What's New by Month
March 2, 2015 is the deadline for RRSP contributions for the 2014 tax year, because March 1st falls on a Sunday.
Plan ahead by making a will and ensuring your wishes are known. Make sure that your will complies with current provincial legislation.
The 50% of GST or HST that is not recoverable as an input tax credit re meals and entertainment expense is also not deductible for tax purposes.
The last trading date for 2014 for Canadian publicly traded stocks is December 24th, and for US publicly traded stocks is December 26th. The Canadian stock exchange closes early on the 24th, so don't leave things to the last minute!
The tax-free motor vehicle allowance is increased for 2015. Other rates related to vehicles and their expenses remain unchanged for 2015.
A recent CRA document indicates that a plan for a sole shareholder-sole employee would not likely qualify as a PHSP. However, there are circumstances under which it would qualify.
Economic Action Plan 2014 Act, No. 2 received Royal Assent December 16th. It includes the Small Business Job Credit, changes for farming and fishing businesses, doubling of the Children's Fitness Tax Credit, and many more provisions.
The TD1 forms for 2015 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.
Make sure you're aware of how long you must retain source documents for your individual tax return, and source documents and other information for your business.
A donation must be received by the charity on or before December 31, 2014 in order for them to issue a charitable donation tax receipt for the 2014 taxation year.
If you're considering making a TFSA withdrawal, do it by December 31st so that your contribution room increases by that amount January 1, 2015.
If you're planning to buy an asset in the near future, consider buying it before year end, so you get the full CCA write-off sooner, for assets that are subject to the half-year rule.
Some remittance thresholds have changed for 2015 payrolls. Make sure you pay your remittances on time to avoid high penalties!
The gross revenue requirement does not apply to qualified farm property used by a partnership or family farm corporation. Otteson is an interesting and educational Tax Court case on this topic.
There are many tasks that have to be performed when someone dies, but there are lots of resources online to help.
The table of tax credits and deductions has been updated to include 2015 amounts.
The deadline for taxpayer relief requests related to 2004 is December 31, 2014. This applies to income tax and GST/HST issues such as waiver of penalties and interest, acceptance of late-filed, amended or revoked income tax elections, and more.
The contribution limit for TFSAs for 2015 is again $5,500. At the current rate of inflation, it will increase to $6,000 in 2018.
With the Christmas season coming up, know the rules about gifts to employees and when they are taxable.
Sometimes, 100% of meals and entertainment expenses can be deducted by a business. A Christmas party to which all employees are invited would qualify.
Eligible couples with children under age 18 can "notionally" split income, resulting in a tax reduction of up to $2,000. The FTC is calculated in our detailed Canadian Tax and RRSP Savings Calculators. Find out if you're eligible.
The last trading date for 2014 for Canadian publicly traded stocks is December 24th, and for US publicly traded stocks is December 26th. The Canadian stock exchange closes early on the 24th, so don't leave things to the last minute!
The Investment Income Tax and Quebec Investment Income Tax Calculators now include 2015. These are simple to use calculators that show how Canadian dividends are much more tax efficient than interest or other income, even if the dividends increase the OAS clawback.
The detailed 2014 and 2015 Canadian Tax Calculator is now available, and includes the new Family Tax Cut (FTC).
The detailed 2014 and 2015 Quebec Tax Calculator is now available. QC indexation factor, thresholds and tax credits are based on our calculations and have not yet been confirmed, so there may be slight rounding differences once these factors are confirmed. The new Family Tax Cut (FTC) is included in the calculator.
The RRSP contribution limit for 2016 will be $25,370, up from $24,930 in 2015, an increase of 1.76%.
Using the age of a younger spouse can be an advantage in calculating RRIF minimum withdrawals, but the election to do so must be made before receiving any payments from the fund.
Hosting a big group at a restaurant? If there is a mandatory or suggested gratuity included on the bill, you will also pay GST or HST on the gratuity.
