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What's New by Month in 2015
The Life in the Tax Lane video for January discusses the 2016 federal tax rate changes, donation tax credit rate change for high income taxpayers, revised Tax Free Savings Account contribution limit, and change in tax rate for corporate investment income, as well as the proposed Canada Child Benefit.
Investing is a life-long pursuit that will help you achieve financial independence. We think that the best way to start investing is through buying ETFs.
The TD1 forms for 2016 are now available from Canada Revenue Agency. If there have been changes which will affect your tax exemptions (see our article), you should ensure that you complete these forms so that your employer (or other payer) will deduct the appropriate amount of income tax from your employment income or pension income. New employees should always complete these forms. For those working only part time, if your total income for the year will not exceed your exemptions, you should tick the appropriate box on the back of the form, so that your employer will not deduct any income tax from your pay cheques.
The per-kilometre amounts that may be paid tax-free to employees or officers as reimbursement for motor vehicle expenses incurred while travelling for business purposes using their personal vehicle have been reduced by 1 cent for 2016, to 54 cents per km for the first 5,000 km and 48 cents per km for each additional km. For the Territories, the rates have also been reduced by 1 cent, to 58 cents per km for the first 5,000 km and 52 cents per km for each additional km.
The prescribed rate used to determine the operating cost taxable benefit to an employee for an employer-owned vehicle is reduced for 2016 by 1 cent, to 26 cents per kilometre. The standby charge taxable benefit factors for automobiles remain unchanged.
The prescribed rate used to determine the operating cost taxable benefit to an automobile sales person for an employer-owned vehicle is reduced for 2016 by 1 cent, to 23 cents per kilometre. The standby charge taxable benefit factors for automobiles remain unchanged.
The 2016 expense limitations for passenger vehicles for interest expense, monthly lease costs, and capital cost allowance (CCA) will remain unchanged from 2015.
If you made RRSP contributions from March 1, 2014 to March 1, 2015, this should have been included on Schedule 7 which was filed with your 2014 tax return. Check our article to find out what to do if the contribution wasn't recorded.
Many brokerages are now providing registered accounts denominated in US dollars, which eliminates the significant cost of converting US dividends to Canadian currency.
The 2015/2016 Quebec Tax Calculator is a great planning tool - use it to see if you should be deferring income to 2016 due to the reduced federal tax rates for middle income.
See the big difference in taxes payable on different types of investment income. Even when the age credit and Old Age Security are clawed back, Canadian dividends and capital gains result in the least taxes payable when compared to other types of income such as foreign dividends and interest.
The previously planned increase in the HST rate from 13% to 15% effective January 1, 2016 has been cancelled.
Legislative proposals were introduced on December 7th that would enact for 2016 the middle-income tax rate reduction and the high-income tax rate increase, cancel the Family Tax Cut, revise the TFSA limit to previous levels (but leave 2015 at $10,000), increase the donation tax credit rate (but only for high income earners), and other provisions for CCPCs related to the new highest tax rate.
The Life in the Tax Lane video for December includes discussion of possible changes coming for Professional Corporations, audits of owner managed companies, related to the Small Business Deduction, Gifting Tax Shelters where even the cash donation was disallowed, Standby Charge of employer-branded vehicles, and a poor review for Revenue Quebec from the Quebec Ombudsman.
Compare taxes and marginal tax rates for both types of Canadian dividends, capital gains, and other income, for all provinces and territories, for 2011 to 2016.
We've added 2016 to the calculator - based on our calculations of indexation factors, and based on Liberal platform. We should be able to verify indexation factors and much other 2016 data soon.
Haven't filed your 2005 tax return yet? Taxpayers are running out of time to file requests under the taxpayer relief provisions for the 2005 tax year and any reporting period that ended in the 2005 calendar year. As a result of a Federal Court of Appeal Case, Bozzer v Canada, the taxpayer relief provisions (fairness provisions) can apply to reduce interest and penalties which have accumulated in the 10 taxation years preceding the request for leniency, even if the tax debt causing the interest arose prior to that period. So, if a tax debt arose from the 2003 tax year, penalties and interest that have accumulated from 2005 to 2015 could still be reduced as a result of a 2015 request for leniency.
If you turned 71 this year, your RRSP must be converted to a RRIF, or used to purchase an annuity, by Thursday December 31st, 2015. If you turned 65 this year, you may want to convert some of your RRSP to a RRIF before December 31st, to take advantage of the pension income tax credit, and perhaps pension splitting with your spouse.
There is no deadline for contributions to a TFSA, as the unused contribution room is carried forward into the next year. However, a withdrawal in any year increases the TFSA room in the following calendar year. Thus, if you are thinking of making a withdrawal soon, make sure it is done by December 31st, in order to have your TFSA room increased by the withdrawal amount on January 1, 2016.
