Tax update

Federal Budget – Personal tax update

 

As a follow-up to our first article on the proposed changes to corporate tax as a result of the 2015 budget, below are the changes to taxes and benefits for individuals that have been implemented as a result of the April announcement.

  • Savers – The maximum yearly contribution for Tax Free Savings Accounts (TFSAs) has been increased from $5,500 to $10,000 effective for 2015. Taxpayers can use the CRA’s online My Account portal or call 1-800-267-6999 to check their available contribution limit.
  • Seniors –Registered Retirement Income Fund (RRIF) mandatory withdrawals have been reduced from a starting point of 7.38% to a new mandatory withdrawal of 5.28%, helping to defer tax for Canadians over 71.
  • Families with children – The Universal Child Care Benefit (UCCB) has been increased from a monthly payment of $100 to $160 for each child under 6 years, and from $0 to $60 for each child aged 6 to 17. This payment was retroactive to Jan 1 and the increases were paid out with the regular monthly payment in July.  The UCCB remains a taxable benefit in the hands of the lower earning partner, and this new program is partly funded by the elimination of the child tax credit of $2,255 in 2015.  Additionally, the deduction for child care expenses is being expanded by $1,000 to $8,000 annually for children under 6, to $5,000 for children aged 7 to 16, and to $11,000 for children eligible for the Disability Tax Credit.
  • The government estimates that a typical two earner family of four in Canada will receive tax relief and increased benefits of up to $6,600 in 2015 as a result of the changes made.

Kris Omand

Kris Omland CPA-CGA

An accounting professional, with over 10 years experience in senior financial positions across North America. Areas of experience including: Corporate Restructuring, Mergers & Acquisitions, Lease & Contract Negotiation, Internal Audit, Human Resources, Scientific Research & Development Claims and Corporate Strategy

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