The Canada Revenue Agency (CRA) has many new services and changes in-store for us this coming tax season.
Here are 5 of the changes that might affect your 2016 personal tax return:
1. Income Splitting Tax Credit
In prior years the Family Tax Cut was a considerable benefit to spouses when one spouse had earned significantly more money than the other. For 2016 and future years it has been eliminated. Thankfully the ability to split pension income with your spouse or common-law partner is still available.
2. Children’s Fitness Tax Credit
The maximum amount of eligible fees in the year has been reduced from $1,000 per child to $500. The amount for children eligible for the disability tax credit has not changed
3. Children’s Arts Tax Credit
This has also been reduced, this time from $500 to $250 per child. The amount for children eligible for the disability tax credit has not changed
4. Home Accessibility Tax Credit (HATC)
Starting in 2016 you can claim a non-refundable tax credit for eligible expenses incurred for work performed or goods acquired for a qualifying renovation. For an explanation and examples of what is eligible see CRA link here.
5. Principal Residence Rules
Effective January 1, 2016 you are required to report the basic information on your tax return when you sell your principal residence to claim the full principal residence exemption. Basic information is; the date purchased, proceeds of the sale and the address. I wrote about this in a previous blog posted October 13th if you would like more details and the reasoning behind this new rule.
The CRA is also expanding its Community Volunteer Income Tax Program (CVITP). This service helps Canadians with modest income and a simple tax situation complete their tax returns, while ensuring all eligible credits and benefits are received. CRA is currently still recruiting more organizations and volunteers for participation. Here is a link to determine if you might be eligible for this free service, and current locations near you.
And if your tax return is complicated, your circumstances have changed from prior years or you started a business, talk to a tax professional. Contact us for a consultation to help determine eligible expenses to offset your income. You don’t want to give more money than necessary to the CRA!
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Until next time,