{"id":1133,"date":"2016-03-16T20:38:02","date_gmt":"2016-03-17T00:38:02","guid":{"rendered":"http:\/\/andrewwbradley.ca\/Retirement-Made-Easy\/?p=1133"},"modified":"2016-03-16T20:38:02","modified_gmt":"2016-03-17T00:38:02","slug":"seven-changes-incomes-taxes-2016","status":"publish","type":"post","link":"https:\/\/blog.andrewwbradley.ca\/index.php\/2016\/03\/16\/seven-changes-incomes-taxes-2016\/","title":{"rendered":"Seven changes to income tax in 2016"},"content":{"rendered":"

Tax season is upon us, and there are a number of changes to keep in mind for your income tax return this year.
\nChristina Commisso<\/a>, CTVNews.ca Writer<\/span>
\nPublished Monday, March 7, 2016 6:30AM EST <\/span><\/a>
\nLast Updated Tuesday, March 8, 2016 12:45PM EST<\/span><\/a>
\nCTVNews.ca has highlighted some of the major changes that can impact how much you owe, or what kind of return may be in store.
\nFamily Tax Cut<\/strong>
\nThe controversial income-splitting benefit ushered in by the former Conservative government in 2014 is on its way out, but some families can still benefit from the tax cut in their returns this year.
\nThe Family Tax Cut allows parents or common-law partners with children under 18 years old to split their income to shrink their tax burden. The higher-earning partner can transfer up to $50,000 of income to the lower-earning partner, for a tax credit of up to $2,000.
\nCaroline Battista, senior tax analyst with H&R Block, says income splitting is most beneficial for spouses or common-law partners who have a big difference between their incomes. But she recommends that all families take a look at the credit.
\n\u201cI\u2019ve seen people who might not get the full $2,000. But I had many clients last year that got $300 or $400, and who wouldn\u2019t want that?\u201d Battista told CTVNews.ca
\nEnhanced Universal Child Care Benefit<\/strong>
\nThe Enhanced Universal Child Care Benefit, which was introduced in 2015, is also on its way out, with the Liberal government promising to introduce a new, tax-free Canada child tax benefit later this year. However, families will have to account for the UCCB when they file their tax returns this year.
\nThe UCCB saw families receive $160 per month for each child under six years old, and $60 per month for each child aged six through 17.
\nBattista points out that families will have to pay tax on the UCCB, which replaced the Child Tax Credit that was worth an average of $337 per child.
\n\u201cSo people are seeing smaller refunds,\u201d she said.
\nNew tax brackets<\/strong>
\nThe Liberal government campaigned on a tax cut for the middle class and a tax hike for the top one per cent of income earners.
\nBeginning this year, the federal marginal tax rate on those earning between $45,283 to $90,563 will drop from 22 per cent to 20.5 per cent. Those earning more than $200,000 will see their tax rate increase from 29 per cent to 33 per cent.
\nPaul Woolford, tax partner at KPMG, says it\u2019s important for higher-income earners to keep these changes in mind when filing their 2015 taxes.
\n\u201cFor those higher income earners, there\u2019s some thought of not deducting your RRSPs in 2015 and applying it in 2016,\u201d he said.
\nWoolford said the same goes for other discretionary deductions, such as certain medical expenses.
\n\u201cYou\u2019re forgoing a benefit in 2015, but in theory you should get a bigger bang for your buck in 2016, when you\u2019re taxed at potentially a higher level,\u201d he said.
\nChild-care expenses<\/strong>
\nThe amount parents can claim for child-care expenses has increased by $1,000 annually, per child, to $8,000 for a child under six and $5,000 for a child aged between seven and 16 years old.
\nChild fitness tax credit<\/strong>
\nThe child fitness tax credit has changed from a non-refundable to a refundable credit, meaning that families who claim the program cost or registration fee for a physical activity can now receive up to $150 per child.
\nBattista said, since non-refundable credits go towards taxes you owe, lower income families often don\u2019t submit the expenses.
\n\u201cThe good things about changes to the fitness tax credit to a refundable tax credit, it means that lower income families will still get the same benefit,\u201d she said.
\nCanada Apprentice Loan<\/strong>
\nStudents in a designated Red Seal trade program can now claim interest on their government student loans.
\nTax-Free Saving Accounts<\/a><\/strong>
\nThe Liberal government is reducing the contribution limit for Tax-Free Saving Accounts to $5,500 after the former Conservative government raised the limit to $10,000 in 2015.
\nBut Woolford said it\u2019s important to keep in mind that there\u2019s no loss of the $10,000, as the room\u00a0 in your TFSA accumulates, and you can use it in later years.
\n\u201cThere\u2019s no benefit of a tax deduction, but you can invest without paying tax,\u201d he said. \u201cThe takeaway is: don\u2019t lose sight of that, that\u2019s an important vehicle to shelter investment income<\/p>\n","protected":false},"excerpt":{"rendered":"

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