SIGNIFICANT RULE CHANGES WERE ANNOUNCED IN NOVEMBER 2023, THE BELOW MAY NOT APPLY FOR MANY TAXPAYERS IN CALENDAR YEAR 2023 DUE IN APRIL 2024.
UPDATE - JAN 31 2023 the form was released by CRA; Also we have received access to a useful Quick Reference Chart for you to use from our friends at Video Tax News - click here
It is RRSP time of year again. We have until March 1, 2017 to make our annual RRSP contributions to our 2016 RRSPs. Most investment advisors will be knocking on your door saying that it is time to contribute to your RRSP. An RRSP is great for advisors as they lock in capital for investing and it can give a large tax refund that can increase your investments. Here are the five biggest mistakes I see people make with RRSP contributions.
Mistake 1 – Taking the deduction in the same year as contribution
It is overtime in the championship Grey Cup game between Ottawa and Calgary. The score is 33-33. Burris, the Ottawa Quarterback and the oldest Quarterback to have ever started a Grey Cup, throws the ball to an open Ernest Jackson. Everyone pauses as Ernest bobbles the ball in his hands. Is it going to be caught? Will Ottawa win the 2016 Grey Cup? Ernest catches it! He catches it! Ottawa Wins! Ottawa Wins!
When Adam came in to my office I could see the sweat forming on his forehead. He was finishing residency soon and his wife Amanda was 20 weeks pregnant and they were getting ready to enter a new life chapter. He was no longer going to be a student but now a main breadwinner and a father. After talking about the upcoming baby and me showing some photos of my two kids we got in to how life will be changing when he ends residency and starts his staff position. Having maxed out his RBC line of credit ($250,000) he wants to start planning for the future.
LIBERAL TAX CHANGES ANNOUNCED
Today the Liberals revealed the details on its ‘Tax Cut to Strengthen the Middle Class’ by reducing the federal tax bracket from 22% to 20.5% on incomes between $45,282 and $90,563 for the 2016 year. Those with incomes over $200,000 will pay more tax at a federal rate of 33%. Anyone with ordinary income over $45,282 and under $216,000 will benefit from this tax reduction.
Hear are some points to be aware of.
New tax provisions were signed into law on July 31st, 2015, changing the filing deadlines for many U.S. tax returns and forms. Please keep the following changes in mind for tax years starting January 1, 2016.
Below are a list of the major income tax changes that are effective for the 2014 taxation year.
No more safety deposit box – The deduction for amounts paid for the use of a safety deposit box of a financial institution will no longer be allowed.
Family Tax Cut – For eligible couples with minor children, a $2,000 non-refundable tax cut will be available. The Family Tax Cut is calculated based on the reduction to you and your spouse’s combined federal taxes if up to $50,000 of taxable income was transferred from the high income spouse to the lower income spouse.