It’s tax season again. and just like every other year, there are changes that we want to share with you so that you’re up to speed on your personal taxes.
No More Child Fitness and Arts Tax Credit
The government cut the credits available for children’s arts and fitness, which means the days of keeping receipts for hockey, soccer and music lessons are gone. This will save the CRA lots of administrative resources, since they no longer have to deal with all the receipts.
New Canada Child Benefit
The tax credits for children’s fitness and arts, as well as the Universal Child Care Benefit (UCCB), have been replaced with the Canada Child Benefit (CCB). The new program provides families with monthly, tax-free cash payments that are tied to income levels. This means, the less income you have, the more cash you receive to support your family.
Transit Passes Up To June 30, 2017
This tax credit was cut half way through 2017, so only transit passes for the first half of the year can be claimed.
Changes to Tuition
The definition of eligible tuition has been expanded, which means that more than just Post-Secondary level courses are eligible. If you took any language, reading, math or other skills courses, these may now be deductible. However, they have changed some of the credits like the Education and Textbook credit.
New Canada Caregiver Amount
The new Canada Caregiver Amount is replacing the Family Caregiver Amount, the Caregiver Amount and the Amount for Infirm Dependants age 18 or older. Find out more by clicking here
You must now report the sale of your home
If you sold your home in 2017, you must now report the following info on Schedule 3 of your tax return. This is the schedule to report capital gains and losses. The tax exemption on gains on the sale of your principal residence still applies, however we now have to show what we are being exempt from:
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Sale price and date
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Date of purchase and purchase price
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Name(s) on title
If you lived in the property every year you owned it, you will not have to pay any tax on the capital gains. If the property was not your principal residence for all the years you owned it, you need to calculate the eligible portion on form T2091 of your tax return. As always, if you lost money on the sale of your home, you cannot claim the loss against income.
There is speculation about why the government now requires us to report this info, but as with most tax breaks, there are people that abuse the loophole.The target is on people that flip one or two houses every year, never paying tax on the gains, as long as they live there while renovating. This is a fine tax loophole to use, but when someone’s primary source of income, it is considered a business and the gov’t wants to tax it.
File on time to keep the benefits coming
If you don’t file your tax return on time, the government may put a stop payment on Guaranteed Income Supplement (GIS), Canada Child Benefit (CCB), GST/HST Credit, and Working Income Tax Benefit (WITB) payments. And these are just the federal programs, provincial programs may also be stopped.
File your own taxes for free
It might be strange to hear from an accounting firm, but it’s true. You can now file your own taxes online, for free. Click Here to watch a video on how to do this.
New Automation
This year we saw two pretty slick features that make doing your own taxes easier:
Auto-Fill My Return: most of your information and T Slips for 2017 should be available for download on your CRA My Account. Current tax software programs will download these forms from your CRA MyAccount and will auto-populate your tax return. You do need to manually enter anything the CRA wouldn’t have like, business, farm or rental income, investment income (not on a T5 or T3 slips), medical, donations, foreign income, RRSPs, tuition, etc...
Express Notice of Assessment: if you are registered for CRA MyAccount, and you used Auto-Fill My Return, you can also get your Notice of Assessment immediately after filing. You need to be registered for online mail and you need to use software that supports this.
If you have not registered for a CRA My Account, you can do that by clicking Here
Direct Deposit
To get your refund cheque faster (~8 business days), sign up for direct deposit when you file. There’s a form on the tax return where you can enter the account info available from one of your void cheques. You can also just give this void cheque to your accountant.
Deadline
There’s nothing new when it comes to your personal tax deadline. All personal tax amounts owing are still due to be paid on April 30. Most people must also file by April 30, however, if you are a farmer, or are self-employed, you have until June 15 to file. The same dates apply to your GST if you are a sole proprietor.
As your accountant, we’re proud to stay on top of all tax changes that affect your business and personal taxes. If you have any questions about the changes above, feel free to call us and we’ll be happy to help you out.
Our CPAs have extensive knowledge of the changing tax laws – including ones related to self-employed business owners, freelancers, tradespeople, consultants and professionals. We provide bookkeeping and tax services to small business owners in Okotoks and Calgary, including everything from deductions, write offs, expenses, tax returns, GST filing and more.
Read more about Personal Tax topics that may be helpful to you and your small business.
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