The last trading date in 2015 for Canadian publicly traded stocks is Thursday December 24th, because the Canadian stock markets are closed on December 25th and 28th. Canadian stocks purchased or sold after this date will settle in 2016, so any capital gains or losses on sale will apply to the 2016 tax year. The last trading date in 2015 for US publicly traded stocks is Monday December 28th.
Have you had your farm status revoked, or are you considering applying for farm status? Best to read this article and the Classification of Land as a Farm Regulation, and pay little attention to the BC Assessment Guide.
The maximum insurable earnings for Quebec is $50,800 for 2016. The employee rate is 1.52%, reduced from 1.54% in 2015. The employee maximum EI is $772.16, and the employer maximum is $1,081.02.
The maximum pensionable earnings for QPP for 2016 is $54,900. The rate increases from 5.25% to 5.325%, 10.65% for self-employed. This results in maximum QPP contributions of $2,737.05 for employees/employers, or $5,474.10 for self-employed.
We have confirmed the 2015 WITB amounts to Canada Revenue Agency's numbers, which resulted in revisions to some of our previous estimates.
Alberta's Bill 4 has been tabled, changing the dividend tax credit rate for non-eligible dividends for 2016 and later years. The effect of the legislation is that the tax credit will remain at 3.1% of the taxable dividend. The Alberta 2016 marginal tax rates have been revised to reflect the change.
The marginal tax rates for 2016 for non-eligible dividends have been revised to reflect the change as per Bill 4.
The maximum pensionable earnings for 2016 will be $54,900, up from $53,600 in 2015. The rate will remain unchanged at 4.95%, 9.9% for self-employed. This results in maximum CPP contributions of $2,544.30 for employees/employers, or $5,088.60 for self-employed.
Revenu Quebec has published a document detailing upcoming changes to the Solidarity Tax Credit.
Capital gains can be eliminated by donating capital property, such as securities, to charitable organizations which are qualified donees. This should be done by November or very early December to avoid the busy season and ensure the transactions are completed before year end.
The new Liberal government included in their platform the reversal of the increased contributions for TFSAs. We expect this would mean replacing the $10,000 limit with the previous $5,500 limit.
If you have capital losses carried forward and unrealized capital gains, and are not going to be collecting your OAS pension for a year or so yet, you may be able to do something now to avoid or reduce an OAS clawback in the future.
The 2016 tables of non-refundable tax credits for all provinces (except Quebec) and territories are now available. We've eliminated the education and textbook tax credits, as per the Liberal platform. This automatically eliminates these credits in all provinces (except Alberta) and territories, due to the wording of their legislation. The amounts in the tables are indexed, using indexation factors that are our calculations. Most of the amounts will be confirmed when Canada Revenue publishes the 2016 TD1 forms.
We've published the tables of marginal tax rates for 2016. The Federal tax rates for 2016 are as stated in the Liberal platform. As usual, the indexation factors and increases to tax brackets are our calculations, and will be confirmed when Canada Revenue Agency publishes their 2016 payroll tables.
Alberta announced a new Alberta Child Benefit (ACB), enhanced Family Employment Tax Credit (AFETC), new Job Creation Incentive Program, and tax increases for tobacco, insurance and locomotive fuel.
The November issue of Life in the Tax Lane includes information on medical travel expenses; the requirement for withholding tax when payment is made to non-residents; international tax planning vs tax evasion; the collections power of CRA; Foreign Account Tax Compliance Act (FATCA); and a BC Supreme Court case regarding the tax liability of a former spouse.
The Liberal Party was elected with a majority government on October 19, 2015. We've summarized much of the information from their platform, hopefully addressing most or all of the tax-related points.
The 2014/2015 calculator will now retain all data entered, on your computer, for the next time you use it. If you are on a public computer or don't want this to happen, simply click the reset button before closing the calculator.
Our table of federal debt now includes more years, and includes information on which party was in power during the years shown.
Another Ontario taxpayer has successfully appealed the limit on the attendant care expenses claimed as medical expenses, and has very kindly provided us his (sanitized) documentation in order to help more taxpayers affected by this issue. We have asked CRA to correct their documentation on this.
The Alberta 2015 Budget will be tabled on Tuesday, October 27, 2015.
Both barter and BitCoin transactions can result in taxable income and GST/HST and provincial sales taxes payable.
Alberta's probate fees were increased May 1, 2015.
If a Registered Education Savings Plan beneficiary is a non-resident at the time of receiving Educational Assistance Payments (EAP), the Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB) portions of the EAP will not be paid.
This non-refundable tax credit, new for 2016, allows a senior or an individual eligible to claim the disability amount tax credit, or certain supporting individuals, to claim a tax credit of 15% of up to $10,000 of expenses per year for costs incurred to improve the mobility of the person in and around their principal residence.
