It’s still early in the year but it’s never too soon to start thinking about your taxes. It may not be a favourite topic but taxes are an important part of your financial plan. And there are some new credits that could yield bigger refunds for Canadian families over the next couple of years. Now that should help make the topic of taxes a little more exciting!
Caroline Battista from H&R Block Canada highlights the top three new credits for your 2014 tax return:
1) Increases to the Universal Child Care Benefit: Meant to help with some of the costs of childcare, the Universal Child Care Benefit (UCCB) will increase to:
- $160 (from $100) monthly for each child under six
- $60 (from $0) monthly for each child between six and 18.
The increase for January to June will be paid in a lump sum in July 2015 and the adjusted payments will arrive monthly after that.
2) Children’s Fitness Tax Credit Doubled: The amount you can claim for the Children’s Fitness Tax Credit has doubled to $1,000 and is retroactive for 2014. This can be claimed by either parent for qualifying activities such as swimming, martial arts or hockey.
3) New Family Tax Cut: Designed as a limited form of income splitting, the Family Tax Cut provides a credit to families with children under 18 equal to the tax savings that would be realized if up to $50,000 of taxable income were transferred from the higher income to the lower income spouse or common-law partner. Households where one spouse earns considerably more than the other will benefit the most.
Here’s how it would work:
Spouse 1 earns $53,953/year
Spouse 2 earns $20,000/year
Spouse 1 has $10,000 of income that is taxed at a rate of 22 per cent. However, if Spouse 1 could transfer $16,976 of income to Spouse 2 so their income would be split equally. It would look like this:
Spouse 1- taxable income of $36,976
Spouse 2- taxable income of $36,976
Now both would be taxable at the rate of 15 per cent, which would result in a difference of $700 in their total tax liability. So one of them can claim a family tax cut for this amount. The maximum credit is capped at $2,000 and in order to qualify the family must have a child under the age of 18 at the end of the year who normally resides with them throughout the year.
Keep in mind that in addition to these new credits, there are many other ways to increase your tax refund or reduce your tax owing. For example, the First-Time Donor Super Credit provides extra credit for first-time donations. And married and common-law spouses can pool charitable donations, public transit passes and medical expenses to maximize their tax savings.
For more information on what you can and cannot claim, an H&R Block tax professional can walk you through what’s new for your tax return this year. For more information please visit www.hrblock.ca.
H&R Block Canada has graciously offered a $100 Gift Certificate for one lucky winner of this giveaway to use towards the cost of one personal tax return filed by them. Please see below for all details.
Giveaway Details and Disclaimer
Winner must live in Canada. Winner must be 18 years or older to enter. Winner entry will be verified. Winner will be notified by email. Winner has 48 hours to respond before a new winner is selected. Winner must supply Canadian mailing address. The prize is a $100 Gift Certificate from H&R Block Canada to be redeemed when using H&R Block Canada to prepare one personal tax return. Delivery of the prize is the sole responsibility of H&R Block Canada. The gift certificate will cover tax filers who have employment income on a T4. They can have other slips such as T5s or T3s as well as RRSP receipts and still be able to use the gift certificate towards their tax preparation. Since self-employed returns are more complex and require more tax professional time, they are not covered under a standard gift certificate. If a person has self-employment income, they are not eligible to use the gift certificate.Please note that Tackling Our Debt is not responsible if prize is not transferred due to inaccurate communication. Facebook, Twitter, Pinterest, and Paypal are in no way associated with this giveaway. By providing your information in this form, you are providing your information to me and me alone. I do not share or sell information and will use any information only for the purpose of contacting the winner.