Every year CRA makes changes to the rules for preparing your personal income tax return. Here are the changes (both proposed and approved for this tax season).
Just before we talk about the changes, let’s start with Do you have to file a 2015 personal income return? And if you don’t have, why might you want to?
| You Have To File A Tax Return If: | You Might Want To File A Tax Return If: |
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When is your return due?
This year, April 30th falls on a Saturday, so you get an automatic extension until Monday, May 2nd. If you or your spouse have self-employed income, you have until Wednesday, June 15th to file your return – BUT – your taxes are still due on May 2nd. And if you have to figure out what you owe, then you might as well just finish and file your return then as well!
New Tax Changes For 2015 Tax Returns
1. MyCRA Mobile App
CRA has introduced a “sort of” mobile app so you can access your own personal tax information on the go. Go to cra.gc.ca/mobileapps and select MyCRA. You can then create a shortcut to access your information easily, from anywhere. Before you can access your information, you will need to register for online access with CRA or use your online banking sign in information. To use the CRA registration option, go to CRA’s web site, do a search for online access and follow the instructions.
So what does myCRA give you?
- Check your RRSP & TFSA contribution limits
- Check the status of your return (once you’ve filed)
- Look at your Notice of Assessment
- Pay your taxes owing using Interac Online
- Calculate your tax credit if you’re considering making a charitable donation
- Check the status of a charity (to make sure you’ll get the credit)
2. Universal Child Care Benefit (UCCB)
This benefit has increased to $160 per month per qualified dependant less than 6 years old. In addition, there is a new benefit of $60 per month for qualified dependants between 6 and 17.
3. Child Care Expenses
The maximum deduction has increased by $1,000 per child. (Children born in 2009 or later goes from $7,000 to $8,000; those born in 1999 to 2008 goes from $10,000 to $11,000).
4. Family Caregiver Amount for Children Under 18 Years Old
The amount for children under 18 has been eliminated – replaced by the $60 per month UCCB for older children.
The same line number on the return is now a Family Caregiver amount (non-refundable tax credit) for families with children under 18 who have an impairment in either physical or mental functions.
5. Family Tax Cut
For 2014 on, the family tax cut calculation has been modified to take into account unused tuition, education and text books transferred from a spouse. This can help reduce a family’s income taxes by up to $2,000 if all required criteria are met. If this change increases your benefit for 2014, CRA will automatically recalculate the amount for you and issue you a refund.
6. Children’s Fitness Tax Credit
This has been converted to a refundable tax credit – which means that if you don’t need the amount to reduce your taxes, it could result in a refund to you anyway. The refundable portion could be as much as 15% of the total eligible fees.
7. Repaying RRIF, RPP and Other Qualifying Amounts
There are rules that specify the minimum withdrawals taxpayers must make from their RRIFs, and other retirement vehicles each year. In 2015, the government changed the rules and reduced the minimums. That meant many taxpayers had taken out more than they had to, and more than they wanted to.
If you are part of this group, you are permitted to repay the “excess payment” – as long as you do it by the end of February 2016. They will issue you paperwork that will allow you to deduct this repayment on your 2015 tax return.
8. Interest on Student Loans
Interest paid on a Canada Apprentice Loan amount for registered Red Seal apprentices now qualify for this deduction. Interest on other qualified student loans continue to be deductible.
Qualified loans ONLY include loans made under the Canada Student Loans Act, Canada Student Financial Assistance Act and the Apprentice Loans Act. A student line of credit with your bank does NOT qualify.
9. Reporting for Foreign Property
2014’s rules required a lot of work to properly file Form T1135 (Foreign Income Verification Statement) for anyone who owned foreign property with a total cost of $100,000 or more. This year, CRA is simplifying the required reporting for people with foreign property total of up to $250,000.
There is a $2,500 penalty per year if you don’t file this firm and you’re supposed to.
10. TFSA
For 2015, you were permitted to contribute $10,000 to your TFSA rather than the regular $5,500. Expect this contribution limit to return to $5,500 for 2016.
| Year | TFSA Annual Contribution Limit | TFSA Cumulative Contribution Total |
|---|---|---|
| Each of 2009-2012 | $5,000 | $20,000 |
| Each of 2013-2014 | $5,500 | $31,000 |
| 2015 | $10,000 | $41,000 |
| 2016 | $5,500 | $46,500 |
11. Penalties for “Missing” Income
In the recent past, CRA introduced a very nasty penalty if you were caught not reporting income in more than one tax year. For 2015, you will only have to worry if the missing amount is $500 or more.
It didn’t matter whether the tax had already been paid or not. For example, if you had a T4 slip for $10,000 that you forgot to report, and you were assessed this penalty, you would find the penalty was 30% of the missing $10,000 income or $3,000 plus interest from the day it should have been reported. Oh – and this is just a penalty – you had already paid the tax!
Conclusion
Your objective is to take advantage of every deduction and tax credit to which you are entitled, so you minimize the taxes you must pay to CRA. Unfortunately, CRA is under no obligation to inform you of any eligible deductions or credit that you may have overlooked.
This article highlights only a few of the many, many tax deductions and credits available to taxpayers. It is always prudent to have a qualified tax preparer complete your return.
Speak to our qualified tax preparers so we can do a full review of your current financial circumstances with the possibility of discovering deductions or credits for which you did not know you were eligible. And let us help you plan to take advantage of other tax planning opportunities going forward.
