What the Tax Changes Mean for Canadian Families

family taxes

As you are getting ready to do your taxes this year,  you may be wondering what the changes made just before Christmas will mean for you. (At least I am hoping you know that there are several changes that will affect Canadian families.)

I am hoping that you already know about the Family Tax Cut, the elimination of the end of year child tax credit amount, the enhancements of the Universal Child Care Benefit (UCCB) benefits, the increase in the children’s fitness tax credit, and how the child care expenses deduction has increased; but if not, here’s a little primer for you.

The Family Tax Cut

This is a limited form of income splitting.  It is a federal tax credit that allows a high income earning spouse to transfer up to $50,000 of taxable income to spouse in a lower tax bracket. This gives these families some tax relief up to a maximum of $2,000. This is not a universal credit, you do have to have a child under 18 to take advantage of this program, and you cannot be separated or be confined to a prison or similar institution. You must also both file your taxes and neither spouse can be bankrupt.

The Elimination of the End of Year Child Tax Credit Amount

As of the end of the 2015 tax year, the amount for children under the age of 18 that you get simply for having minor children will be eliminated. Even with the child amount gone, most families will still see more money thanks to the enhanced UCCB benefits.

Enhanced UCCB Benefits

Effective January 1st, 2015, the Universal Child Care Benefit increased from $100 to $160 per month for kids under the age of 6 and there is now a new benefit of $60 per month for kids age 6 to 17. You may be wondering why you haven’t seen any cheques yet? There haven’t been any cheques so far.  You will receive a retroactive payment in July, even though the enhancements have been in place since January.

Increase in Children’s Fitness Tax Credit

The government has doubled the children’s fitness tax credit for the 2014 tax year from $500 per child to $1000 per child. For the 2015 tax year and beyond, this will become a refundable tax credit.

Child Care  Deduction Increased

Effective as of 2015 the maximum dollar amount that you can claim for your child care expenses  have increased by $1,000. So that means if you have a child under 7 the new maximum deduction is now $8,000. If you have a child 7-16( or infirm child over 16) the maximum deduction. is now $5,000. The limit for disabled children is now $11,000.

 

Now if you are doing your own taxes with TurboTax they will help you through the changes. After all, the software walks you through everything asking you key questions along the way. So you really don’t need to worry about being up to date on knowing every single change as they have taken care of that for you. Another key feature of TurboTax is that if you need assistance, you can ask a question and get it answered in real time. They even double check everything so you can feel comfortable filing your return. While none of this will make taxes fun, hopefully using TurboTax and getting some more money back with the changes to the tax system will make it a little less painful.

 

Join Us for the #CDNmoney Twitter Chat with TurboTax and Robin Taub

It’s that time of the year and everyone should of received all their tax forms by now and many people are thinking of filing their tax returns. There are so many things to remember including where you put all your receipts.

Now before you file, join @ChristaClips, and I as we welcome @robintaub, Turbotax Canada, tax expert to our next #cdnmoney chat. It will be a great conversation about tax time and the recent changes that we may have questions about. We will also be talking about filing as a small biz owner and well I know many of my readers own their own small businesses, work from home or freelance.

Here are some tips that I feel are important when it comes to tax time:

1. If you have a simple tax return you can use TurboTax Canada’s free service.

2. Remember to think about those major life events that can effect your return. Marriage, birth, moving are just some to remember.

3. There are  new tax benefits for the 2014 year. The one that will that will impact families is the Family Tax Cut.

4. If you are self employed or own a small business you can use the Home& Business Edition of TurboTax

Doing my own taxes makes me feel empowered and in control and as someone who works for herself that is so important. No accountant visits for this mom. One of the things I love most about TurboTax are the prompts. You actually get prompted as you move through your tax return, sweet right? Now there are several more reasons that I am loving TurboTax this tax season but we can chat about them at the #cdnmoney money chat on Tuesday, March 24th at 7pm.

You may want to also read the posts I have already written about TurboTax this year. The first on how to get organized for tax time and the second my review of the software.

#CdnMoney Twitter Chat with TurboTax

 

Please do join us for next week’s #cdnmoney chat it will be a great conversation about all the things we need to remember when it comes to tax time. By the way TurboTax are bringing 5 prizes for Canadian tweeters, so you may walk away a winner as well.

Rules to be eligible to win :

* Tweet on March 24th between 7-8pm using the hashtag #cdnmoney

* Answer the prize question with a correct answer.

* Be a Canadian tax filer.

Hope to see you all next Tuesday night, March 24th from 7-8pm EST.