With this being tax time and all – I thought I would write an article relating to Income Taxes and some of the programs you should be aware of that can help reduce income taxes payable or help supplement your income tax free. I will list some of the items in this article and complete the list of the major items in the next article.
Tax Free Savings accounts
(TFSAs) – This is a program whereby any earnings on the funds deposited to the account are not taxable. You can contribute a maximum of $5,500 per year, and unused room is carried forward. If you withdraw funds in the current year though, you have to wait until next year to re-contribute, unless you have additional contribution room. Your annual notice of assessment shows the contribution room you have, as long as you have been properly reporting deposits and withdrawals..
Universal Child Care Benefit
– Families with children under the age of 6 can receive $100 per child per month as a payment from the Federal Government. This has to be applied for.
Hiring Credit for Small Businesses
– When hiring additional employees, of course the employer share of Employment Insurance increases, as does Canada Pension Plan. The Federal Government provided up to $1,000 against an employer’s share of increased EI premiums. This is an automatic credit which the employer will see in 2014 for increases that took place in 2013.
Public Transit Tax Credit
– The Federal Government has been trying to encourage individuals to leave the car at home and take public. Accordingly, if you purchase a monthly or annual transit pass, or your employer purchases these for you, you can claim a non-refundable tax credit in the amount of 15% of the cost of the passes.
First-Time Home Buyers’ Tax Credit
– An individual purchasing their first home, based on certain qualifications, can receive a tax credit of up to $750, and it is also available to those eligible for the Disability Tax Credit when they purchase a more accessible or functional house, even though they have already owned a house. It can also be applied where the benefit is for a related person.
– A taxpayer, who has children under the age of 16 (or 18 if the child is disabled) can claim a tax credit of up to $500 per child against costs incurred and paid to an organization providing eligible programs of physical fitness. The criteria is slightly different for Nova Scotia and Manitoba.
– Following along the same lines, there is also a tax credit in the amount of $500 per child available to parents of children participating in artistic and cultural programs against receipts provided by organizations. Again, the receipts must be issued by organization that is qualified to provide such programs.
Canada Employment Amount
– unless you are self employed, you can claim up to a maximum of $1,117 on your tax return – this amount is to off-set expenses that you may incur such as having to have a computer at home to meet some of the needs of your job. There is no proff of expenditures required.
- Bill Smyth CPA, FCGA, FCPA
For more information contact info@onpayroll