The most noteworthy Personal Income Tax changes for 2017 are related to the purchase of your principal residence. And the investment options you choose. Switching fund shares or investments in labour-sponsored venture capital corporations will now have an impact in your personal income tax . Income splitting has been eliminated. Anti-avoidance rules were extended on certain savings plan. Some tax credits applicable to your kids were eliminated.
We outline below some of the most relevant changes. There are multitude of tax credits and deductions that we will not be able to address in this post.
Anti-Avoidance rules for Registered Plans. The anti-avoidance rules force penalty taxes on prohibited or non-qualified investments. Registered education savings plans (RESPs) and registered disability savings plans (RDSPs) are now subject to anti-avoidance rules as of March 22 2017.
Children’s fitness tax credit and the Children art’s tax credit were eliminated for 2017 and subsequent taxation years.
The Tuition Tax Credit extends the range of eligible courses to include occupational skills courses that are undertaken at a post-secondary institution in Canada. It allows the full amount of bursaries received for such courses to qualify for the scholarship exemption.
Changes related to your residence
Reporting the sale of your principal residence. You do not have to pay tax on any capital gain when you sell your house. It only applies when your home was your principal residence for all the years you owned it and you did not use any part of it to earn income.
Home accessibility tax credit. This is a non-refundable tax credit for eligible expenses. These expenses are for work performed or goods acquired for a qualifying renovation of an eligible dwelling. Only applicable to qualifying individuals (i.e. an individual over 65 years of age or a person eligible for disability tax credit).
New Caregiver Credit: The Canada Caregiver Credit will provide a 15% non-refundable tax credit for (i) up to $6,883 of expenses incurred for the care of dependent relatives (i.e., parents, brothers and sisters, adult children and other specified relatives) with infirmities and (ii) up to $2,150 on expenses incurred for the care of a dependent spouse, common-law partner or minor child with an infirmity.
Deadline is approaching
Your personal income tax and benefit returns for 2017 are due on April 30th, 2018. You have time until June 15, 2018 if you or your spouse or common-law partner is self-employed.
You can file as early as February 26, 2018. Your benefit and credit payments are not delayed or stopped when you file in advance. Your spouse or common-law partner should also file a return early.
Tax preparation can be complicated. Let us save you time, and maximize your refunds. Please check now steps to get ready for this tax season.