dental care in Canada and do not have access to private dental insurance. In order to receive this benefit, you need to have filed your 2021 tax return.
Simplified northern residents travel deduction
The CRA is launching a pilot project to make it easier for northern residents to determine the lowest return airfare, an amount required to claim travel deductions. The simplified process includes tables that identify the lowest return airfare, which are available on the government of Canada website.
Labour mobility deduction for tradespeople
The labour mobility deduction provides eligible tradespeople and apprentices working in the construction industry with a deduction for certain temporary relocation expenses. Eligible individuals may be able to deduct up to $4,000 in eligible expenses per year.
Medical expense tax credit (for surrogacy and other expenses)
The list of eligible medical expenses has been expanded to include 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. In addition, certain expenses incurred in Canada for a surrogate or donor are considered medical expenses of the individual.
Important tax filing deadlines to know
Filing and payment due dates for taxes, instalment payments, and any amounts you may owe
Filing dates for 2022 taxes
- February 20, 2023: Earliest day to file your taxes online
- April 30, 2023 (May 1, 2023 since April 30 is a Sunday): Deadline to file your taxes
- June 15, 2023: Deadline to file taxes for self-employed
Payment date for 2022 taxes
April 30, 2023 (May 1, 2023 since April 30 is a Sunday): Deadline to pay your taxes
SOURCES:
https://www2.gov.bc.ca/gov/content/taxes/income-taxes/personal/tax-rates