Tax News UpdatesLegislative changes are an ongoing process and it is very important to be aware of any news or changes which might affect your financial well being.
Changes in the economy have a large influence on the taxes we pay, the tax credits and income tax deductions we get and on our spending habits. Government budgets create new opportunities to save on taxes.
Tax News for the 2010 tax yearNew changes this year present tax planning opportunities for single parents, students, self-employed individuals, seniors, and investors. The benefits of lower provincial taxes by Ontarians will be felt primarily by lower income earners.
Lower Ontario Tax rates.The tax rate at the lowest tax threshold has been reduced to 5.05%, from 6.05% and the surtax threshold levels have changed. Lower levels also apply to the donations and gifts tax credit
Universal Child care benefits (UCCB)A single parent now has the option of including the UCCB amounts in her/his income or as income for the dependent. By declaring the UCCB as dependent income, the individual's net income and taxable income will decrease, resulting in a lower tax bill. It is a good idea to set up a separate bank account, in the dependent’s name, to receive the payments.
Special relief for tax deferral elections on securities optionsThis includes employee stock option programs and allows the employee to defer paying taxes on securities which they didn’t exercise.
Scholarship programA scholarship exemption is awarded for post secondary programs which deal mainly with research and which lead to a degree or diploma.
Employment Insurance premiums for the self-employedFor the first time self employed individuals have the opportunity to contribute to the employment insurance program. The taxpayer must indicate their willingness to join the program and must earn more than a minimum amount to be eligible
Medical ExpensesBeginning this year medical expenses for cosmetic surgery will be restricted to only those that are required for medical or reconstructive purposes. This applies to all procedures and related expenses incurred after March 4, 2010
Investment tax creditEligibility for the mineral exploration tax credit has been extended to flow through shares agreements entered into before April 1, 2011
Ontario Property and Sales Tax CreditThis credit has been replaced by two separate credits: the Ontario Sales tax credit which is issued in four installments and the new Ontario Energy and Property Tax Credit. A new Form ON-BEN, which includes the Application for the 2011 Ontario Senior Home owner Property tax Grant, the 2011 Ontario Energy and Property Tax credit and the Northern Ontario Energy Credit, must be submitted with your tax return
New Ontario Children’s Activity Tax Creditsare based on fees that relate to the cost of enrolling in qualifying extracurricular programs. This is a refundable tax credit.
Tax News for 2009 season
For the 2009 tax season, the tax news is generally positive and should lead to more savings for the average tax payer. Some of the more positive developments in the news are....
Personal and spousal amounts will increase for the 2009 tax year
Home Buyer's Plan. Allowable amounts have been increased to $25,000 from $20,000 dollars for RRSP withdrawals used to purchase a home, by first time buyers.
This is the first full year for the TFSA. In order to qualify to contribute, a tax return must be filed. Uncontributed amounts from last year can be made this year, in addition to this year's contribution.
Also in the news, new initiatives will allow self employed people and sole proprietors to be eligible for Employment Insurance starting in 2010. If the agreement is entered into before April 30,2010 a person could be eligible to apply as early as January,2011. After April it will be on a calendar basis.
**There are a few more caveats of which one should be aware, before making this move, but overall this could prove to be very useful for the small business owner or self-employed person.
The Home Renovation Tax Credit is proposed to end in February 2010. Although there is some tax news suggesting that it will be extended, it is prudent to get as much as possible done and paid for, by the deadline.
The tax news for small business owners brings an increased small business deduction.
Tax News for 2008 season
For 2008 both individuals and small businesses should experience some savings in their income taxes. Some of the measures came into effect during the year, while others will be phased in over several years.
Most personal amounts will see small increases for the 2008 tax year. The CPI for 2008 is 1.9%.
Personal Tax Rates
Federal Rates for 2008
Personal amounts,tax brackets and income which reduces personal amounts for certain dependents are indexed to the Consumer Price Index. The Consumer Price Index is influenced by our spending. Any increases in personal amounts will fluctuate with these changing rates.
Effective July 1, 2006 Canadians will get a tax credit of up to $500.00 on employment income. This will double to $1000 as of January 1 2007
The Universal Child care Benefit (UCCB) is a new taxable benefit paid monthly to help eligible families provide child care for children less than 6 years of age.
The UCCB will pay families $100.00 each month for each child under six years of age. The payment will be paid separately from the Child tax credit and will not affect federal income-tested benefits.
Families will receive a child fitness tax credit for up to $500.00 in eligible fees for physical fitness programs for each child under age 16
The maximum annual Child Disability Benefit has been increased from $2044 to $2300. Middle and high income families caring for children who are eligible for the disability tax credit are also eligible.
In addition, the maximum amount of the refundable medical expense supplement has been increased from $767 to $1000.00
Publicly listed securities which are donated to public charities are exempt from the capital gains tax, effective immediately. Also exempted are donations of ecologically sensitive land under the Ecogift program.
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