This tax credit is available for those who have custody and control over a person with a physical or mental infirmity. The person need not be eligible for the disability amount tax credit, but a signed statement from a medical doctor is required to support the infirmity.
After much thought and discussion, we have made the decision to discontinue the Business Directory. We’ll be removing it from TaxTips.ca at the end of September. Unfortunately, trying to keep it current just takes too much time away from the development of useful content for TaxTips.ca. We considered charging for the listings, but this still leaves the problem of the Directory taking up too much time. We have sent emails to all Business Directory clients to extend our apologies.
Our probate fees by province have all been checked and updated if required. Changes have been made to NL, NS and QC.
Employers and employees should be aware of minimum wage rates and current employment standards. BC's minimum wage increased Sep 15th, and increases are coming on Oct 1st for AB, MB, NL, ON, and SK.
The October issue of Life in the Tax Lane from the Video Tax News team is now available, with a discussion of select recent developments in Canadian tax. This issue includes several interesting topics including denial of a request for an extension to file a notice of objection when a person moved out of the family home and the ex-spouse did not pass on a CRA notice of assessment subsequently received in the mail. Make sure you let CRA know when you move, and use My Account!
The RRSP/RRIF Withdrawal Calculator allows you to put in an estimated inflation rate. To help with this, we've added the historical Consumer Price Index inflation rates for the past several years, on the calculator information page.
Many people have received emails or phone calls this year from someone claiming to be from CRA. CRA will not request payments by credit card, and will not send email with a link and ask you to divulge personal or financial information. If you have received a call and are in doubt, either phone CRA (look in our Links page for a link to telephone numbers) or check your information in CRA's "My Account".
The maximum insurable earnings (YMPE) for 2016 is $50,800, up from $49,500 in 2015. The rate does not change in 2016.
Do you qualify for the Disability Tax Credit? See our article, which explains the requirements to qualify for this tax credit. We have a link to very detailed information on the Canada Revenue website, which describes qualifying impairments, in text and video format. If you have qualified for this credit for a number of years but have not claimed it, adjustments to your tax returns can be filed to claim it for up to 10 years.
Financial hardship unlocking, one of the several unlocking methods available for federally locked-in accounts, can be done 1x per year unless the maximum is not withdrawn - then a 2nd unlocking can be done but only within 30 days of the 1st unlocking.
The superficial loss rules provide a method for capital losses to be transferred to a spouse. Your spouse must hold the shares for more than 30 days after your disposition of the shares for this to work, so to do this for 2015 you should act fairly soon.
We're pleased to be able to share informative videos from the Video Tax News Team. The videos are 10-minute rapid-fire discussions of recent developments in Canadian tax. They cover a wide range of topics, and are quite entertaining! The September video is now available.
You can use your RRSP funds to help build or buy a home - make sure you know the rules.
Excess contributions can be costly, so make sure you calculate your TFSA unused contribution room correctly. We've added an example to help you out.
There are many tax issues for students and/or their parents, such as eligibility for tuition, education and student loan interest tax credits, private school tuition fees, deducting moving expenses, and child care expenses.
There will likely be a fee from your financial institution/brokerage to transfer your TFSA to a new one, but at least the transfer doesn't count as a withdrawal. There may also be a fee to make a full withdrawal from your TFSA. Make sure you know what fees would be involved before liquidating the investments for a full withdrawal.
We've updated our tables which show how much can be earned in Canadian eligible or non-eligible dividends without attracting income tax, when the dividends are the only income earned.
We compare taxes paid on varying levels of employment income for all provinces/territories, for a single person, and for a family with 2 children. Ontario, Alberta and BC are the lowest tax provinces for a single person earning $50,000. For a single income family with 2 kids aged between 6 and 17, and $50,000 employment income, Saskatchewan is the lowest tax province. Income from UCCB is included in the analysis, as well as the Family Tax Cut. Taxes include BC MSP premiums, ON Health Premium, and QC health contribution and prescription drug premiums.
See the taxes paid at varying levels of eligible and non-eligible dividends and interest for all provinces and territories. The lowest-tax provinces for higher levels of eligible dividends are AB and SK. AB is the lowest-tax province at $100,000 of non-eligible dividends.
We compare taxes paid in each province/territory by a senior with eligible dividends vs other income (foreign dividends, interest, etc.) - see how the taxes (including OAS clawback) are significantly lower with eligible dividends.
The Quebec Tax Calculator (également disponible en français), is now up to date, including revised prescription drug plan premiums. The change to the federal Family Tax Cut regarding spousal transfers of tuition and education tax credits, retroactive to 2014, is also included.
The WITB is a federal refundable tax credit for low income individuals and families with working income over a base amount of $3,000 for most provinces and territories. Our tables of 2015 factors are now available.
