Tax changes in 2023. What is important for Canadians to know?
Every resident of Canada keeps track of own tax payments, filing returns and calculating interest.
The unstable world situation and high inflation have forced the government to revise tax payments. We've picked up several changes that are important to be aware of when filing your returns in 2023.
On January 1, 2023, tax changes start working:
1. The inflation rate will be 6.3%. Accordingly, federal income tax will increase for 5 categories of income. Tax deductions depend on income:
- $0 CAD to $53,359 CAD would be 15%;
- $53,359 CAD to $106,717 CAD would be 20.5%;
- $106,717 CAD to $165,430 CAD would be 26%;
- $165,430 CAD to $235,675 CAD would be 29%;
- anything above this is taxed at 33%.
Most income tax amounts, as well as all benefits, are indexed for inflation. All benefits from the government will also increase in 2023.
- To avoid penalties, you must file by April 30, 2023.
- Take advantage of all the benefits that the state provides and to which you are entitled;
- Claim any tax benefits you may qualify for;
- Maximize your retirement savings plan, but don't exceed it;
- Maximize your tax-free savings account, but don't exceed the limits.
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