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What's New by Month
February 2019
Transfer/Carry Forward of Unused Tuition and Education Amounts
The tuition and education tax credits have been eliminated now in NB, ON and SK. However, it is only ON that no longer allows the carry-forward of unused credits from another province when a taxpayer moves to Ontario.
Voluntary Tax Deductions from Old Age Security or Canada Pension Plan Payments
If you previously requested voluntary tax deductions from your OAS or CPP in order to avoid having to make income tax instalments, you can request a change through your My Service Canada Account, or by completing and submitting a form.
Requesting a Change to Your OAS Clawback / Recovery Tax
If your income circumstances have changed such that you think the clawback of your OAS should be reduced or eliminated, you can request a change by completing form T1213OAS and submitting it to Canada Revenue Agency.
What Types of Income are not Taxable?
Some types of income are not taxable, such as inheritances, gifts and most lottery winnings, and some must be included in the tax return even if they are not taxable, such as GIS and workers' compensation benefits. The latter affect income-tested benefits even though they are not included in taxable income.
2019 Non-Eligible (Small Business) Dividend Tax Credit Rates
Due to the 2019 final reduction in the gross-up rate for non-eligible, or "regular" dividends, the dividend tax credit rates for 2019 are automatically revised for most provinces and territories.
2019 Enhanced Dividend Tax Credit Rates
The tables of dividend tax credit rates for eligible dividends includes rates for 2019. The only changes thus far are for BC and Quebec. This could change when 2019 budgets are tabled.
2019 Corporate Income Tax Rates
The Federal small business corporate income tax rate is reduced to 9% effective January 1, 2019. The Quebec and PEI small business rates are also reduced for 2019, and Manitoba's small business limit is increased.
January 2019
RRSP/RRIF Withdrawal Calculator
Use our RRSP/RRIF calculator to calculate your 2019 minimum annual withdrawal, and to estimate your earnings and withdrawals from your RRIF for the next 40 years. If you haven't converted to a RRIF yet, or if you only have non-registered investments, this calculator is still useful for you!
Filing Your Return - Income, Deductions, Tax Credits
We have many articles on filing your tax return and how this can be done, as well as articles about different types of taxable income, deductions and tax credits, and many other topics. Make sure you take advantage of available tax credits!
Life in the Tax Lane February 2019
This month's video includes: Principal residence exemption - large lots; 2019 tax-free automobile allowances; Incentive payments for travel to pick-up site; Construction industry T5018 form penalties; Canada Child Benefit and shared custody; CPA Canada - Tax system review needed.
So far we know of 2 dates for provincial budgets - BC on February 19th and Manitoba on March 7th. There are also a few pre-budget consultations still underway.
GST/HST Invoicing Requirements
It's amazing how some large companies who are GST/HST registrants do not provide proper invoices. Proper invoicing is required so that the customers of the business can properly claim their input tax credits. GST/HST must be shown separately on an invoice. Federal and provincial HST parts are not shown separately. Provincial retail sales tax (PST, RST, etc) is shown separately from the GST. The seller's business number must be shown if the total sale is $30 or more.
BC Speculation and Vacancy Tax
Make sure you file a declaration if you're in one of the designated areas, otherwise you'll be billed for this tax even if you shouldn't be paying it. If you don't receive a notice but are in a designated area, call the BC government! This tax applies to vacant residential land as well as land with a residence on it. The City of Vancouver Empty Homes Tax is another separate tax.
Besides annual property tax on the assessed value of properties, there is property purchase tax when a property changes hands, as well as a foreign buyers' tax, which is an additional property purchase tax. There is now an additional school tax for high-value residential properties, as part of the annual property tax bill.
Ontario Low-income Individual and Families (LIFT) Credit
The non-refundable LIFT credit will be in effect for 2019 and subsequent years, and will provide a provincial income tax reduction of up to $850 for an individual and $1,700 for a couple. There is no LIFT credit if the individual has no employment (T4) income. This credit is included in the Detailed Canadian Tax Calculator.
Historical Returns on Investments - Stocks, Bonds, T-Bills
This table of returns on investments has been updated with the December 2018 Consumer Price Index (CPI). See returns for 1, 5, 10, 20 and 50 years. Then use our Investment Return Calculator to determine your own returns.
Transfer Shares to a Registered Account, But Not at a Loss!
You can transfer shares from a non-registered account to a registered account such as an RRSP. However, if you transfer shares on which there is a loss, the loss will not be deductible. If you transfer shares on which there is a gain, you will have a taxable capital gain.
Writing Off Interest Expense Related to Investments
If you incur interest expense related to investments, make sure you keep a clear record of it. Interest expense is claimed on line 221 of the personal income tax return.
2019 BC Pharmacare Coverage Changes
Changes effective January 1, eliminate family deductibles for family net income of $30,000 or less, reduce deductibles for net income of $41,667 or less, and eliminate or reduce family maximums for net income of $45,000 or less. Note that you MUST REGISTER for Pharmacare benefits.
Reporting Foreign Income and Expenses on the Tax Return
All income and expenses must be reported on your tax return in Canadian dollars, converted either at the transaction date exchange rate, or the average exchange rate for the year. The average US exchange rate for 2018 is 1.2957.
Historical Returns on Investments - Stocks, Bonds, T-Bills
It was a bad year for the S&P/TSX and for the S&P 500. However, the S&P 500 return in Canadian dollars was better than in US dollars because the Canadian dollar decreased in value against the US dollar. See the historical returns for 1, 5, 10, 20, and 50 years, and how much $1,000 invested at the beginning of the period in various investment types are worth at the end of the period. Over the past 5+ years one would be losing money after inflation by investing in Canadian 3-month T-bills or Canadian government 1-3 year bonds.
Use our investment return calculator to determine your returns for 2018 or any time period for a particular investment or investment account, or your entire portfolio.
See also Prior Years:
Revised: February 16, 2019