Taxes change every year, and 2025 is bringing several updates that business owners need to prepare for. Understanding these changes now will help you avoid unexpected costs and keep your business on track. Here’s a breakdown of the most important tax updates and what you can do to stay ahead.

1. CRA is Switching to Digital Mail

Starting in spring 2025, the Canada Revenue Agency (CRA) will send most business tax notices online through My Business Account instead of mailing paper copies.

How to prepare:

• Make sure your My Business Account is active and up to date.

• Add an email address so you receive notifications when new mail arrives.

2. Capital Gains Tax Changes

If you sell business assets, you may owe more taxes than before. A new rule means a bigger portion of your profit from selling assets will now be taxable.

Key points:

• The rule applies to capital gains made on or after June 25, 2024.

• New tax forms will be available by January 31, 2025.

If you plan to sell an asset, talk to a tax expert to see how this change affects you.

3. Higher CPP Contributions

The maximum pensionable earnings for Canada Pension Plan (CPP) contributions will increase in 2025.

New limits:

• Regular maximum earnings: $71,300

• Additional maximum earnings: $81,200

If you own a business, make sure your payroll system is updated to reflect these new amounts.

4. New Rules for Trusts

The CRA has updated reporting rules for certain trusts.

• Bare trusts will not need to file a tax return for 2024 unless the CRA requests it.

• Other types of trusts must still follow the new reporting rules.

If your business deals with trusts, check to see if these changes affect you.

5. Stricter Rules for Short-Term Rental Deductions

Businesses that run short-term rentals must comply with local and provincial rules to claim tax deductions. If your business rents properties, check the latest regulations to make sure you are eligible for deductions.

6. CRA Online Service Improvements

The CRA is making updates to My Business Account to improve online services. These changes include:

• Better navigation for checking balances, payments, and tax rulings.

• Email notifications when payments are received.

• New tools for research and tax credits.

7. Changes to T4 and T4A Slips for the Canadian Dental Care Plan

If your business does not provide dental coverage, you can now leave the related sections of T4 and T4A slips blank without facing penalties.

Take Action Now

Tax laws can be confusing, but getting ahead of these changes will help your business stay compliant and avoid unnecessary costs. Competitive Edge Business Solutions is here to help with expert advice and financial planning.

Need help preparing for tax season? Contact us today.