The maximum pensionable earnings amount has increased by 2.1% for 2015, to $53,600 from $52,500 for 2014. The rate remains the same at 4.95%. The maximum employee and employer contributions will be $2,479.95 each.
The maximum pensionable earnings amount has increased by 2.1% for 2015, to $53,600 from $52,500 for 2014. The rate increases to 5.25% from 5.175%.The maximum employee and employer contributions will be $2,630.25 each.
The federal government announced a new Family Tax Cut for 2014, for couples with children under 18. This will be a non-refundable tax credit to a maximum of $2,000. The UCCB will be increased for 2015 and will also be provided, in a lower amount, for children ages 6 to 17. The Child Tax Credit will be eliminated for 2015, and the Child Care Expense Deduction limit will be increased.
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.
An RDSP is a savings plan to help ensure future financial security for a person eligible for the disability tax credit. It can be set up for an adult, or for a minor child or grandchild.
The tables of non-refundable tax credits for 2015 are now available for all provinces except Quebec.
Compare taxes and marginal tax rates for both types of Canadian dividends, capital gains, and other income, for all provinces and territories, for 2010 to 2015.
The tables use our calculation of indexation factors, so may require slight rounding adjustments once CRA publishes the factors.
The maximum insurable earnings for 2015 is $49,500, up from $48,600 in 2014. The rate is frozen at 2013 levels, so the employee maximum for 2015 is $930.60, up from $913.68. The Quebec maximum for 2015 is $762.30, up from $743.58 in 2014.
Use spousal RRSPs to equalize future income; know the attribution rules re spousal RRSPs and RRIFs.
The Children's Fitness Tax Credit is being increased from $500 to $1,000 for the 2014 and subsequent taxation years, and will be made refundable for the 2015 and subsequent taxation years.
See the pros and cons. It may be better to contribute monthly through payroll transfers, and have your income tax reduced immediately.
Capital purchase records must be kept for 6 years after tax year in which the capital asset is disposed of. Some records must be kept until 6 years after the tax year in which the business ceases.
This simple table will show how long your investments
will last before they are drawn down to zero, using various rates of
return. Now that children are back in school, even in BC, these articles which relate to students regarding income, deductions, tax credits and savings plans are worthy of a revisit! The superficial loss rules provide a method for capital losses to be transferred to a spouse. The spouse must hold the shares for more than 30 days for this to work, so to do this for
2014 you should act fairly soon. The OAS pension is clawed back if income exceeds a
certain level. Capital gains can trigger this clawback, even if they are
offset by losses carried forward. If you have losses carried
forward, you may want to consider some investment disposals in order to
trigger the capital gains prior to the year you will start
collecting your OAS.
Capital gains can be eliminated by donating capital property, such as securities, to charitable organizations which are qualified donees. This should be done by
the end of November (MUCH earlier for mutual funds) to avoid the busy season and ensure the transactions are completed before year end. BC Supreme Court Case: Notice required to
terminate dependent contractor - Khan v. All-Can Express Ltd. Financial hardship unlocking, one of the several
unlocking methods available, can be done 1x per year
unless maximum not withdrawn - then 2nd unlocking can be done but only
within 30 days of 1st unlocking. EI premiums paid by small businesses will be reduced
for 2015/2016. Employee rates remain unchanged. For many partnerships and individuals, the ITC is based
on capital cost allowance and the GST/HST rate at the end of each taxation
year. On Aug 29th, the Department of Finance released draft
legislative proposals to implement tax measures from the 2014 Budget, as
well as some additional measures. PSBs, also known as "incorporated employees",
pay higher corporate income tax rates! Are you an employee, or a self-employed
contractor? It's often the courts who decide! 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.
This simple table will show how long your investments will last before they are drawn down to zero, using various rates of return.
Now that children are back in school, even in BC, these articles which relate to students regarding income, deductions, tax credits and savings plans are worthy of a revisit!
The superficial loss rules provide a method for capital losses to be transferred to a spouse. The spouse must hold the shares for more than 30 days for this to work, so to do this for 2014 you should act fairly soon.
