Here are the tax changes that will affect your pocketbook in 2024

globalnews.ca:

Canadians preparing their taxes and finances for 2024 might find a bit of help from an unexpected friend: inflation.

Though the rising cost of living tended to cool for much of 2023, still-elevated inflation from the last few years acts as a benchmark for a number of government programs and tax filing metrics.

In other words, after eating away at Canadians’ pocketbooks for a bad couple of years, inflation could pay it forward in 2024.

Here’s what’s new for tax filing, savings contributions and other financial changes in 2024.

Canadians’ marginal tax rates are set for a sizeable inflation adjustment this year.

The Canada Revenue Agency (CRA) uses the index of inflation from the previous year to determine how much tax Canadians pay on different amounts of income in the next year. The higher the limits for each bracket, the less tax Canadians will pay on the corresponding portion of their income.

Since inflation peaked at a 41-year-high in 2022 and was elevated for much of that year, it has a big impact on the 2023 tax year — the one Canadians will be filing for this coming spring.

The federalindexation factor for 2023 was set at 6.3 per cent — a substantial jump from 2.4 per cent in 2022.

After these changes, the 2023 federal tax brackets, divided by income, are as follows:

For the upcoming 2024 tax year, this factor is set to cool slightly to 4.7 per cent.

Individual provinces have their own marginal tax rates, which may or may not be indexed to inflation.

Certain non-refundable tax credits also rise according to inflation, including, beginning in 2024, the basic personal amount (BPA) — how much a filer can earn without paying income tax. The BPA for 2024 will be $15,705 — up from $15,000 last year — though higher-income