TFSA (Tax-Free Savings Account)
- The 2015 amount is now $10,000.* It is no longer indexed to inflation and will remain at $10,000 as an annual contribution limit in future years
- The additional amount of $4,500 can be contributed to your TFSA as soon as the budget is passed or CRA confirmation is given.
- The new cumulative limit is now $41,000 (from the inception of the TFSA in 2009 to 2015 including the new amounts)
- The annual TFSA contribution limit was $5000 from 2009 to 2012 and $5500 from 2013 to 2014
What this means to you?
We will discuss your personal circumstances with regard to fully funding your TFSA at the new contribution limit upon confirmation from CRA.
RRIF (Registered Retirement Income Fund)
- Changes to RRIF minimum amounts will apply to Canadians age 71-94
- New minimum amounts are on average 2% less than prior to the budget
- This change is effective for the 2015 tax year
- If you have already received a minimum payment for 2015, and wish to receive the lower amount, the difference can be re-contributed back to your RRIF. However, the mechanism for this transaction is still unclear. When CRA has cleared up the administrative confusion we will update you accordingly.
What this means to you?
If you are currently receiving the minimum amount we will discuss how the changes will affect your personal situation, income requirements and the taxable implications.
RDSP (Registered Disability Savings Plan)
- The 2015 budget has extended the time frame of the temporary measure introduced in the 2012 Budget which permits certain family members to be named as the RDSP plan holder.
What this means for you?
If you are interested in more information on RDSPs please call our office to have a personal discussion.
- Starting in 2016 there will be a new 15% tax credit to assist seniors and persons with disabilities with home renovations (up to $10,000/year) This will not affect the existing Medical Expense Tax credits, both federally and provincially.
- Charitable donation changes are proposed after 2016 to extend the Charitable donation benefits to include appreciated private company shares and real estate selling holding and donating proceeds within 30 days. This will be a mechanism to save tax on capital gains, as there will be no tax on the capital gains if donated.
- T1135 – Foreign Income Verification statement; This form is filled out for foreign property holdings over $100,000. The Budget is simplifying this form for 2015. There will be a simplified form for cost amounts between 100,000-250,000. The existing more complex form will be continued to be utilized for cost amounts over 250,000. (Personal use property, registered accounts and mutual funds are exempt from this reporting.)
- Small Businesses – The current tax rate of 11% for CCPC (Canadian Controlled private corporations) will be reduced to 9%. The effective rate on non-eligible dividends will increase steadily. Small Business clients should be discussing with their accountants if it would be beneficial to accelerate dividend payments in 2015 and years after to avoid the higher taxation of the non-eligible dividends.
- Farmers and Fishers: Increase to the Life time Capital Gains Exemption – Limit for disposition on qualified farm or fishing property as of April 21, 2015 has increased to $1 million.
- EI contribution rate – EI employee rate will drop by 21%, from $1.88 to $1.49 per $100.00. This will benefit both employees and employers.
- Quarterly Remitting for New Employers. If you currently are a new employer and remit CPP and EI contributions on behalf of your employee you can now remit quarterly instead of the current monthly remittance. This is to eliminate the administrative burden. This will apply to employers that remit less than $1,000 per month (with the employee earning up to $43,500 per year)
How this might apply to you?
If you employ a care-giver (elderly or nanny) this will minimize the 12 months of remittance to only four. This is a welcome change!