Want to know what the future value will be of an amount invested today, or what rate of return is required to achieve a desired future value? This calculator can help you answer those questions and more.
Should you borrow to invest in RRSPs? Our calculator provides 4 alternatives, 2 of which don't involve borrowing, so you can see what the results would be. If you've never invested before, don't start by borrowing for RRSPs!
The CPP Retirement Pension Calculator can help you decide at what age to start receiving your CPP. You'll need your CPP Statement of Contributions for this.
On July 31, the Federal government released draft legislative proposals for consultation. The proposals relate to personal and business income tax, charities, international taxation, and Canadian exploration expenses.
Free in 30 is a plan to help you go from having nothing to being financially independent in 30 years or less. Live below your means and borrow to invest, never to consume!
If you are having problems with a service being provided by Canada Revenue Agency, there are steps you can take, and there is a Taxpayers' Ombudsman you can contact.
The detailed Canadian Tax and RRSP Savings Calculator, which includes most deductions and tax credits, has been updated for the increased 2015 Alberta personal income tax rates enacted in June. The change to the Family Tax Cut for spousal transfers of tuition and education tax credits, retroactive to 2014, is also included.
The Basic Canadian Tax Calculator has been updated for the increased 2015 Alberta personal income tax rates. This calculator displays the taxes payable and marginal tax rates for the amounts of Canadian eligible and non-eligible dividends, capital gains and other income that is entered, as well as the taxes payable for the current and past 5 years for the same income.
The Investment Income Tax Calculator, which includes the increased 2015 Alberta tax rates, demonstrates the big difference in taxes payable depending on the type of income. It shows that, even if the Old Age Security is clawed back due to Canadian dividends, the net tax payable will be much less than with interest or "other" income.
The TFSA vs RRSP Calculator has been updated for the increased 2015 Alberta tax rates. This calculator may help you decide between investing in TFSAs or RRSPs. If you're in the lowest tax bracket, choose TFSAs.
The Borrow to Invest Calculator now includes the increased 2015 Alberta tax rates. This calculator helps you to see the advantages of borrowing to invest in stocks and exchange traded funds (ETFs). However, if you've never invested, don't start by borrowing!
The RRSP vs Mortgage (or other loan) calculator, which includes the increased 2015 Alberta tax rates, helps you to decide whether to increase your monthly loan payment, or contribute the extra monthly amount to an RRSP. When in doubt, pay down your debt!
The Alberta general corporate income tax rate was increased from 10% to 12% effective July 1, 2015. The small business tax rate remains unchanged at 3%.
Bill 2 received Royal Assent on June 29, 2015, enacting higher personal tax rates for high income earners, effective October 1, 2015.
Several provinces provide rebates for fuel-efficient or electric vehicles, and there is a Canadian excise tax of up to $4,000 on the most fuel-inefficient vehicles. Natural Resources Canada provides lists of the most fuel-efficient vehicles.
The PEI budget announced that the threshold would be increased for the 2015 tax year. The amounts of the credit have also been increased, and now include an amount for seniors.
This tax credit is available for the 2015 and later tax years, and provides a tax credit of 10% of eligible renovation expenses, to a maximum of $1,000.
Generally, when the fiscal year is less than 12 months, the capital cost allowance for the year must be prorated. There are exceptions.
Naming a successor holder for a TFSA and a beneficiary for your RRSP can help to avoid probate fees. Joint ownership of assets is also helpful, but care must be taken to put into writing the intentions of the joint tenancy.
See our Business page for articles for self-employed people and incorporated businesses - taxes, expenses, employees, payroll, keeping records, whether to incorporate, and many other topics.
When all employees pay their own premiums for disability insurance, any benefits to the employee from the insurance in the future will be tax-free.
A TFSA can invest in almost all the same investments as an RRSP. With interest rates so low, it's best to invest in equities (stocks) in your TFSA.
If you have children under 18 for whom you have not previously applied for the UCCB or the Canada Child Tax Benefit (CCTB), you will need to apply for the enhanced UCCB. Application can still be made anytime to receive the benefit, which is retroactive to January 1, 2015. For applications received after May 15, 2015, the first payment will be later than the July 20, 2015 UCCB payment date.
The 2015 budget received Royal Assent on June 23, 2015. This means that the proposed tax changes which affected the 2015 taxation year are now in effect, including changes to RRIF withdrawal factors, TFSA maximum contributions, increased Universal Child Care Benefit, and other changes.
You may want to know, prior to the end of the year, approximately what your total income tax, CPP and EI costs will be for the year. Perhaps you would like to check the deductions on your payroll cheque to ensure that they are accurate. There are free calculators available for these purposes.
Threshold for low income tax reduction increased and basic credits adjusted for more tax relief. Tobacco taxes increased.
