MACH Accounting

𝐌𝐢𝐝𝐝𝐥𝐞‑𝐂𝐥𝐚𝐬𝐬 𝐓𝐚𝐱 𝐂𝐮𝐭𝐬, 𝐑𝐞𝐩𝐞𝐚𝐥𝐞𝐝 𝐓𝐚𝐱𝐞𝐬 & 𝐍𝐞𝐰 𝐂𝐫𝐞𝐝𝐢𝐭𝐬

The 2025 budget delivers both relief and fairness measures. Here are three changes to know:

1. Middle‑class tax cut & top‑up credit – The first marginal personal income‑tax rate falls to 14.5% for 2025 and 14% starting 2026. To prevent the rate reduction from eroding the value of non‑refundable credits, a top‑up tax credit maintains a 15% credit rate on amounts above the first bracket.

2. Repeal of Underused Housing Tax (UHT) and luxury tax – The UHT, which applied to vacant or underused residential property owned by certain non‑residents, will be eliminated starting in the 2025 calendar year. The luxury tax on boats and airplanes ends after November 4 2025, though higher‑end vehicles remain subject.

3. Personal support workers (PSW) tax credit – Recognizing the essential work of PSWs, the budget introduces a temporary refundable tax credit worth 5 % of eligible earnings, up to $1,100 per year, for 2026‑2030. The credit does not apply to amounts earned in British Columbia, Newfoundland & Labrador or the Northwest Territories.

Other notable measures include closing a “double‑dipping” loophole that previously allowed simultaneous claims under the Home Accessibility Tax Credit and Medical Expense Tax Credit, effective January 1 2026, and cancelling the proposed Canadian Entrepreneurs’ Incentive while retaining the enhanced $1.25 million Lifetime Capital Gains Exemption.

𝐀𝐜𝐭𝐢𝐨𝐧: Homeowners should claim both the HATC and METC on qualifying renovations before the end of 2025. PSWs should track eligible earnings to maximize the new credit once it starts in 2026. For investors, the repeal of UHT and luxury taxes may alter the attractiveness of certain assets—discuss these changes with your advisor.

Contact us today to book a free consultation!
Visit us at machaccounting.com | Call us at +1-855-352-5191
Email us: [email protected]

Disclaimer:
This post is general information only and not tax advice. Feel free to save or share this, and contact us if you need assistance getting organized.

MACH Accounting — Professional Accountants & Business Advisors Previously Wharfhouse Business Services. Your partner in financial growth. Discover expert accounting, tax planning, and bookkeeping services at MACH Accounting. We provide personalized solutions for businesses and individuals, ensuring financial success through tailored strategies and modern tools.

𝟐𝟎𝟐𝟔 𝐓𝐚𝐱‑𝐅𝐢𝐥𝐢𝐧𝐠 𝐒𝐞𝐚𝐬𝐨𝐧 – 𝐃𝐞𝐚𝐝𝐥𝐢𝐧𝐞𝐬 & 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐓𝐨𝐨𝐥𝐬

Filing season is here. For your 2025 return you can start filing online as early as February 23 2026. Most individuals must file and pay any tax owing by April 30 2026, while self‑employed individuals (and their spouses) have until June 15 2026 to file, though balances are still due April 30 .

Key changes and tips:

• Reduced tax rate – The lowest federal personal income‑tax rate drops from 15% to 14 % on July 1 2025, making the full‑year rate 14.5 % for 2025. The value of most non‑refundable credits is tied to the lowest rate, so the government introduced a “top‑up” tax credit to maintain a 15% credit rate on amounts over the first bracket ($57,375).

• Digital by default – Beginning in February 2026, the CRA is strengthening account security by requiring a backup multi‑factor authentication (MFA) option, and notices of assessment will be available only online. You can now find your NETFILE access code directly in your CRA account.

• Flexible payment arrangements – Taxpayers with personal or COVID‑related debts of $1,000 or more can set up their own payment plans through the CRA’s online Manage balance service.

𝐀𝐜𝐭𝐢𝐨𝐧: Log in to your CRA My Account now to confirm your credentials, set up MFA backup, and ensure all your slips are available before filing. Filing early helps you avoid the end‑of‑season rush and gives more time to plan for any balance owing.

Contact us today to book a free consultation!
Visit us at machaccounting.com | Call us at +1-855-352-5191
Email us: [email protected]

Disclaimer:
This post is general information only and not tax advice. Feel free to save or share this, and contact us if you need assistance getting organized.

𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧𝐬 𝐏𝐥𝐚𝐧𝐧𝐢𝐧𝐠: 𝐏𝐫𝐞𝐩𝐚𝐫𝐞 𝐟𝐨𝐫 𝟐𝟎𝟐𝟔 𝐚𝐧𝐝 𝐁𝐞𝐲𝐨𝐧𝐝

With capital gains rules in flux, smart planning can save you thousands. Here’s what you need to know about inclusion rates, exemptions and strategies heading into 2026.

𝐊𝐞𝐲 𝐅𝐚𝐜𝐭𝐬

• The inclusion rate for capital gains remains 50 % until 31 December 2025; the previously proposed increase to 66.67 % has been deferred to 1 January 2026.
• Individuals and trusts still receive the half‑inclusion rate on the first $250,000 of net capital gains each year.
• The Lifetime Capital Gains Exemption (LCGE) for qualifying small business shares and farm/fishing property is $1.25 million for 2025 and indexed for 2026; it can be multiplied across beneficiaries via a family trust.
• The Underused Housing Tax has been eliminated for 2025, but earlier years still require filings to avoid penalties.

𝐀𝐜𝐭𝐢𝐨𝐧𝐚𝐛𝐥𝐞 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬

• Consider realising gains before 2026 if you expect the inclusion rate increase to materialise, but balance this against the availability of losses and personal income levels.
• Use family trusts to multiply access to the LCGE and to split income among beneficiaries.
• Keep meticulous records of capital transactions and track your remaining LCGE room; re‑file 2024/2025 returns if you prematurely applied the higher inclusion rate.
• Engage MACH Accounting to model different scenarios and coordinate with your investment advisors.

𝐎𝐩𝐭𝐢𝐦𝐢𝐬𝐞 𝐲𝐨𝐮𝐫 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐠𝐚𝐢𝐧𝐬 — 𝐨𝐮𝐫 𝐭𝐚𝐱 𝐩𝐥𝐚𝐧𝐧𝐞𝐫𝐬 𝐚𝐫𝐞 𝐡𝐞𝐫𝐞 𝐭𝐨 𝐡𝐞𝐥𝐩.

Reach us at 𝟖𝟓𝟓-𝟑𝟓𝟐-𝟓𝟏𝟗𝟏, or 𝐦𝐚𝐜𝐡𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠.𝐜𝐨𝐦/𝐜𝐨𝐧𝐭𝐚𝐜𝐭