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Every April I put out a short list of the changes to the Tax
Rules and here is this year's list. Check the bottom of the
article for links to additional resources and information.
CRA goes High Tech
MyCRA is a mobile app from the Canada Revenue
Agency. Using this app, you can view your notice of assessment, tax return
status, benefit and credit information, and RRSP and TFSA contribution room.
If you self-file using the software packages available, you
may have noticed that this year, you can download your T4, T4A, T3, T5
and RRSP slips (by signing into your CRA
MyAccount) and you no longer need to enter the information
manually. Don't forget to double-check the CRA's data before you file.
Tax Brackets and Tax Rates
Check the table below to see if you are impacted by the
changes to the tax brackets and to the rates. Note - these are Federal rates
only,
Personal income tax brackets
TFSA limit change
The limit for 2016
is a return to $5,500, down from 2015's limit of $10,000.
If you have been eligible for the TFSA since its inception and never
contributed, your total
contribution room is $46,500. Don't forget that you cannot
replace money taken out until the following calendar year (unless you still
have contribution room).
Child tax credit and UCCB
The child tax credit, worth an average of $337 per child, is
gone and parents must pay tax on the Universal Child Care Benefit (UCCB) they
started receiving last summer. The UCCB amounts are $160 a month for every
child under age six and $60 a month for children aged six to 17 since last
July. If you had a spouse or common-law partner in 2015, the partner with the
lower income claims the UCCB as income on line 117.
On July 1, 2016 this will change again, when
the new CCB (tax-free and tied to income), replaces the UCCB, the Canada
Child Tax Benefit (CCTB) and the National Child Benefit Supplement (NCBS,
part of CCTB).
Foreign income verification statement
Over the last several years there have been several revisions
to form T1135. These changes have increased the amount of information
that people were required to disclose about their foreign property and
income.
For 2015, the reporting
requirements have been simplified for people who own more
than $100,000, but less than $250,000 in foreign holdings, including rental
properties, trusts and investments. If you own $100,000 to
$250,000, you need to report only the total income from property held
and any gain or loss from its disposition. If you hold more
holdings, you must give more detailed descriptions of each type of
investment in each country.
Links and Resources
For more information, check out the following links:
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Tuesday, April 19, 2016
2015 Tax Tips
Do you need travel insurance?
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We all know that medical expenses in the USA are expensive,
but they are in other parts of the world as well. Here is an
example of costs in Mexico due to appendicitis.
If you have a group plan, Emergency Medical coverage may be
included in your plan.
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Sunday, January 10, 2016
New Year’s Financial Resolutions
Every year, I make resolutions about the areas of my life that I would
like to improve. The changes often never
even get started and rarely make it to December 31. I’d like to help you be successful if your
goals are financial.
In a recent Sun Life Financial survey, 66% of Canadians said their debt level was the same or worse than a year ago.
Step 1 – Make
a Goal.
It doesn’t matter if it’s saving 10% of your gross (or net) income,
saving $1000 so that next Christmas the expenses do not need to go on your
credit card (due to lack of cash flow), paying off your credit card every
month, putting aside 3 months income for a rainy day, or saving money for a
special vacation. All that matters is
that it’s your goal and that it means something to you.
Step 2 –
Determine your Cash Flow
You cannot save even $50 each month, unless you know where that money is
going to come from. So this step
involves reviewing your income and expenses.
Most experts suggest that 3 months is a good snapshot. Note: If you pay for items such as insurance
on an annual basis, you need to average those costs and add them to your 90 day
expenses.
Usually, a good start for this review is by looking through your bank and
credit card statements. Remember – all you
bank statement says for cash is that you withdrew it, it doesn’t tell you
whether you spent that money on giving your children money for school pizza
lunches or on $5 Starbuck coffees.
If you would like a spreadsheet to use for this exercise, let me know
and I can supply you with one.
Alternatively check out the one available on the Hello Life website.
Step 3 –
Review your Income and Expenses
So now that you know where your money comes from and where you spend it –
you need to determine what you can adjust.
Is it exchanging Starbuck coffees for ones you brew at home or buy at
Tim Hortons? Is it decreasing your clothing or eating in restaurants
budget? Does it require an entire review
of all of your spending habits?
If you need help with this step, contact me. I can either help you or
send you to a professional who can.
Step 4 –
Implementation / Action
Money that doesn’t “exist” is easy to save. If your goal is to pay down credit card debt,
you can set up an automatic payment from your bank account to the credit card
to occur as soon as your paycheck lands in your bank account. If your goal is savings, I can help you by
setting up an account for the savings and arrange the same automatic transfer.
As we all know, nothing actually happens unless you have an action
plan. Let’s work together to implement
your financial goals.
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