Tax time is typically about looking back at the previous year. This year, however, one local tax professional says it pays to look forward.
“This year is a bit unique in that it’s not so much about capitalizing on credits or cuts for last year, but planning and adjusting to make the most of newly introduced amendments,” says Certified Professional Accountant (CPA) Nicole Cahoon. These amendments, she adds, affect minimum RRIF and RPP withdrawals, capital gains exemptions for fishing and farming properties and much more.
“One change that got attention during the election is that TFSA (tax-free savings account) contribution limits have dropped from $10,000 to $5,500 for 2016,” explains Cahoon. “It’s very important that people don’t over-contribute to their TFSAs because, like with RRSPs, the Canada Revenue Agency will charge penalties on that – and they can be costly.”
Cahoon also gives the example of the new Home Accessibility Tax Credit, applicable toward expenses incurred for qualifying home renovations. Available to people who are either 65 or older at the end of 2016 or eligible to claim disability tax credits, the credit applies to any renovations or improvements that allow you to gain access, be more mobile or reduce the risk of harm within or while gaining access to your home.
And then, of course, there are the changes to tax rates for 2016.