Navigating 2024's Tax Landscape: What It Means for You
As we step into 2024, it's time to get familiar with some important changes in Canada's tax rules. Understanding these can help you make better decisions about your money this year:
New Tax Brackets: There's good news for many of us because the government has changed the tax brackets. This means you might pay less tax on the money you earn. It's like getting a little more in your paycheck.
In 2023
Up to $53,359 of income will be taxed at 15%.
Income between $53,359-$106,716 will be taxed at 20.5%.
Income between $106,717 and $165,430 will be taxed at 26%.
Income between $165,430 and $235,675 will be taxed at 29%.
Any income above $235,675 will be taxed at 33%.
Higher Taxes for Big Earners: If you earn a lot, you might see an increase in taxes due to the new Alternative Minimum Tax rate. It's designed to make sure high earners pay their fair share.
Changes in Home Office Deductions: For those who work from home, the way you claim your office expenses has changed. You'll need to keep detailed records now, as the simpler method used during the pandemic is no longer available.
EI Premiums Going Up: Both workers and employers will need to pay a bit more for Employment Insurance. This might mean a little less in your take-home pay.
Basic Personal Amount Increase: This year, you can earn up to $15,705 before you have to pay any federal income tax. However, if you're a high earner, this might not make a big difference for you.
More Room for Retirement Savings: The limit on how much you can contribute to your RRSP has increased, giving you a chance to save more for retirement.
Higher TFSA Contribution Limit: You can now put up to $7,000 in your Tax-Free Savings Account. It's a great way to save money without worrying about taxes on what you earn from it.
These changes can impact how much tax you pay and how you save. It's a good idea to talk to a tax expert to understand how these updates can affect you. They can help you plan better for the year ahead.