Before investing in an RESP, know the facts. There may be a better way to save for your child's education.
The ACES Plan will contribute $500 to the RESP of children born to Alberta residents between Jan 1, 2005 and Mar 31, 2015, with $100 grants payable to children who turn 8, 11 or 14 between Jan 1, 2015 and Mar 31, 2015. Applications must be submitted by July 31, 2015.
Some vehicles are not considered passenger vehicles, and don't have expense limitations. Corporations expense motor vehicle costs differently from unincorporated businesses. Employer provided parking may be a taxable benefit to employees. Benefits from the personal use of an employer's vehicle are included in the employee's taxable income, but a tax-free per kilometre allowance can be paid to an employee for business use of their vehicle. Trip logs are required when a vehicle is used for both business and personal use, and expenses must be tracked for the entire year!
It's possible that a private health care plan is not financially worthwhile for you, especially if it doesn't cover your pre-existing medical conditions. If you are leaving a job with health coverage, see if you can continue the coverage without a lapse so that your pre-existing conditions will be covered.
If you are receiving Old Age Security, you may be eligible for GIS, depending on your income. However, you have to apply in order to get GIS.
Registration is required to receive BC PharmaCare benefits. Every BC resident should register, even if they would currently receive no benefits, because if income drops or prescription costs increase, they will already be covered.
BC Medical Services Plan (MSP) - Reduced Premiums Based on Net Income
If your adjusted family net income was $30,000 or less in 2014, you should be applying for reduced premiums for your MSP. Net income is reduced by $3,000 for each senior, child under 18, or disabled person, to calculate adjusted net income. You won't get reduced premiums without applying. If you are a financial planner, accountant or tax preparer in BC, please make sure your clients know this!
It's important to keep a record of the adjusted cost base of your primary home as well as a cottage or 2nd home, in order to be able to calculate the gain on sale.
Now is the time to get organized, and start planning so that you are prepared to file your tax return next year without too much difficulty.
See our page of topics and resources for seniors, including government benefits, services and programs, and income tax information.
Effective July 1, 2015, feminine hygiene products such as sanitary napkins, tampons, etc. will be zero-rated for GST/HST. This means that no GST/HST will be charged when these products are purchased. Zero-rated products are still included as taxable sales when calculating whether a business has reached the small supplier threshold.
To qualify as a principal residence, a property does not have to be the place where the taxpayer lives all the time, as long as it is occupied at some time in the year by the taxpayer, taxpayer's spouse, common-law partner, or child.
The income tax varies greatly depending on the type of investment income you earn, whether Canadian eligible or non-eligible dividends, capital gains, or other income such as interest or foreign dividends.
Wages paid to some shareholders and family members are not insurable, and these employees cannot collect employment insurance benefits. Some other types of earnings are also not insurable.
Do you know your rights and responsibilities as an employee or employer? Learn about labour laws, including minimum wages rates, vacation and statutory holiday entitlement.
RRSPs must be converted to RRIFs by the end of the year in which the holder turns 71, but they can be converted earlier. Converting some of your RRSP at age 65 allows you to take advantage of the pension income tax credit, and pension splitting with a spouse. If making regular withdrawals before age 65, you may save fees by converting to a RRIF.
An "in kind" withdrawal is a withdrawal of investments. The total withdrawal amount will include the market value of the investments, plus applicable withholding tax.
We've added a table of the donation tax credit rates for 2015. Usually the rate for the first $200 of donations is the lowest personal tax rate, and the rate for donations over $200 is the highest personal tax rate. However, this is not always the case.
The deadline is May 15th, 2015, for applications to receive the enhanced UCCB. If you have children under 18 for whom you have not previously applied for the UCCB or the Canada Child Tax Benefit (CCTB), you will need to apply for the enhanced UCCB.
The Canadian Tax Calculator has been updated for changes from 2015 budgets that have been tabled thus far. Other calculators that have been updated include the Basic Tax Calculator, TFSA vs RRSP (new TFSA limit, revised RRIF factors), Borrow to Invest, Investment Income Tax, and RRSP vs Mortgage.
The NL 2015 tax rate tables have been updated for the 2 new high-income tax brackets.
2 new high income tax brackets/rates effective July 1, 2015; HST to increase for 2016; Residential Energy Rebate program ending; Financial Corporations Capital Tax rate increase.
Manitoba 2015 Budget - April 30, 2015
Seniors' School Tax Rebate increased and expanded, new Volunteer Firefighter and Search and Rescue Tax Credit, Primary Caregiver Tax Credit increased, Small Business Limit increased, tobacco sales tax increased, business tax credits enhanced and extended, capital tax rate increase.
You still should file that tax return on time, to avoid late-filing penalties!!
Tax filing due date has been extended to May 5th in an April 28th announcement by CRA.