The OAS pension is clawed back if income exceeds a certain level. Capital gains can trigger this clawback, even if they are offset by losses carried forward. If you have losses carried forward, you may want to consider some investment disposals in order to trigger the capital gains prior to the year you will start collecting your OAS.
Capital gains can be eliminated by donating capital property, such as securities, to charitable organizations which are qualified donees. This should be done by the end of November (MUCH earlier for mutual funds) to avoid the busy season and ensure the transactions are completed before year end.
BC Supreme Court Case: Notice required to terminate dependent contractor - Khan v. All-Can Express Ltd.
Financial hardship unlocking, one of the several unlocking methods available, can be done 1x per year unless maximum not withdrawn - then 2nd unlocking can be done but only within 30 days of 1st unlocking.
EI premiums paid by small businesses will be reduced for 2015/2016. Employee rates remain unchanged.
For many partnerships and individuals, the ITC is based on capital cost allowance and the GST/HST rate at the end of each taxation year.
On Aug 29th, the Department of Finance released draft legislative proposals to implement tax measures from the 2014 Budget, as well as some additional measures.August 2014
PSBs, also known as "incorporated employees", pay higher corporate income tax rates!
Are you an employee, or a self-employed contractor? It's often the courts who decide!
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. Alberta and BC are the lowest tax provinces for a single person earning $50,000. For a single income family with 2 kids and $50,000 employment income, Saskatchewan is the lowest tax province.
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, rent, etc) - see how the taxes are significantly lower with eligible dividends even when the OAS is clawed back.
There are several ways to reduce the taxes payable of a deceased taxpayer, including the transfer of capital property to a spouse or spouse trust.
The withholding tax rate depends on the amount withdrawn as well as other factors. You may have to pay more tax or get a refund depending on your total taxable income when your tax return is filed.
The calculator has been updated to include the pension splitting changes from the QC 2014 budget.
The Borrow to Invest Calculator helps you decide if borrowing to invest would be right for you. Works for all provinces and territories.
Borrowing to invest can help build your retirement funds, but should not be done by novice investors.
The 2013 transitional reporting method for reporting aggregate amounts by brokerage has been revised to be used for 2014 and later taxation years.
Use the Investment Income Tax Calculator to see the big difference in taxes payable by receiving dividends instead of interest, even if your OAS is being clawed back. Now updated for NL 2014 budget re dividend tax credits.
Basic Tax Calculator - See the tax results for several years and all provinces and territories, with one calculation. Now updated for NL 2014 budget re dividend tax credits.
Use the detailed Canadian Tax and RRSP Savings Calculator to do your detailed 2014 tax planning. Now updated for NL 2014 budget re dividend tax credits and low-income tax reduction thresholds.
Donation tax credit rates - federal and for each province, including the first-time donor super-credit. How much income is needed to fully utilize the tax credit for your donation? Our tax calculators will let you know if your donations are not fully utilized.
The table of 2014 corporate income tax rates for Canada, provinces and territories is now available, and includes tax rates on investment income.
Have you contributed too much to your RRSP? Best to withdraw the excess as soon as possible to avoid the tax on the excess. This can be done without having withholding tax deducted.
US Offshore Voluntary Disclosure Program (OVDP) (on USTaxTips.net)
Major changes were announced to this program on June 18th. If you are an eligible US citizen or dual citizen, best to make your disclosure as soon as possible.
Economic Action Plan 2014 Act, No. 1 receives Royal Assent June 19, 2014
What pension income qualifies? How can pension income be created? Pension splitting.
What investments can be held in an RRSP, RRIF, RESP or TFSA?
Which is better for you - RRSPs vs TFSAs. Includes proposed 2014 Ontario tax rates, allows option to choose when you start collecting OAS.
Compare taxes among all provinces and many years at a glance. Includes proposed 2014 Ontario tax rates.
Do your 2014 tax planning in detail. Includes proposed 2014 Ontario tax rates.
