It’s no secret that with the introduction of every new government budget comes changes to your tax obligations and in many cases the introduction of new taxes.
Below are eleven of the most important changes to Canadian taxes in 2014 which could affect how you fill in and file your 2013 tax return.
1. Adoption expenses tax credit
If you are planning on starting, or are in the midst of the adoption process, you’ll be glad to hear that you can claim back expenses incurred in the process from the moment you submit an application for registration with a licensed adoption agency or a ministry responsible for adoption. If your application to the Canadian Court is made prior to your registration with adoption firms, you can start to claim the credit from this date instead. The extended period for application for this tax credit was extended in the 2013 Canadian Budget.
2. Tax free savings account limit raised
Last year the amount you could contribute to your tax free savings account was raised by $500 – from $5000 to $5500. This remains the same for the 2014 tax year.
3. Safety deposit box deduction
For many years, individuals and corporations have been able to use a safety deposit box to store documents related to their investment portfolio. As of mid last year, this tax deduction has been revoked and so can no longer be claimed.
4. Pooled registered pension plans (PRPP’s)
PRPP’s are voluntary pension plans aimed at those who don’t have a pension plan set up through their employment. The programme pools all workers contributions together and then regulates and distributes them as necessary through a third party. At the moment, only certain individuals can register for a PRPP, but for those who qualify your contributions to your account are deductible for income tax purposes. You can read more about PRPP’s here.
5. Stop International Tax Evasion Programme
This year, the CRA introduced a new incentive programme to catch large – scale tax evaders. Those who provide genuine and useful tips surrounding the suspect tax activities of individuals or corporations which leads to the recuperation of unpaid taxes of at least $100,000 will receive between 5 – 15% of the tax collected.
6. Overseas employment tax credit
If you work for an overseas branch of a Canadian company in the areas of natural resources, agriculture, engineering, installation and construction, you may be able to claim this tax credit. The credit is slowly being phased out, and will be unavailable from 2016 onward, but until that time the amount you can claim is being slowly reduced. The credit is normally equal to the tax payable on 80% of your income, or $80,000 (whichever is less) but as the credit is being phased out you can now only claim 60% of your income. The amount you can claim for will be continually reduced from now until 2016 when the credit will be eliminated entirely.
The average Canadian tax refund is $998
7. First time charitable donations
If you've never made a charitable donation before, but are planning on making your first one now, you couldn't have picked a better time. The government has just introduced a first time donor credit for the first $1,000 donated for first time donors. However, you can only claim the credit once between 2013 and 2017.
8. Lifetime Capital Gains Exemption
As of 2013, the exemption has been increased to $800,000. Those who had already reached the $750,000 LCGE limit prior to the increase are still eligible.
9. Family Caregiver Amount
The family caregiver credit of $2000 that was introduced in 2012 has been increased to $2040 for the 2013 tax year. The credit allows those who are primary carers for dependents with a physical or mental impairment to claim an additional $2040 on top of the other credits they can claim as a caregiver.
Want to make sure you claim all the tax credits and deductions you're due on your tax return? File your return with us! Canadian citizens who file their tax return with us get an average tax refund of $904, so don't delay - start by using our free tax refund calculator to see how big your tax refund could be then download and fill out the tax refund application form and you're on your way to getting a tax refund! If you’re still unsure of your Canadian tax obligations or whether or not you can get a tax refund, contact us via live chat or email Canada@taxback.com for advice and assistance.