Instead of providing a summary of 2023 tax news and updates—which can be found on the CPA Canada website—we invited our Client Service Leaders to answer the question: “If you had one piece of advice for clients as we move into 2024, what would it be?” Here are some responses:
The tight labour market has made it more important than ever to invest in the current talent within your organization. Today’s employees place a lot of importance on their manager’s ability to help them develop their skills and achieve their career goals. Removing barriers to professional development and providing your managers with the time and resources required to develop their team members will help you retain top talent. Designing individual plans that not only align with your business needs, but also support each employee’s goals, skills and long-term career growth within your organization is essential.
– Dinah Bailey, CHRP, CHRL, Human Resource Director
With our ever-increasing reliance on technology, cyber security has never been more important. As the growing sophistication of cyber threats and phishing attacks pose major risks to all businesses, it is vital to prioritize and enhance your cyber security measures. This might include implementing multi-factor authentication, arranging for security awareness training, and/or installing security tools such as endpoint protection, application control software, and next-generation firewalls. Taking a proactive approach in improving your security posture through security audits and risk assessments will also help strengthen your IT infrastructure and network security.
– Luis Bondoc, B.Sc. CoE, Client Service Manager – IT
As Canada has one of the most, if not the most, complicated tax regimes in the world, it can be very difficult to ‘DIY’ even the most seemingly straightforward transactions. Most of the financial decisions you make will likely have one or more tax or filing implications—making it very important to have a good advisor by your side. A perfect example of this is the new Underused Housing Tax, which has several filing requirements, including a filing requirement if you have co-signed on a mortgage. The majority of Canadians who fall into this category, but who don’t have a tax or other financial advisor, will likely miss this filing obligation and could potentially be hit with a punitive non-filing penalty.
– Igor Fik CPA, CA, Client Service Manager
If you are considering making a substantial charitable donation within the next couple of years, it may be more advantageous to make that donation in 2023 versus waiting until 2024 or later. Recent changes to the Alternative Minimum Tax regime—intended to ensure high income taxpayers pay their “fair share” of taxes—will limit the tax benefits of charitable donations after 2023.
– Paul F Keul, CPA, CA, TEP, Client Service Partner – Tax
As we look towards 2024, one critical piece of advice for clients, especially in IT, is to proactively enhance their cybersecurity readiness. This past year has seen a significant shift in demands from insurance companies regarding IT security measures. With the rising frequency and sophistication of cyber-attacks, insurance providers are increasingly scrutinizing the cybersecurity readiness of businesses before offering coverage.
– Greg Koniecek, M.Sc. IT, Client Service Partner
Operating a business in today’s fast-paced environment presents an entrepreneur with a myriad of daily choices. Opportunities abound. The highest and best use of your time is to work on the things that differentiate you from your competitors and make your business better, more successful and more valuable.
The best way to do this is to:
- build a strategic plan and stick to the strategic initiatives you identify in that plan,
- seek help from competent team members to own and advance your strategic initiatives,
- say no to everything else, and
- commit to reviewing and updating your strategic plan quarterly to stay on track.
– Kalin L. McDonald CPA, CA, Managing Partner
With the CRA increasing its interest rate on arrears payments and instalment payments, it is increasingly important to stay on top of all payment requirements. If you owed tax in a given year in any program (including HST), you are responsible for monthly or quarterly instalments the following year. If you know your income will be lower, you can adjust on the fly.”
– Stephen L. Myers, CPA, CA, Client Service Partner
Ensure you understand and follow all government filing and payment deadlines. Interest rates have increased over the past year and a half and the Canada Revenue Agency interest rate has followed suit. When are my corporate and sales taxes due? Am I required to make instalment payments for next year? When is my CEBA loan due? These are the type of questions that you should be asking your accountant to help prevent your hard-earned cash going towards late fees and penalty payments.
– Kamil Niemczyk CPA, Client Service Manager
As 2023 winds down, now is the time to reflect on what went well and what didn’t over the past year and actively plan for better outcomes in 2024. Open communication with your accountant or financial advisor before making any significant decision will have a significant impact. Also, ensure you have a complete picture of your taxable income (corporate and personal) for 2024 and make instalment payments as they fall due. CRA interest rates have increased and can cost you a fortune.
