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Wall Street Pauses as Fed Meeting Looms: Futures Hold Steady

U.S. stock futures were little changed on Tuesday as investors awaited the start of the Federal Reserve’s final policy meeting of the year. The Dow Jones Industrial Average, S&P 500, and Nasdaq futures all hovered near flat, reflecting a cautious mood across Wall Street. The Fed is widely expected to keep interest rates unchanged, but traders are focused on Chair Jerome Powell’s comments and the central bank’s updated economic projections. Markets are looking for clues on when rate cuts might begin in 2024, with inflation cooling but still above the Fed’s long-term target. Recent gains in equities have been fueled by optimism that the Fed’s tightening cycle is over, yet uncertainty remains about how quickly monetary policy will shift toward easing. Until then, investors appear content to hold their positions, waiting for clearer signals from the Fed before making bold moves.
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5 Tax Changes to Watch Out for in the Upcoming Federal Budget

 

As Finance Minister Chrystia Freeland prepares to deliver the federal budget on April 16, speculation abounds about potential tax changes. While we can’t predict the exact content, let’s explore some possibilities that could impact Canadians. Here are five areas to keep an eye on:

  1. Alternative Minimum Tax (AMT):

    • The AMT ensures that high-income individuals pay a minimum level of tax, even when they claim deductions, exemptions, or credits. Last year’s budget proposed changes to the AMT rules, including raising the rate to 20.5% and broadening the base. Charitable donors should pay attention, as only 50% of the donation tax credit is permitted when calculating the AMT.
    • Tip: Look out for any adjustments to the AMT that affect your tax planning.

  2. Lifetime Capital Gains Exemption (LCGE):

    • The LCGE allows small business owners to shelter capital gains from the sale of qualified shares. Any changes to this exemption could impact entrepreneurs and investors.
    • Tip: Keep an eye on potential alterations to the LCGE limit.

  3. Retirement Taxes:

    • Retirement planning may see adjustments. Watch for changes to Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and other retirement vehicles.
    • Tip: Stay informed about any modifications affecting your retirement savings.

  4. Top Tax Bracket:

    • Currently, the top federal tax rate kicks in at an income of over $246,752. The NDP previously proposed raising it to 35%. Will this idea resurface?
    • Tip: High-income earners should monitor any shifts in tax brackets.

  5. Capital Gains Inclusion Rate:

    • The inclusion rate determines how much of your capital gains are taxable. A change here could impact investors and property owners.
    • Tip: Be aware of any adjustments to the capital gains inclusion rate.

Remember, these are potential changes, and we’ll have to wait for the official budget announcement to know for sure. Stay informed, consult with a tax professional, and be prepared to adapt your financial strategies accordingly. 

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