See the tax efficiency of Canadian dividends, even when OAS is being clawed back! Includes proposed 2014 Ontario tax rates.
Calculate the tradesperson's tools deduction and apprentice mechanic's tools deduction for 2014 and earlier years.
An employee can complete the 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. Both employed and self-employed? May be able to back-date election for self-employed earnings (to date of 65th birthday).
The new QC budget eliminates pension splitting for those under 65. Tax credit for experienced workers is enhanced, and new tax credit for some activities for seniors age 70+. Lower tax rate for manufacturing SMEs. Tobacco tax increases. Alcohol tax changes.
Canada's new Anti-Spam legislation takes effect July 1st. If you use email in your business, you should familiarize yourself with the requirements. The new fightspam.gc.ca website will allow you to report any spam received, after July 1, 2014.May 2014
You may be allowed to unlock all or a portion of a locked-in pension plan under certain circumstances.
Don't agree with your income tax assessment? How to file a notice of objection.
How to file a late tax return, what is your exposure to interest and penalties?
If you have borrowed funds to purchase real estate from which you will be earning income, the interest expense is deductible, but with restrictions if the real estate is vacant land.
Not all earnings are insurable or pensionable. How to get a refund - employer or employee.
Does your business have an internet presence? If you filed your 2013 tax return prior to April 4, 2014, then you can wait until next year to start filing this form.
Discovered a missed tax slip? Missed expenses? It's not difficult to change your tax return.
The RRSP deadline is over, but it's a good time to get started on this year's contributions!
This budget is subject to legislative approval, so may not become a reality, depending on the now-scheduled June 12th election.
We had already published changes to the Ontario 2014 tax rates based on the November 2013 Economic Outlook. However, legislation has not yet been introduced for these changes, which may not become a reality, depending on the June 12th election. Thus, we now have a new table with the proposed changes included.
We have revised the regular Ontario tax rates table to show what the marginal tax rates would be with no legislative changes.
This form is new for the 2013 tax year, and will probably have to be filed by most corporations.
Without doing some checking, you may not realize that you're paying tax on reinvested distributions. Your adjusted cost base should be reduced by these amounts.
Canada Revenue Agency has finally confirmed in print in a news release that the payment due date has been extended to May 5, 2014. Previous announcements were ambiguous.
The BC tax rate tables have been revised to reflect the automatic reduction of the 2014 non-eligible dividend tax credit as a result of the change in the gross-up rate.
The BC Income Tax Act is not being revised re the reduction in the gross-up rate from 25% to 18% for 2014 for non-eligible dividends, as we previously thought based on an incorrect rate on the BC website. This means the tax credit is automatically changed to 2.59% of the taxable dividend. It was 3.4% in 2013.
Our Basic Tax Calculator, Detailed Tax Calculator and Investment Income Tax Calculator now include changes in non-eligible dividend tax credit (DTC) rates for 2014 for any provinces which have announced changes, except for Newfoundland & Labrador. The Newfoundland & Labrador 2014 Budget proposed to reduce the eligible and non-eligible DTC rates effective July 1, 2014. These changes will be included in the calculators after the budget has been approved, which is expected to be in May.
In November 2013, the Ontario government announced proposed changes to the surtax calculation, such that the surtax will be calculated before deducting dividend tax credits. This ensures that the dividend tax credits for high income taxpayers are not increased by the surtax. Our income tax calculators include this change. Draft legislation is not yet available, so further changes may be required in the future.
The due date for filing of individual tax returns and for payment of amounts owing has been extended by CRA to May 5, 2014, due to the Heartbleed bug. The extension of the payment due date to May 5th also applies to self-employed individuals who have until June 15th to file their returns.
Own a rental property or rent out a room in your home? Many expenses can be deducted in calculating your net rental income. Rental property in another country - don't forget the T1135 Foreign Income Verification Statement.
The HBP allows you to borrow funds from your RRSP to buy or build a qualifying home. If you made an HBP repayment to your RRSP from Jan 1, 2013 to Mar 3, 2014, make sure you record it properly on Schedule 7 of your 2013 tax return.
