Timely and relevant tax information is especially important in our ever-changing world. This overview of key changes (federal) will help you stay up-to-date.
Tax-free savings account (TFSA)
For 2015, the annual TFSA contribution limit increased from $5,500 to $10,000 and will no longer be indexed. However, starting in 2016, the new government announced that the contribution limit for TFSA will be reduced back to $5,500 per year.
Family tax cut (income-splitting) tax credit
Starting 2014, families with children under 18 years can claim a non-refundable tax credit equal to the federal tax reduction that would result if up to $50,000 of taxable income were transferred from one spouse to the other, to a maximum credit of $2,000.
Child care expenses
Maximum amounts that can be claimed for child care expenses for each child will increase as follows:
Child tax credit
This credit is repealed after 2014. Instead, starting 2015, parents will receive Child Care Benefit monthly payments of $160 (up from $100) for each child under six and a new $60 monthly benefit for children age six to 17.
Children's fitness tax credit
This credit was doubled to a maximum of $1,000 of eligible expenses starting 2014, and is replaced with a 15% refundable tax credit, starting 2015.
Lifetime capital gains exemption (LCGE) for farm or fishing property
The maximum LCGE for capital gains realized on the disposition of qualified farm or fishing property will:
Automobile deductions and benefits
The 2015 prescribed rates for automobiles for purposes of determining tax-exempt allowances are 1 cent per kilometre higher than for 2014. All other 2015 prescribed rates will remain at the same level as 2014.
Home accessibility tax credit
Eligible individuals who spend up to $10,000 on eligible expenditures in respect of qualifying individuals can claim a non-refundable tax credit of up to $1,500, starting 2016. Eligible expenditures for an eligible dwelling include certain renovations or alterations that increase mobility or safety.
Registered retirement income funds (RRIF)
Starting 2015, the minimum annual withdrawal amount for RRIF holders age 71 to 94 will be reduced. RRIF holders who have already withdrawn more than the 2015 minimum amount can recontribute the excess until Feb. 29, 2016, and deduct it in 2015.
Retirement savings plans, DPSP and RPPs
Contribution limits for RSP and DPSP will increase whiled the maximum pension benefit that can be paid from these plans will increase too.
Registered Disability Savings Plans (RDSP)
A previously introduced measure, to allow certain family members to temporarily be the RDSP holder for an individual who is unable to enter into a contract, is extended to the end of 2018.
Talk to us today, and we would certainly help you with your tax and filing needs (867-334-8634 for Whitehorse and 604-369-1868 / 778-952-8255 for Burnaby-Vancouver).