CRA has announced that the increase in the maximum contribution to a TFSA effective for 2015 and later years can be acted on immediately, even though the legislation is subject to parliamentary approval. The $10,000 limit will not be increased for indexation in future years. If you were age 18+ in 2009, have filed your tax returns, and have never contributed, your contribution room is now $41,000.
The 2015 enhanced dividend tax credit rates remain the same as the 2014 rates, except for a slight change in the Yukon rate.
The table of non-eligible dividend tax credit rates for 2015 is available. The only changes are for NB, NS and YT, but the 2015 budgets for MB, NL and PE have not yet been tabled.
For most taxpayers, their gains and losses from the sale of securities are treated as capital gains and losses. This means 50% of the gains are taxed instead of 100%. For some taxpayers, such as day traders, the gains and losses are determined to be business income, not capital.
Also updated for the 2015 provincial budgets tabled thus far, this calculator shows taxes for all provinces at once, as well as marginal tax rates.
The calculator has been updated for the provincial budgets that have been tabled thus far. Great for your 2015 tax planning or checking your 2014 tax return.
There are no proposed changes to the personal income tax (PIT) system. Changes to business tax credits, including apprenticeship training tax credit; paralleling Federal measures re the taxation of trusts and estates; Provincial Land Tax reform.
The RRSP/RRIF Withdrawal Calculator now includes the rates proposed in the Federal 2015 Budget, with an option to use the old rates instead. The new rates, if they receive Royal Assent, will apply to all RRIFs, LIFs, and LRIFs, no matter when the plan was set up. The option for the old rates in this calculator only applies to plans set up after 1992. To use old rates for plans set up prior to 1993, you must use the RRIF Withdrawal Calculator.
Our table of 2015 sales tax rates for PST, GST and HST is now available.
See our summary of the tax measures proposed by the Federal 2015 Budget.
A simplified form for 2015 and later taxation years is being developed for taxpayers for whom the total cost of specified foreign property is less than $250,000 throughout the year.
Dispositions of certain private corporation shares and real estate occurring after 2016 will be exempt from capital gains tax when the proceeds are donated to a qualified donee.
The Family Tax Cut for 2014 and later years will be revised so that the credit is not reduced as a result of the transfer of education tax credits.
The LCGE for qualified farm and fishing property dispositions on or after April 21, 2015 will be increased to a maximum of $1 million.
The new lower RRIF withdrawal factors will be the same for all RRIFs, no matter when the RRIFs were initially set up.
A charitable donation that was initially reported on one spouse or common-law partner's return can be transferred to the other spouse or common-law partner in a subsequent year.
Don't miss out claiming medical expenses. Private travel medical insurance may qualify if nothing but eligible medical expenses are covered by the plan. Home renovations may qualify if they enable a disabled person to be more mobile within the dwelling.
Yukon Tax Rate Tables - revised
The Yukon surtax was repealed effective January 1, 2015. There was a change to both the eligible and non-eligible dividend tax credit rates, as a result of the new highest personal income tax rate of 15%. The tax rate tables have been revised to include these changes.
If an eligible expense also qualifies as a medical expense, you can claim both the Seniors' Home Renovation Tax Credit and the medical expense tax credit for the same expense.
If an eligible expense also qualifies as a medical expense, you can claim both the Healthy Homes Renovation Tax Credit and the medical expense tax credit for the same expense.
If you've discovered an error in your return, or a missed deduction or forgotten T-slip, it's quite easy to request a change to your tax return.
To go into business for yourself, you can either start from scratch or buy the shares or assets of an existing business - see some of the advantages and disadvantages of each.
The table of marginal tax rates for New Brunswick now includes the reduction in 2015 of the non-eligible dividend tax credit rate.
The table of 2015 corporate income tax rates for Canada, provinces and territories is now available.
Did you have foreign dividends from which withholding tax was deducted? Make sure you understand the foreign tax credit and related deductions.
The table of marginal tax rates for Nova Scotia includes the reduction in 2015 of the non-eligible dividend tax credit rate.
Reduced non-eligible dividend tax credit rate, elimination of Healthy Living Tax Credit, increase in tobacco taxes.
The table of marginal tax rates for Yukon includes changes announced in the Yukon Budget.
Yukon changed personal income tax rates, added a high income tax bracket, will mirror the Federal Child Fitness Credit (refundable in 2015), is increasing Yukon Child Benefit and increasing political contribution tax credit to match federal tax credit.
The Federal 2015 Budget will be tabled on April 21, 2015.
If you are receiving severance or retiring allowance in relation to employment that was started prior to 1996, then a portion of amounts received can be transferred directly to an RRSP. This eligible retiring allowance is not taxable.
The 2 new tax brackets have been incorporated into the 2015 table of marginal tax rates.
