Year End Tax Letter 2016
February 2, 2017 - 0
Another tax season is upon us and there are number of new things this year to keep in mind:
The tax filing deadline this year is Monday, May 1 as April 30 lands on a Sunday this year. In situations where at least one spouse has a business that is not incorporated, the deadline for both is then Thursday, June 15 although taxes owing must be paid by May 1.
Starting with the 2016 tax year, you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption.
The deadline for RRSP contributions to be recognized on your 2016 tax return is February 28, 2017. Your 2015 income tax Notice of Assessment issued by the C.R.A. specifies your 2016 contribution limit. Be careful of your contribution limit as penalties apply if you over-contribute by more than $2,000.
If you have any assets in another country (personal use vacation property is excluded), you must report them to the CRA this year – make sure to mention this to me early so we can get on top of these very onerous forms.
The TFSA limit is $5,500 for 2016. The total lifetime cumulative limit is $52,500.
The Family Tax Cut, was eliminated in the 2016 Federal Budget.
The Children’s Fitness Credit for 2016 is $500 ($1,000 in 2015) for each child under 16 and the Children’s Arts Credit is $250 ($500 in 2015). The Child Care Expense Deduction is $8,000 for children up to 6 years old and $5,000 for children 7 to 16 years old.
The refundable Child Tax Credit and Universal Child Care Benefit ‘UCCB’ have been eliminated effective June 30, 2016. They were replaced by the Canada Child Benefit which is now income indexed and includes benefits for children up to 17 years. This change provided an additional $720 per year for each child under 18 depending on Family Income. The increased payments began in July of 2015.
And remember, although my office prepares your tax return, you are responsible for certifying the information reported.
Carl O’Connell CPA CA