HST rate reduction not happening, Graduate Retention Rebate eliminated, Child Tax Benefit expanded, efficiency fee to be removed from power bills.
Wills and why you should have one, probate fees by province, income taxes and death, what to do when someone dies.
When foreign investment property (eg stocks, real estate) costing more than $100,000 is owned at any time in the year, form T1135 Foreign Income Verification Statement must be filed. The penalties for not filing are high. Don't assume this form has been filed for you by your tax preparer - make sure it has been filed.
See our suggested portfolios, good for novice investors, for inside or outside of your RRSP, RRIF or TFSA.
The method of recovery depends on whether the overpayment relates to the current year, or a prior year.
BC's personal and spousal amounts were reduced in 2013 because of the return to PST from HST, reversing the increase that was put in place when HST was implemented.
The Yukon 2014 Budget announced a reduction in the small business corporate income tax rate from 4% to 3%.
The FCA provides an increase of $2,040 in 2013 to certain tax credits, if the dependant is infirm by reason of mental or physical disability.
An employed tradesperson can claim a deduction up to $500 for tools, with an additional amount able to be claimed by apprentice mechanics.
An employed apprentice mechanic can claim a deduction for tools purchased for use in their work as an apprentice mechanic.
Do you have a worthless investment? Can't sell it because it has been delisted? There may be a way to claim the capital loss.
Interest expense incurred to earn investment income can be deducted as carrying charges on your tax return. This could include mortgage, loan, or line of credit interest, margin interest, or interest on your CSB payroll savings plan.
It's important to track the adjusted cost base (ACB) for each Canadian mutual fund and exchange traded fund (ETF) you own, so you don't pay too much tax when you sell. See our Mutual Fund and ETF articles to learn more.
The SK Budget included a change to the 2014 non-eligible dividend tax credit rate, in keeping with the reduction of the gross-up rate from 25% to 18%.
We haven't found an announcement, but the BC government website indicates a change has been made to the 2014 non-eligible dividend tax credit rate, re the gross-up reduction from 25% to 18%.
Alberta announced in December 2013 (we missed it) that their non-eligible dividend tax credit rate would be revised re the gross-up reduction from 25% to 18%.
Enhanced low-income tax reduction and low-income seniors' benefit, reduced small business corporate income tax rate, reduced dividend tax credit rates.
Did you buy a new home? See if you're eligible. Also provincial tax credits for seniors' home renovations for BC and Ontario.
Make sure you claim eligible expenses for your children. Some provinces have a fitness credit also.
Make sure you claim eligible expenses for your children. Some provinces have an arts credit also.
Revision to non-eligible dividend tax credit, special income tax reduction for credit unions to be maintained, some increased benefits.
New Seniors' School Tax Rebate; several tax credits extended, new emissions tax for petroleum coke starting January 1, 2014.
Above link is to Alberta website - no new taxes or tax increases in the budget.
Ages 60 to 64: Must still pay CPP if still working, even if collecting retirement pension. Ages 65 to 70: Can opt out with an election.
Free in 30 is a plan to help you go from having nothing to being financially independent in 30 years or less.
If you have lost money on shares, don't transfer them to a registered account, because the loss will not be deductible.
The answer isn't simple, but we can provide some guidance.
Use one of our RRIF Withdrawal Calculators to forecast your RRIF withdrawals and see how long your RRIF will last, even if your funds are still in an RRSP.
The caregiver amount tax credit may be available to you if your parent or grandparent over 65 lives with you, even if they are not your dependant. It may also be available if another relative lives with you who is dependent on you due to a mental or physical infirmity.
The age amount tax credit gets clawed back at $34,562 federally, and anywhere from $27,749 (MB) to $36,497 (AB) provincially.
Use one of our calculators to see how much an RRSP contribution would save you.
Not much time left to make your RRSP contribution - don't leave it till the last day!
Our table of sales tax rates (GST, HST and provincial retail sales taxes) for 2014 is now available.