2 new high-income tax brackets were introduced effective January 1, 2015, with rates of 21% and 25.75%, bringing the highest marginal tax rate to 54.75%. A Seniors' Home Renovation Tax Credit was announced, details to follow in the coming weeks. Fuel taxes increased. Many other changes and cost-saving measures not affecting taxes.
Our Wills and Estate Planning page has many articles, including what happens to debts of the deceased, what happens if you die without a will, is a lawyer needed to write a will, who can challenge a will, and much more.
We have lots of articles related to your registered accounts, including contribution limits, minimum withdrawals, withholding taxes, unlocking locked-in accounts, and much more.
When an employer's vehicle is used by an employee, officer or shareholder, a taxable benefit is calculated and included on the T4 as income to the employee. Even the parking for an employee's own vehicle can be considered a taxable benefit.
CRA has launched a new app, so that tax information can be accessed on your tablet or smartphone. Check the status of your tax return and RRSP and TFSA contribution limits.
When a taxpayer qualifies for the disability amount tax credit but does not claim it, there is no limit on the amount of attendant care expenses that can be claimed - the Ontario claim amount would be the same as the federal claim. See the letter from CRA confirming this.
2 new income tax brackets, new health care contribution levy, lower charitable donations tax credit rate, increased gas/diesel and tobacco taxes, increased support for working families.
Enhanced tax credit for experienced workers, gradual elimination of health contribution, other tax credit changes. Reduced eligibility for small business deduction, gradual reduction of general corporate income tax rate.
Effective April 1, 2015, the Province of BC will offer incentives of up to $5,000 for the purchase or lease of a new battery electric or plug-in hybrid electric vehicle, and up to $6,000 for a hydrogen fuel cell vehicle.
Both barter and BitCoin transactions can result in taxable income and GST/HST payable.
Whether Part XIII withholding tax from interest payments must be deducted depends on whether the payment is to an arm's length or non-arm's length payee.
Interest expense re rental property, special rules re vacant land and soft costs.
What is deductible and what is not - safety deposit box fees are no longer deductible. Disappearing source rules - investment sold at a loss for less than loan balance.
Make sure you calculate the maximum child care costs correctly. For 2014, if you have 3 children ages 6, 9 and 15, the annual allowable maximum is $15,000 ($7,000 + 2 x $4,000). If you spend $8,000 each on the 6 and 9 year olds and zero on the 15 year old (total $16,000), you can deduct the lesser of $15,000, and 2/3 of earned income. This is deductible by the spouse with the lower net income before deducting the child care costs.
The budget announced changes to the Seniors' Drug Plan (lower income threshold), Active Families Benefit (now income tested), and Graduate Retention Program, which will become a non-refundable credit.
The Community Volunteer Income Tax Program will prepare tax returns at no charge for low-income individuals with simple tax returns.
The FTC is not true "income splitting", and won't reduce the tax bracket of the higher income spouse. It is a non-refundable tax credit.
An employee can complete the CPT30 election to stop paying CPP contributions on the date that they turn 65. This election applies to both employment and self-employment earnings. If the person only has self-employment earnings the form is not needed - the election is done later, on the tax return for that year.
Are you turning 65 this year? Have children under 18 for whom the child tax amount is eliminated? Time to complete a new TD1 form.
The deadline for 2014 contributions to an RRSP is Monday, March 2nd - don't wait till the last minute!
More than one tax return may be filed for a deceased taxpayer, allowing the taxpayer's income from the year of death to be split among different returns.
If you have lost money on shares, don't transfer them to a registered account, because the loss will not be deductible.
It's important to track the adjusted cost base (ACB) for each of your Canadian mutual funds, so you don't pay too much tax when you sell.
Reinvested distributions are not paid in cash, are taxable, but also increase your adjusted cost base so that your capital gain is less when you sell. These distributions may not be identified on your T3 - how to find the information you need!
Are you a single parent? Or, are you supporting a parent or other dependent relative? The equivalent to spouse tax credit may be available.
Use our Canadian Tax and RRSP savings Calculators to determine how much tax your RRSP contribution will save you.
Maximum monthly premium rates will increase by 4.2% for 2016. The increase was 4.1% for 2015. Those receiving assistance will not be affected by the increase. However, someone who manages to increase their adjusted net income from under $30,000 to over $30,000, thus now paying the full premium, will face a 46% increase.
This new non-refundable tax credit, available for 2015 and later tax years, provides a tax credit equal to 50% of the BC child fitness credit. No need to keep additional receipts - just retain the receipts for the child fitness credit.
This new non-refundable tax credit, available for the 2015-2017 taxation years, will provide a tax reduction of up to $25.30 ($500 x 5.06%).
Effective today, Feb 18th, lift chairs designed to facilitate standing up or sitting down, when sold on the prescription of a practitioner, are exempt from PST. Check the list of PST exempt items - not all retailers provide the exemptions properly.
