2
Top 10 Things to Know
The new federal budget was released on March 22nd, confirming:
1. New top federal personal tax bracket of 33% for taxable income over $200,000 (increase from 29%)
2. Reduction in federal personal tax bracket for middle income earners – approx. $45,000 to $90,000; reduction from 22% to 20.5%
3
Top 10 Things to Know
3. Canada Child Benefit is now replacing the CCTB and UCCB. New benefit is phased out for higher income families.
Check out the government’s CCB Calculator here:
http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html
4. Family Tax Cut, a tax credit announced by the Conservative government for 2014 and 2015, has been repealed effective 2016.
5. Northern Residents Deduction is increased
4
Top 10 Things to Know
6. New Teacher and Early Childhood Educator School Supply Credit - 15% refundable tax credit on up to $1,000 in expenditures made by an employee for eligible supplies
7. Mineral Exploration Tax Credit for Flow Through Share Investors - extended until 2017
8. Education and Textbook Tax Credit; this is a fixed tax credit based on the number of full-time and part-time months in school. This credit is eliminated after 2016. Existing unused credits will still be able to be carried forward
5
Top 10 Things to Know
9. Children’s Fitness and Arts Credits - halved for 2016, so $500 for fitness and $250 for arts. Eliminated in 2017
10.Mutual fund corporation switches - after September 2016, switches between mutual fund corporations will now be considered dispositions at market value
7
Foreign Reporting • T1135 expanded foreign reporting. Form T1135 is used to
report “specified foreign property” with a cost greater than CAD $100,000 at any time in the year
• Common examples: • Shares of non-resident corporations held in non-
registered accounts, either private or public; • Real estate property (excluding personal property, e.g.
vacation property); • Debts such as bonds owed by non-residents, etc. etc.
• Effective 2015 there is a simplified reporting method for a taxpayer who owned held specified foreign property with cost less than $250,000 throughout the year
• Brokerage accounts are capable of providing information for non-registered accounts to be inputted into the T1135
8
Tips and Traps - Investments
Return of Capital• ROC reduces the ACB of the investment, which may
result in capital gains when the investment is eventually sold
TFSA• It’s not a chequing account!• Be careful of re-contributions in the same year• Did you know that you can contribute to your spouse’s
account?• Be careful of day traders who use TFSA accounts - can
get audited
RRSPs• Balancing between your RRSP and TFSA
9
Lesser-known Tax Credits and Rules
• First time home buyers credit
• Fun fact – become a volunteer firefighter and get a tax credit
• Children’s Fitness Tax Credit• Refundable - money in your pocket. (In BC, that’s
$0.20 on the dollar. Spend $500 and get $100 back)
• Halved for 2016, so $500 for fitness and $250 for arts.
• Eliminated in 2017
• RRIF withdrawals• Effective 2015, minimum withdrawal rates
reduced by approx. 2% for individuals aged 71-94
10
Manage Your Taxes Online
Using CRA’s My Account for:
• Individuals • Returns and assessments• RRSP & TFSA
Contribution room• Copies of slips• Statement of accounts
(taxes owing or refundable) and direct deposit information
• Businesses and self-employed people• GST / HST
Keep up with the latest from CRA (Search for: 2015 T1 Guide, etc.)
11
Tips and Traps – Real Estate
Change in use • From principal residence to rental property and vice
versa• Deemed disposition• What is Fair Market Value? Your realtor can get this info
for you• Get a comparative when selling a condo
Lifetime capital gains exemption • Only for the sale of certain things (Qualified Small
Business Corporation shares, Qualified Farm or Fishing Property)
• Principal residence exemption is different • Example: If you have a cottage, may choose to claim
principal residence exemption on sale
Top Related