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8 changes you should know for the 2019 tax season

The new year always brings changes. We join fitness classes to change our bodies. We clean our homes of clutter to clear our minds. And we make new resolutions to change our lives. There are some changes we have no control over, however, and that’s changes to income tax laws.

What may have been a credit or deduction last year may not be so this year. It’s always important to know what the changes are so you can take advantage of the ones that pertain to you. Knowing what you can and can’t claim is the first step to proper tax planning. TAXplan has put together a list of 8 changes to the tax laws that may have the most affect on your 2018 tax return.

1. Medical Expenses and service animals

While you were able to claim medical expenses in the past this year Canadians suffering from severe mental disorders will be able to claim the cost of caring for a service animal. If your service animal has been specially trained to help you cope with severe mental impairment you will be able to claim expenses such as costs to maintain your service animal, veterinary expenses and food. To find out if you qualify ask a TAXplan TAXpro for more details.

2. The Climate Action Incentive

New for residents of New Brunswick, Ontario, Manitoba and Saskatchewan is the Climate Action Incentive tax credit.  Starting April 2019 residents of these provinces will be charged a federal carbon tax called a “fuel charge”. You’ll see the added tax when you fill up for car fuel or added to your home heating bill. So if you live in these provinces you will receive an added incentive of $598 in Saskatchewan, $248 in New Brunswick, $300 in Ontario and $336 in Manitoba. Your TAXplan TAXpro can fill you in on the details and will make sure you receive the credit if you are eligible.

3. Canada Child Benefits now available to “Foreign Born Status Indians”

“Foreign-born status Indians” (individuals that reside in Canada and are Indians under the Indian Act but are neither Canadian citizens nor permanent residents) are now allowed to retroactively apply for CCB for the 2005 taxation year through to June 30, 2016.

4. New changes for parents!

The 2018 federal budget has made changes to the Employment Insurance (EI) parental sharing benefit that allows parents to take up to five additional weeks of time off, starting in March 2019 after the birth or adoption of a child. To be eligible you must be a parent with a child born or placed for adoption on or after March 17, 2019 and both new parents must share the time at home with the new baby. To learn more contact a TAXplan TAXpro for details.

5. Accelerated Capital Cost Allowance Rates

If you’re a business owner this will affect you. Changes to CCA takes effect for purchases of equipment made on or after November 21, 2018 and before 2024 and will affect the amount claimed on the 2018 tax return. Initially business owners were only able to claim 50% of the cost in the year of purchase but now with the new “accelerated investment incentive”150% of the normal CCA rate can be claimed. That’s 3 times the original amount!

6. Elimination of the home relocation loan

As per changes that were proposed in the 2017 federal budget, the home relocation loan deduction will be eliminated as of 2018.

7. Reduction of the small business corporate tax rate

More good news for small business owners: the small business corporate tax rate was reduced from 10.5% to 10% effective for 2018 with a further reduction to 9% for 2019!

And lastly:

8. Retirement income security benefits for veterans now qualify for pension splitting.

This will be retroactive to 2015. If you’re a veteran receiving retirement income security benefits you will now be eligible for pension splitting. The cap on the amount that can be split is $103,056 for 2018.

There you have it….TAXplan’s list of the top 8 changes to the tax act that will likely have an affect on the average Canadian. To learn more about changes to the tax laws for this year visit the Canada Revenue Agency website or contact a TAXplan TAXpro for details.

Make Note of these Important Tax Changes for 2017

Every year there are changes to the Canadian tax season. Do you know the 2017 updates? This year there are changes for families, interest, investments, and tax law so buckle up and we’ll review everything that you should be aware of for the 2017 tax season.

What’s New for Families?

If you’re responsible for your family’s taxes, you’ll want to know about the following benefits, deductions, and credits for the 2016 income tax year. What, more to think about? With kids and a million little things on the go, we’d like to remind you that, when you file your taxes with TAXplan, our TAXpros will take care of the details to ensure that your family doesn’t miss any applicable tax credits or deductions.