The 2015 budget announced the usual MSP increase for 2016; new non-refundable tax credits for 2015 for education coaching and child fitness equipment; increase to the low income tax reduction; immediate PST exemption for lift chairs prescribed by a practitioner; extension of training tax credits; extension of mining flow-through share tax credit.
There are several ways of splitting income, either with a spouse or child. Some methods of splitting income with a spouse are done only on the tax return, such as pension splitting and the Family Tax Cut.
You may be allowed to unlock all or a portion of a locked-in pension plan under certain circumstances.
RRSPs can be used to help purchase a home. Make sure repayments are reported on Schedule 7 of your tax return, otherwise you'll lose RRSP contribution room.
This will depend on whether your business is incorporated. A corporation requires a separate T2 corporate income tax return. Unless you are trained in preparing corporate tax returns and are up to date on current tax laws, a T2 corporate tax return should always be prepared or reviewed by a professional accountant.
BC's budget will be tabled on Tuesday Feb 17th. Alberta expects to table their budget by the end of March, and they and Manitoba have pre-budget consultations available online until Feb 28th (27th MB). The Northwest Territories budget was tabled on Feb 5th, with no tax changes. Other budget dates are unknown as yet.
Did you own foreign property with a cost exceeding $100,000 Canadian at any time in 2014 or earlier years? You (Canadian resident individual, corporation, certain trusts or partnerships) may have to file the T1135 foreign income verification report. The penalties for not filing are onerous. Types of foreign property include securities, real estate, life insurance policies, and more. Learn what is included and how to complete the T1135. If your foreign real estate had additions/renovations done that were capital in nature, did this increase the adjusted cost base to over $100,000 Canadian?
With the Service Canada Tax Slips Online service, you can access your official 2014 tax slips online. A My Service Canada Account (MSCA) is required to do this. It may take 5 to 10 business days to receive your Personal Access Code to register for MSCA.
If you have a parent or grandparent over the age of 65 living with you, even if they are not your dependent you could be eligible for the caregiver amount, depending on their net income. This can also be claimed for dependent relatives over the age of 17 who are living with you, if they are dependent on you due to mental or physical impairment. Each province and territory also has a caregiver tax credit.
A loan by a corporation to a shareholder may result in a deemed taxable benefit. Care must be taken in the timing of salary or dividend payments to clear shareholder loans. If the amount of the loan is significant, it could make a CCPC ineligible for the $800,000+ lifetime capital gains exemption for the shareholder, on disposal of the shares. Shareholder loan interest must be paid by January 30th to avoid deemed taxable benefit.
Contribution limits, qualified investments, RRSP/RRIF withdrawal calculator, RRSPs and borrowing, getting your money out of RRSPs, withholding tax and more.
This article discusses which tax deductions or credits can be claimed by either spouse. In some circumstances, the income from dividends from taxable Canadian corporations can all be claimed by one spouse.
The RRSP vs Mortgage (or other loan) Calculator has been updated with 2015 tax rates. Unless the return on your RRSP will be consistently higher than the interest rate on your debt, it's better to pay down your debt.
The TFSA vs RRSP Calculator has been updated with 2015 tax rates and other 2015 data. It can help you determine which account is better for you.
The US estate tax calculator for Canadians who are not US citizens now includes tax year 2015.
Canadians may be subject to US estate tax. We've updated our information to include 2015 unified credit rates.
NetFile will be available from Feb 9 2015 to Jan 15 2016 for filing 2014 tax returns. Dates for EFile are usually the same, but have not yet been announced.
Our table of investment returns on stocks, bonds and T-bills has been updated to include 2014. The CPI All Items inflation rate for 2014 was 1.5%, but the inflation rate for food was 3.7% and shelter 2.4%. The TSX was up 7.4% in 2014. The S&P 500 increased by only 13.7% in US$, but 24% in Cdn$.
Employees previously claiming the child amount must file new Federal TD1 forms. If the minor child is mentally or physically infirm, the Family Caregiver Amount can still be claimed.
T4 slips for 2014 must be distributed to employees on or before March 2, 2014, because February 28th falls on a Saturday. They can be filed online, no need to wait for a web access code.
The Ontario expense limit for attendant care only applies if the federal limit also applies, when the disability amount is being claimed, contrary to what is published in a CRA document.
The LCGE is increased for indexation to $813,600 for 2015. Quebec announced an increase in their LCGE to $1 million for qualified farm and fishing property for 2015 and later years.
Users of "My Business Account" can now authorize CRA to withdraw pre-determined amounts from their business bank account on a specific date in order to pay many different types of taxes.
The average exchange rate for 2014 for conversion of US$ to Cdn$ was 1.1044664.
See also Prior Years:
Revised: July 31, 2023
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