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TaxTips July 2019: AB tax changes; Tax comparisons; Part-time jobs/tax deductions; Enhanced CPP; GIS
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Follow the underlined links below to learn more about each topic.
 
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New TaxTips.ca Content as it Happens

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Important Dates

NetFile is available until January 24, 2020, for filing 2015 to 2018 personal tax returns. EFile is available for the same period, for filing 2015 to 2018 personal tax returns.

Canadian Financial & Income Tax Calculators

We have lots of calculators - re income tax, borrowing, investing, RRIF withdrawals, US estate tax for Canadians, CPP retirement pension calculator and more.

Personal Tax

Life in the Tax Lane August 2019

The August Life in the Tax Lane will be available by August 6th.  At that time we'll send another email to let you know it's been published.  It will also be available via our What's New page, Facebook and Twitter.

Child Care Costs

Make sure you keep the receipts for day camps and other summer activities for your children that could qualify as childcare expenses.  Childcare costs are entered on a separate line in the Detailed Canadian Income Tax Calculator but are not checked to see if limits are exceeded.

Temporary or Part-Time Job - Perhaps No Tax Deductions

If you are working part-time or in a temporary job and know that your total income will be less than your total personal tax credits on the TD1 form, check the box on page 2 of the form and your employer will not deduct income tax.  Under 18 - no CPP deductions. Almost always - EI deductions.

Employee Stock Option Taxation - Proposed Changes

On June 17, the government released proposed legislation to limit the tax benefits of employee stock options.  Interested parties are invited to submit comments by September 16, 2019.

Alberta Dividend Tax Credit for Non-Eligible Dividends

Alberta passed legislation in June that changed the dividend tax credit rate for non-eligible dividends to 2.18% for 2019 and subsequent years.

Enhanced Canada Pension Plan Contributions and the Tax Return

We've been contacted several times by people who either aren't aware of the enhanced CPP, or who aren't familiar with how the contributions are being treated on the tax return, and think that our Detailed Canadian Income Tax Calculator is incorrect.  Although for 2019 the total CPP rate is 5.1%, only 4.95% is used for the non-refundable tax credit.  The remaining 0.15% is allowed as a deduction from income.

Seniors
Guaranteed Income Supplement (GIS)

GIS is available to low-income Old Age Security (OAS) recipients.  It is usually based on the prior year income, but if an OAS pensioner has a reduction in income, Service Canada may base GIS on estimated current-year earnings.  If you and your spouse are separated for reasons beyond your control, payments may be adjusted.

Financial & Estate Planning / Registered Plans / Investing

2018 and 2019 Tax Comparisons Dividends vs Interest

See the taxes paid at varying levels of eligible and non-eligible dividends and interest for all provinces and territories.  The lowest-tax provinces for higher levels of eligible dividends in 2019 are Alberta and BC.

2018 and 2019 Seniors Tax Comparisons Dividends vs Interest

We compare taxes paid in each province/territory by a senior with eligible dividends vs other income (foreign dividends, interest, etc.) - see how the taxes (including OAS clawback) are significantly lower with eligible dividends.

RRSP vs Mortgage Calculator

The RRSP vs Mortgage (or other loans) calculator, which has been updated for 2019 tax changes, helps you to decide whether to increase your monthly loan payment or contribute the extra monthly amount to an RRSP.  When in doubt, pay down your debt!

Business / Employees

Information For Business Owners

See our Business page for articles for self-employed people and incorporated businesses - taxes, expenses, employees, payroll, keeping records, whether to incorporate and many other topics.

Legislation / Budgets

Upcoming Provincial Budgets

The new Alberta government plans to table their 2019 budget in the fall.  However, they passed legislation in June to revise the corporate income tax rate and non-eligible dividend tax credit rate.

Alberta Corporate Income Tax Rate

Alberta passed legislation in June to reduce the general corporate income tax rate to 11% effective July 1, 2019, with subsequent reductions each January 1st until the rate is 8% for 2022.

Alberta Dividend Tax Credit for Non-Eligible Dividends

Alberta passed legislation in June that changed the dividend tax credit rate for non-eligible dividends to 2.18% for 2019 and subsequent years.

If you need tax or financial help, check our Directory for links to Accounting, Bookkeeping and Financial Planning organizations in Canada.  Canadian income tax is getting more complicated every year, and getting your tax return prepared or reviewed by a professional may save you money!

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