The Canada Child Benefit (CCB)

The Canada Child Tax Benefit (CCTB) came into effect on July 20th, 2016. It’s replaced the Universal child care benefit (UCCB) and National Child Benefit Supplement (NCBS), and is designed to help eligible families with the cost of raising kids under the age of 18.

The CCB is a tax-free monthly payment that’s calculated using the adjusted family net income from your previous year’s income tax return. You’re required to file annually to receive the benefit. If you haven’t filed your 2015 return, you may miss out on these payments if you’re eligible.

Children’s Fitness and Arts Tax Credits

Unfortunately, the children’s fitness tax credit has been reduced to $500 from $1,000, and the children’s arts tax credit has been reduced to $250 from $500. Sad but true, however the additional amount of $500 available to children eligible for the disability tax credit isn’t changing.

Important note: these amounts are refundable in 2016, however in 2017 and subsequent tax years, both credits have been removed. If this is confusing, don’t hesitate to connect with a TAXpro who will make sure that everything is optimized for your family.

Child Care Expenses

The maximum limit for child care expenses hasn’t changed for 2016. Here’s a brief overview of the deduction limits based on your child’s age at the end of the applicable tax year:

  • Children 6 years and under, you can deduct $8,000 annually;
  • Children between the ages of 7 and 15, you can deduct $5,000 annually; and
  • Children eligible for the disability tax credit have an annual limit of $11,000.

Family Tax Cut

The family tax cut, also known as the income splitting tax credit, has been eliminated for 2016 and subsequent tax years. This doesn’t apply to you if you receive a pension; you may still be able to reduce your taxes on eligible pension income by splitting with your spouse or common-law partner.

News for Interest and Investments

Take note of the following changes for investments and interest for your 2016 income tax year. Remember that when you file with TAXplan, our TAXpros will ensure that all of deductions and credits are accounted for and that your tax return is optimized for the best possible results.

Tax-Free Savings Account (TFSA)

It’s important to note that the annual TFSA dollar limit has been reduced in 2016 to $5,500.

Other Deductions

The minimum withdrawal amounts for the following funds and plans have not changed for 2016:

  • registered retirement income fund (RRIF)
  • registered pension plan (RPP)
  • pooled registered pension plan (PRPP)

For more information see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Interest Paid on your Student Loans

Still paying off student loans? Here’s some good news. If you paid any interest on your student loan in 2016, you may be able to claim it. Follow this link to learn more or use the TAXplan app (free for students!*) and a TAXpro will take care of it for you.

Other News and Updates

Home Accessibility Tax Credit (HATC)

If you and your home qualify, you might be able to claim a non-refundable tax credit in 2016 for certain expenses paid to renovate your home. Review the home accessibility expenses information on the CRA website for all the details.

New Reporting Requirement on the Sale of your Principal Residence

In 2016 and going forward, you’ll need to report basic information regarding the sale of your principal residence. This information includes when you originally purchased the home, how much it was sold for, and the home address. You’re not required to pay capital gains on the sale of your principal residence if you didn’t use any part the home to earn money. Learn more about this important reporting requirement here.

Tax Credit for Educator School Supplies

Are you a teacher? If you’re an eligible educator, you may be able to receive a tax credit on qualifying teaching supplies bought throughout the tax year. It’s a step in the right direction. The 15% refundable tax credit is calculated on up to $1,000 in expenses. This tax credit is applicable to teachers and early childhood educators. Review the CRA publication to learn if you’re eligible.

Never Miss a Tax Credit

With so many changes to this year’s tax guidelines, we highly recommend that you entrust your 2016 online tax return to a professional. Consider TAXplan. We make your life easier by allowing you to submit your tax information in a convenient app for it to be processed, optimized, and filed by a professional. Click here to start now.