Tax Tidbits Spring 2023

Some quick points to consider…

– For 2023, the maximum amount that may be deducted for non–taxable allowances paid to an employee using a personal vehicle for business purposes has increased by $0.07 to $0.68/km for the first 5,000 kms driven and to $0.62 for each additional km. For Yukon, the Northwest Territories and Nunavut, the tax–exempt allowance will continue to be $0.04/km higher.

–  Rapid inflation has resulted in a significant increase of 6.3% to personal income tax and benefit amounts for 2023. For example, the income level at which OAS repayments commence is now $86,912 (from $81,761), the capital gains exemption for the sale of certain small businesses is now $971,190 (from $913,630), and the annual TFSA contribution limit has increased to $6,500 (from $6,000).

– Legislation that requires more trusts to file trust returns and more information to be disclosed has been enacted. The commencement date was recently deferred by a year to apply to fiscal years ending on or after December 31, 2023. These filing requirements include bare trust arrangements, such as in–trust bank accounts that a parent or grandparent may have with their child or grandchild, unless a specific exception applies.