Important Update
As of May 2025 Business Direct is now under new ownership!
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Every effort is being made to ensure the client experience during this transition is as seamless as possible. We continue to operate with the same focus on quality, reliability, and attention to detail.
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Thank you for your patience and support during this transition. Business Direct looks forward to continuing to work with you. For any questions, please contact Sarah at sarah@businessdirect-taxservice.ca.
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We continue to service all provinces/territories in Canada, except Quebec.
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Tax News
IMPORTANT TAX BREAKS AND CREDITS YOU CAN CLAIM
Although the CRA hasn’t introduced any new tax credits this year, these are some of the most common tax breaks you may want to discuss with your accountant or tax preparer to help you save more on your taxes.
Basic personal amount
The basic personal amount (BPA) for the 2025 tax year is $16,129. This non-refundable tax credit can be claimed by all taxpayers and is an excellent way to reduce (or even eliminate) your income taxes.
Taxpayers who earn less than $16,129 are exempt from paying federal income taxes since their total annual income is below the threshold. Those who earn more than $16,129 can use the basic personal amount to reduce their total tax liability.
If you earn $60,000, for example, you can subtract the $16,129 BPA and will only be taxed on the remaining $43,871.
Homebuyers
Introduced in 2009, the Homebuyers’ Amount allows disabled and/or first-time home buyers to claim a non-refundable tax credit of $10,000, provided they purchased a qualifying home that falls into one of these categories:
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Single-family house
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Condominium
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Semi-detached house
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Mobile home
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Apartment in duplex, triplex, fourplex, or apartment building
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Townhouse
If you’ve recently purchased a home and have not applied for this tax break before, you can also file for it retroactively. For homes purchased in 2021 or earlier, you can claim a $5,000 credit, and for homes purchased in 2022 or 2023, you can claim the full $10,000 credit.
Work from home expenses
The percentage of Canadians working from home has tripled since 2010, according to a report from Statistics Canada. While working from home comes with a number of perks and benefits, it also comes with increased home office expenses.
As a small business owner, you can write off a number of home office expenses. However, employees who work from home can also get credit for their extra expenses, including:
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Utilities (electricity, heat, water)
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Home internet fees
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Rent paid for your home
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Maintenance and repair costs
In late January 2024, the CRA will be releasing an updated home office expense sheet to make calculating your deductions easier. If you work from home, be sure to keep an eye out for it.
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Moving expenses
In 2023, many Canadians moved away from more expensive city centres like Vancouver and Toronto to reduce their cost of living.
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The good news is that if you moved more than 40 kilometres away and moved to accept a new job, work position, or school, you can deduct many of your associated moving costs.
Major changes to taxes for 2025
On July 1 2025 the federal government reduced the tax rate for the lowest tax bracket from 15% to 14%. This reduces taxes paid on your first $57,375 of income.
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As of January 1, 2025, Ontario imposed a new $200 annual tax on electric vehicle owners to account for their wear and tear on roads since they don't pay fuel tax.
The federal non-refundable tax credit for digital news subscriptions is no longer available as of 2025.
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The Canada Disability Benefit was launched in June 2025 for Canadians with disabilities between the ages of 18-64. Eligible individuals can receive up to $200 per month ($2,400 per year), provided they qualify for the Disability Tax Credit (DTC).
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If you have a Registered Retirement Savings Plan (RRSP), you can contribute up to 18% of your previous year's income, to a maximum of $32,490 in the 2025 tax year, up from $31,560 in 2024.
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The Canada Child Benefit will increase by two per cent. The base amount for children under six is $8,157 annually, up from $7,997 in 2025. The base amount of children over the age of six is $6,883, up from $6,748 in 2025. The adjusted family net income at which the CCB is reduced begins is $38,237 for 2026, up from $37,487 in 2025.
Federal income tax brackets​
The 2026 federal income tax brackets have been adjusted for inflation and include the Middle Class Tax Cut introduced in July of 2025.
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Income under $58,523 will be taxed at 14%.
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Incomes from $58,523 to $117,045 will be taxed at 20.5%.
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Incomes from $117,045 to $181,440 will be taxed at 26%.
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Incomes from $181,440 to $258,482 will be taxed at 29%.
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Incomes of $258,482 and over will be taxed at 33%.
Increase in maximum pensionable earnings (CPP)
The maximum pensionable earnings for CPP will increase from $68,500 to $71,300, which will result in a $166.60 CPP tax increase for both employers and employees in the 2025 tax year. In 2024 the CRA introduced the CPP enhancement, a second tier of CPP contributions. The maximum pensionable earnings for the CPP enhancement will increase from $74,60 to $85,000, which will result in a $416 CPP tax for both employers and employees.
Increase Employment Insurance (EI) tax rate
In 2026, both employees and employers will be subject to higher EI taxes. Employees will pay a total of $1,123.07 in EI taxes with a maximum of insurable earnings of $65,700, which is a $45 increase from the 2025 tax year.
Carbon tax
On April 1, 2025, the Government of Canada removed requirements for provinces and territories to have a consumer-facing carbon price. This ended the Federal Fuel Charge, and will end the quarterly Canada Carbon Rebate payments. Elligible Canadians will receive their final payment in April 2025, or whenever they file their 2024 tax return. No future CCR payments will be made for tax returns filed after October 30, 2026.
What is the best way to take advantage of tax breaks?
Thanks to free and low-cost e-filing software, filing your taxes has never been easier. However, the downside is that many taxpayers fail to take full advantage of tax credits.
The easiest way to make sure that you’re getting all the breaks you’re owed is to enlist the help of a trusted accountant or tax preparer. However, if you’re filing yourself, you can still prepare by reading up on all of the major tax credits and using a trusted tax filing software that will help guide you through all of your potential deductions.