Failing to report your profits from ticket resales, like for Taylor Swift's Eras tour, could come back to bite you if the CRA ever decided to demand information from retail ticket-selling platforms to figure out who has sold tickets.BARBARA DAVIDSON/The Globe and Mail
Now that the new year is here, it’s time to come up with creative ideas to improve your financial life in 2025. My good friend Joel loves fitness and has always wanted to open his own gym. He’s planning to call it “Resolutions.” The concept is simple: bring in the best fitness equipment for members to use for the first three weeks of January, then turn the place into a pub for the rest of the year.
If you’re looking for your own original plans to enhance your tax and financial situation, consider these seven ideas today:
Plan your capital-gains strategy. You’re no doubt aware that an increase to the capital-gains inclusion rate was introduced effective June 25, 2024. The issue, however, is that the bill intended to bring this measure into law has now died on the order paper with Prime Minister Justin Trudeau announcing his resignation this week and a request to prorogue Parliament. The Canada Revenue Agency has said that it intends to administer the tax law as though the changes have been enacted. If you have capital gains realized on or after June 25, 2024, speak to a tax pro about your options for reporting those gains for 2024. Many will decide to report capital gains using the 50-per-cent inclusion rate instead of the new 66.67 per cent one (which only applies to corporations, trusts, and individuals with annual capital gains above $250,000), but waiting to decide until after Parliament is back in session on March 24 is wise since we may have more clarity around the rules at that time.
Get a refund of GST/HST. You might be due to benefit from the temporary GST/HST break on certain items, including some food and beverages, as well as children’s clothing and toys. The break applies until Feb. 15, but some retailers simply haven’t been able to adjust their point-of-sales systems to avoid charging GST/HST. If you’ve paid the tax on items that should have been exempt, you can claim a refund of that GST/HST by filing Form GST189 within two years of paying the tax.
Claim the dividend tax credit. Tax brackets and credits in Canada have been indexed to inflation for 2025. As a result, it’s possible for this coming year to receive eligible Canadian dividends of up to $53,375 (actual, not grossed-up) in your taxable investment accounts completely tax-free if you have no other source of income, because of the dividend tax credit. Eligible dividends from your private company can also qualify for this treatment. You should be aware, however, that dividends are grossed-up when reported on your tax return, and this grossed-up amount could affect the level of Old Age Security benefits you’re entitled to receive.
Make a donation for 2024 today. Given the Canada Post strike that took place at the end of 2024, the government announced on Dec. 30 that it’s extending the 2024 charitable donation deadline to Feb. 28. If you didn’t get around to making charitable gifts before year-end, make those today.
Be aware of secondary suite issues. The government has introduced different incentives to encourage Canadians to build secondary suites in their homes. There’s the multigenerational home renovation tax credit (providing cash tax savings of up to $7,500 on $50,000 of renovation costs if you build a second suite for a qualifying family member), and the Canada secondary suite loan program (announced Dec. 10 and set to be available early this year, you can borrow up to $80,000 for 15 years at just 2 per cent to add a qualifying secondary suite). Here’s the problem: Building a secondary suite that will be occupied by someone other than you, your spouse or child will generally disqualify that portion of your residence for the principal residence exemption. This might have been an oversight when the rules were drafted, and in my view, this needs to be fixed as soon as possible.
Report your Taylor Swift profits. I need two hands to count the number of people I know who bought tickets to see Taylor Swift but ended up selling them when they realized how much profit could be made. One friend bought two tickets for $600 and ended up selling them for $6,000. Much can be said about how these profits should be taxed (as a capital gain or business income), but that’s a topic for another day. For now, just realize that failing to report your profits could come back to bite you if the CRA ever decided to demand information from retail ticket-selling platforms to figure out who has sold tickets.
Take advantage of SimpleFile. If you or a family member have income below a certain threshold (based on factors that include age, province of residence and disability status), you may qualify to have the CRA file your tax return on your behalf by phone, digitally or by collecting some information from you in paper format.
Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at tim@ourfamilyoffice.ca.
