The 2024 tax year brought several important changes to Canadian tax law that affect both individuals and businesses. Understanding these changes is essential for accurate tax filing and optimal tax planning.
Personal Income Tax Bracket Adjustments
The federal income tax brackets were indexed for inflation in 2024, providing modest relief for most Canadian taxpayers. The basic personal amount — the income threshold below which no federal tax is owed — was also increased.
Capital Gains Inclusion Rate Changes
One of the most significant changes for 2024 is the proposed increase to the capital gains inclusion rate from 50% to 66.67% for gains exceeding $250,000 for individuals, and for all capital gains realized by corporations and trusts. This change has significant implications for investors, business owners, and estate planning.
First Home Savings Account (FHSA)
The FHSA continues to be available for first-time home buyers in Canada, allowing annual contributions of up to $8,000 (lifetime limit $40,000) that are tax-deductible and grow tax-free when used for a qualifying home purchase.
Business Tax Updates
The small business deduction limit remains at $500,000 of active business income. SR&ED tax credits continue to provide valuable incentives for Canadian businesses investing in research and development.
Contact BOMCAS Canada to understand how these changes affect your specific tax situation.
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