From summer vacations and year-end holidays to the Stanley Cup playoffs, there are many times of year that Canadians typically look forward to, but tax season generally isn’t one of them.
If tax time makes your head spin, we believe that a good offence is the best way to minimize stress. This means being organized, ensuring you’re up to speed on the latest tax rules and seeking out professional assistance for filing your return. To help you with this, we’ve put together an update and checklist to ease the process.
Updated numbers for 2017
From tax credits and income brackets to contribution limits, important numbers related to your tax return can change from year to year. Here are some important updates to keep in mind:
- For 2017, the basic personal amount, age tax credit, Canada employment amount, disability amount, adoption expenses, and medical expenses are indexed.
- For 2017, the annual contribution limit for Tax-Free Savings Accounts (TFSAs) is $5,500, the same as it was for 2016.
- For 2017, the federal income tax brackets have been restructured:
|Tax Rate||Income Bracket||Tax Rate||Income Bracket|
|15%||$45,282 or less||15%||$45,916 or less|
|20.5%||$45,282 – $90,563||20.5%||$45,916 – $91,831|
|26%||$90,563 – $140,388||26%||$91,831 – $142,353|
|29%||$140,388 – $200,000||29%||$142,353 – $202,800|
|33%||$200,000 or more||33%||$202,800 or more|
Out with the old, in with the new
The availability and applicability of individual tax credits can vary from one year to the next. Here’s an overview of some of the key changes that apply for 2017:
- For 2017, the new non-refundable Canada caregiver credit replaces three previous tax credits: the caregiver credit, the infirm dependant credit and the family caregiver credit. The new Canada caregiver credit is available to taxpayers who care for a related dependant over the age of 18 who has a physical or mental impairment.
- As of January 1, 2017, the following credits were eliminated:
- Children’s fitness tax credit
- Children’s arts tax credit
- The federal public transit tax credit was eliminated with effect from July 1, 2017. A new non-refundable Ontario seniors’ public transit credit for all Ontarians aged 65 and over is available, effective July 1, 2017.
- The federal education and textbook tax credits were eliminated with effect from January 1, 2017, and the Ontario education and textbook tax credits were eliminated with effect from September 5, 2017. However, you can still claim any unused credits amount in 2017 and subsequent years.
Don’t miss the deadline
What would tax time be without deadlines? Here are two important dates to add to your calendar:
- In general, you must file your tax return by April 30 to avoid penalties.
- For our team to prepare your tax return by the deadline, be sure to provide us with all of your personal tax information by April 15.
If you are self-employed, you have a bit longer – until June 15 – to file your personal tax return. However, this extra time given to self-employed individuals is only for filing, not payment; you are required to pay any income tax you owe by April 30 at the latest.
Here to help
Tax time may not be fun, but it doesn’t have to be painful. At Michael Koff & Associates, we want to help you minimize your taxes and navigate tax season with maximum efficiency.
DOWNLOAD: 2017 PERSONAL INCOME TAX MEMO