Filing Your Taxes in the 11th Hour? Make the Most of the 2016 Tax Year
Here we are, down to the wire again on another tax filing season. Many Canadians loathe this time of year–which is probably why they end up putting it off until the absolute last minute–but as I said last time the end of April rolled around, it’s actually a pretty great thing; it allows you to get something back for a year of working hard and buckling down, but you need to be sure you file on time in order to maximize the benefit and not incur penalties. With Sunday’s deadline looming, here are a couple of changes to be aware of–and a few tips–before you file:
New for Savers: Be aware that the annual limit for contributing to your Tax Free Savings Account was rolled back to $5,500 in 2016 (from $10,000 in 2015). But TFSA contribution limits are cumulative, so the maximum unused TFSA contribution room as at December 31, 2016 is $46,500. An additional $5,500 can be contributed in 2017.
New for Teachers: There is a new refundable tax credit for eligible teachers and early childhood educators. For teachers and educators paying expenses out of their own pockets, it allows them to claim up to $1,000 of teaching supplies like construction paper, art materials, pens, pencils, books, games, containers, materials for science experiments, etc. The credit is worth up to $150.
New Tax credits for kids: Has the cost of ice time or that new pair of goalie pads drained your bank account? Good news! You can claim as much as $500 per child under the Children’s Fitness Tax Credit, an incentive from our government to help keep Canadian kids active and fit. Additionally, if your child attends programs that contribute to his or her development–such as private tutoring or language classes–you may also be able to claim up to $250 in eligible fees. And of course, don’t forget about the Canada Child Benefit, introduced in July of last year.
Claim your transit pass: This could be your last opportunity to receive a tax credit if you use a monthly transit pass. There is a proposal in the 2017 Federal Budget to eliminate the credit, effective July 1, 2017. You can find more information on applying here.
When in doubt, seek professional help: The CRA has always taken the position that ignorance of Canadian tax law is no excuse for mis-filing your information. If you’re having any difficulty whatsoever figuring out what goes where in your tax forms, you’d be well-served by consulting an accountant or tax advisor before you click that Big Red Button. Trust me, it could save you big headaches down the line.
So get busy with the filing already! Hopefully–due to some wise decisions and investments in 2016–you’ll be looking at a bit of a windfall this year. And may the 2017 tax seasons bring you even more success.
Until next time,
Start Early. Save Often. Stay Invested. ™