There were no significant tax changes in the budget. Some federal measures are being adopted, such as the search and rescue volunteer tax credit.
MSP increases 4% for 2015, reduced thresholds for home owner grant, Early Childhood Tax Benefit introduced April 1, 2015, Mining Flow-Through Share Tax Credit and SRED Tax Credit extended.
The spousal amount tax credit may be available even if your spouse doesn't live with you. A greater tax credit is available if your spouse has a mental or physical disability.
Do you trade call or put options? The timing of recording the tax effect of options sold can sometimes require an adjustment to the prior year tax return.
Quebec will table their 2014 budget on February 20, Alberta and Manitoba on March 6, Saskatchewan on March 19. The BC Budget is being tabled today, February 18.
NWT tabled their 2014 budget on February 6, 2014, with no tax changes announced.
The half-year rule applies to most CCA classes, but only to some items in class 12 (which has 100% CCA), including computer software.
Enhanced Small Business Investor Tax Credit, no increases to personal taxes or HST.
Changes to treatment of charitable donations made by will, to registered plan beneficiaries, and by the estate; Adoption tax credit increase; New volunteer search and rescue tax credit; Changes to taxation of trusts and estates; Increased payroll remittance thresholds for employers; Tax on split income changes; Consultation re changes to eligible capital property regime and more.
An executor has many responsibilities. Familiarize yourself with these before handling any estate assets.
The tax rate for this tax credit was reduced to 8% from 20% effective March 28, 2013.
Not sure if you should start your CPP pension now or wait a few years? Let our CPP retirement pension calculator help you.
The 2014 WITB factors for QC have now been confirmed to CRA information, with some revisions done.
Know nothing about investing? See our recommended portfolios for novice investors.
So far we know the dates for 2014 budgets for 2 provinces. New Brunswick will table their budget on February 4, and BC will table theirs on February 18.
Swap transactions between RRSPs RRIFs or TFSAs and another account of the same owner will attract a 100% tax.
Most 2013 personal income tax returns have a due date of April 30, 2014. Self-employed individuals have until June 15th to file their personal tax returns, but any amounts owing must still be paid by April 30th.
The 2014 Economic Action Plan will be tabled in the House of Commons on February 11, 2014 at approximately 4 pm EST.
See our 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.
Legislative proposals and explanatory notes re proposed exemption from GST/HST for hospital parking for patients and visitors.
Both EFile and NetFile will be available February 10, 2014 to January 16, 2015 for filing 2013 tax returns. Most personal tax returns are due on April 30, 2014.
When are T4s required, and what income is reported? Filing T4s - no need to wait for a web access code.
Forgot to record your RRSP contribution made before March 2, 2013 on your tax return last year? Here's how to fix it.
Our calculator, updated with 2014 tax rates, may help you decide whether to pay down your mortgage or contribute to an RRSP. Tip: Unless your RRSP returns are going to be consistently higher than the rate on your mortgage, it is better to pay down your mortgage.
Need help deciding whether to contribute to TFSA or RRSP? Our calculator has been updated with 2014 tax rates.
Do you own rental property? Know the rules about deductions, capital gain or loss, recapture and other issues.
The WITB factors for 2014 are now available, but Quebec factors cannot yet be confirmed. The 2013 factors for Quebec have been revised based on new information.
Instead of withdrawing cash, you can withdraw investments from your RRSP or RRIF, by transferring them to another account.
Do you know all the rules about your RRIF withdrawals?
If you have made a donation in 2013 under a gifting tax shelter scheme, CRA will not assess your tax return until they have audited the tax shelter, according to their January 10, 2014 announcement.
Our table of investment returns on stocks, bonds and T-bills has been updated to include 2013. We've also added columns for returns since 1984, to reflect the earliest data we have for the S&P/TSX index. CPI for December is not yet available, so we've estimated using the Nov 2013 annual increase, and will update on Jan 24th.
See also Prior Years:
Revised: February 11, 2017
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