Recently a new government took office in Canada and part of what got them there were changes to the tax code. So what does this mean for you and your finances? Read on for Liu & Associates’ reference guide for some of the new tax changes going forward.
Tax-Free Saving Accounts (TFSA)
In recent years the contribution limit to TFSAs was as high as $10,000. The new limit has been set at $5,500; so keep that in mind when calculating your tax-exempt investments.
Canada Apprentice Loan
Red Seal trade program enrollees can claim a tax credit equivalent to the interest paid on any student loans. Ensure you are in a designated program before assuming you can claim the credit.
Child Fitness Tax Credit
Originally a non-refundable tax credit, receipts submitted for costs or fees related to a child’s physical activity can now be claimed up to $150. Instead of being applied to taxes owed (non-refundable), even those getting returns will now benefit from this credit.
Child-care expenses
Before this year, child-care expenses were capped at $7,000 per child under 6 and $4,000 per child between 7 and 16 years old. Each credit limit was increased by $1,000 in the new wave of tax changes.
New tax brackets
Refer to the following list to determine which tax bracket you fall into:
- $45,282… 15%
- $45,282-90,563… 20.5%
- $90,563-140,388… 26%
- $140,388-200,00… 29%
- Over $200,000… 33%
*NOTE: Each rate is only applied to the portion of income to which it corresponds.
Enhanced Universal Child Care Benefit (UCCB)
If your family received the UCCB from the previous government, the amount will be counted as taxable income. While this may lead to a smaller refund for the moment, there are plans for a tax-free replacement.
The above list is a summary of some new additions and subtractions to and from the complex tax code of Canada. If you have questions or concerns about filing your taxes– no matter how complicated– contact or visit Liu & Associates today!