Take advantage of changes to your tax return: Courtenay accountant                           

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.

“As of January 1, the federal tax rate for people earning between $45,283 and $90,563 was reduced to 20.5 per cent from 22 per cent,” explains Cahoon. “For those earning over $200,000 it was raised to 33 per cent from 29 per cent. This, combined with a new ‘high rate’ for donation credits to encourage charitable donations, should influence how high income earners approach their tax planning.”

Though her focus is on looking ahead, Cahoon notes that there are also some changes to 2015 tax returns, which must be filed by April 30.

“The Child Tax Credit is no longer available,” she says. “The good news is that claimable child-care expenses have increased, and the Children’s Fitness and Arts Tax Credit is now refundable, which will help out lower income families.

“As with any new credits, it’s a good idea to check with your accountant to ensure your expenses qualify,” she adds. “With all these changes happening in 2016, more than ever it’s a good time to speak with a CPA, look at the big picture and plan for your future.”

For help with your 2015 return, or to find out more about the current year, contact Nicole Cahoon, CPA, at 250-871-1121 or online at www.nicolecahoon.com.