Canada’s income tax brackets for 2024, plus the maximum tax you’ll pay based on income + MORE Apr 16th

As the year winds down, you may be wondering just how much tax you’ll be paying once you file your 2024 income tax return. Especially if you changed jobs or earned self-employment income, there may be a big difference between the taxes you’ve already remitted through payroll deductions or installments and your final settlement in the spring.

Indeed, having a sense of your taxes owed or owing can inform strategies you can deploy right now to minimize your final bill or enlarge your refund, such as contributing more to your registered retirement savings plan (RRSP) or first home savings account (FHSA) or making a meaningful donation to a deserving charity sooner rather than later.

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Canadians love their real estate and they love renting their properties to make some extra money. However, that comes with some tax audit risk and the need to stay in the know of current tax law. Here’s what you should be thinking about for your 2024 and 2025 income taxes, as well as the forms you may need.

What do you claim? Rental income or business income?

When you earn income from the rental of a home, apartment, condo or other property, you will report both gross and net income on the T1 tax return using Form T776 (Statement of Real Estate Rentals). But, sometimes the T2125 (Statement of Business Income and Expenses) can be used if you are considered to be “in business” as opposed to owning an asset from which you derive “income from property.”

Which one should you claim? It’s a fine line.

In general, though, the more services provided (board and lodging, security and cleaning services, and so on), the more likely it is that you’re in “business.” Alternatively, if you provide only basic services like heat, light, parking and laundry facilities, you’re reporting rental income rather than business income…