Tax season is coming! Whether you file your own taxes or use a professional Tax Accountants (www.ctlinterntional.ca), the key to a satisfactory, tension-free result is organization. Trying to make sense of a rat’s nest of paper receipts, canceled checks, brokerage statements, and other miscellaneous bits of information is frustrating and time-consuming.
There are changes and enhancements to existing services, credits, and amounts for the 2017 tax-filing season!
The federal government is ending four child tax credits this year: arts, fitness, education and textbooks in 2017. Parents of children under the age of 16 can pre-pay 2017 arts and fitness programs to claim them on 2016 tax returns as long as total spending for 2016 does not exceed $250 and $500 limits, respectively.
The government is also cancelling income splitting for families, a tax reduction measure that allowed someone to transfer up to $50,000 of income to a spouse with lower income if they had a child under 18 years of age. The tax credit for income splitting was capped at $2,000.
Offsetting those changes are the Canada Child Benefit and changes to Employment Insurance benefits introduced in 2016.
“High income earners in most provinces will pay more but for the majority of Canadians, these two changes will mean more money in their pockets”. Canadian Taxpayers Federation federal director Aaron Wudrick said Wednesday in a news release.
Several other changes at the federal level will affect life insurance, business owners selling their companies and some mutual funds.
Under changes enacted by the previous government, the tax treatment of universal life insurance policies will be less favourable starting Jan. 1. New policy holders will see a decrease in their ability to build up investment gains above death benefit premiums on a tax-free basis.
The new formula for calculating insurance will make policies a little more expensive or reduce death benefits, says Jason Safar, a PricewaterhouseCoopers partner specializing in personal taxes.
Business owners, large and small, will gain less from the sale of their operations as assets such as goodwill and trademarks will become fully taxable as investment income. Currently, half of the proceeds can be distributed tax-free as a dividend.
Investors will also no longer be able to rebalance their non-registered mutual fund investments in corporations structured as “switch funds” on a tax-deferred basis. As of the new year, capital gains from such moves will be taxed in the same way as equities.
Ontario will get an eight-per-cent rebate on rising hydro bills and see the maximum total cost of borrowing for a payday loan lowered to $18 per $100 borrowed from $21 per $100.
The province is also doubling the first-time homebuyers’ maximum land transfer tax refund to $4,000 and is introducing its carbon cap and trade system.
British Columbia is scrapping medical services plan premiums for children and young adults attending school.
Alberta is reducing its small business corporate income tax rate from three per cent to two per cent. It is also introducing a carbon tax on the purchase of fossil fuels, offset with a rebate for low- and middle-income earners.
The federal government and provinces have already mostly implemented tax changes announced in their 2016 budgets.
Jason Safar, of PricewaterhouseCoopers, said more changes are possible in 2017. He said the federal government could eliminate more tax credits and could feel pressure from possible personal and corporate tax cuts in the United States.
Small businesses and self-employed individuals:
Tax Strategies to Reduce Income Tax as Below:
1. Manage your RRSP contribution.
2. Maximize your non-capital losses.
3. Maximize your charitable income tax credits.
5. Split your income.
6. Take full advantage of the income tax deductions available to home-based businesses.
7. Incorporate your business?
One reason many sole proprietors and partners incorporate their businesses is because of the tax advantages of incorporation.
Incorporating your business as a tax strategy will only be effective if your business has grown enough for incorporation work.
Start Reducing Your Income Tax Today
Tax Planning is a process of looking at various tax options in order to determine when, whether, and how to conduct business and personal transactions so that taxes are eliminated or considerably reduced.
CTL Business Group provides professional tax returns for corporations and personal/self employment. Our professional Tax Accountants and Certified Management Consultants will analysis your situation and give you the best tax solutions.
Our business skills training school provide Tax Preparer courses for business owner and Accountants.
Make an appointment, contact us: Canada 587-3538067; USA 626-8176528; Taiwan & Asia: 02-27056845
Email us: email@example.com