– Mojisola (MJ) Ogungbola, Client Service Manager- Private Enterprise
Fixing an error with the Canada Revenue Agency can be both costly and challenging, and in many situations can trigger an audit. Seeking tax advice from a qualified tax professional is crucial, especially given the complexity of our tax systems and the significant penalties associated with non-compliance.
– Annick Ouellet, CPA, CA, Client Service Partner – Tax
Life moves fast, and the big moments—like getting married, buying a property, expanding your family, or starting a new business—can affect your will, or your need for one. Take a moment to reflect on the past year and how it may have impacted your estate plan. If there have been any significant changes, or it’s been a while since you last reviewed your will, now may be a great time to revisit it.
– Stephan Paldino, CPA, Client Service Manager and Christine Laros, CPA, CA, Client Service Manager
2024 might be the right time to explore how AI could have a positive impact on your business. As this resource evolves, more and more applications and implementation ideas are becoming available online. Protecting your data and intellectual property while using AI based applications should be a priority as you venture into these new and exciting waters.
– Greg Rawn, CPA, CA, CBV, Client Service Partner
Recent amendments to Canadian tax law have resulted in more and broader mandatory disclosure requirements. Putting your name (or a family member’s name) on a legal or banking transaction, or a major purchase or sale can result in tax filing obligations. The best way to avoid tax problems is to plan for them, and the best way to do that is to speak with your accountant or financial advisor in advance.
– Andrea Robey, CPA, CA, CFP, Senior Client Service Manager
Try not to get overwhelmed over the holiday season, and if you are going on vacation in the first part of January, remember to pay off your CEBA loan before the new extension period ends (January 18, 2024) in order to enjoy the forgiveness portion of the loan.
– Sherein Salam, Client Service Manager
The Department of Finance managed to outdo itself last year with even more tax changes for 2024. These changes include further amendments to the original Bill C-208 on intergeneration business transfers, changes to Alternative Minimum Tax (AMT), New General Anti-Avoidance Rules (GAAR), Excessive Interest and Financing Expenses Limitation (EIFEL), updates to the Underused Housing Tax (UHT), and all sorts of new trust and transaction reporting requirements. It is crucial that you stay aware and informed of changes as they arise so they do not negatively impact your tax position.
– Simon Sham, MAcc, CPA, CA, Partner – Tax
Make sure your personal, corporate, and HST instalments are paid on time so there is no unnecessary interest being charged. The rate charged by CRA has substantially increased over the past year and is now at 9% per annum.
– Denise Stewart, Senior Client Service Manager
Review any outstanding CEBA debt and—assuming your cashflow permits—pay it off prior to the extended January 18, 2024 deadline. If the outstanding CEBA amount is not fully repaid prior to this deadline, no portion of the loan is eligible for forgiveness (loan forgiveness does not prorate based on the amount repaid prior to January 18, 2024) and the full amount will convert to a 5% term loan due December 2026. Using an example of a company that has borrowed the full $60,000: the cost of not making the final payment by January 18, 2024 would be $20,000 (the planned forgivable portion of the loan) plus interest on the full $60,000 at a rate of 5% per annum until it is repaid, which could be upwards of $9,000 in interest over the life of the term loan. By repaying any balance owing now, you will avoid almost $30,000 incremental cash outflows over the next 3 years.
– Shaun Wilson CPA, CA, Client Service Partner
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S+C Partners is a full-service firm of Chartered Professional Accountants, tax specialists, and business advisors with in-house expertise that extends well beyond traditional CPA services. In addition to audit, accounting, and Canadian tax services, we also offer business advisory services, comprehensive IT solutions, Human Resource consulting, and in-house expertise within highly focused areas such as US taxation, business valuations, and estate planning. We provide all the technical expertise of a large CPA firm, but with the personal touch and partner-level attention of a boutique accounting and advisory firm.