The following are a few key changes to your personal income taxes.
-Elimination of Spousal Income Splitting
Income splitting allowed tax payers to split up to $50,000.00 of their income with their spouse saving them up to $2000.00 in income taxes. This is no longer allowed.
Note: This does not effect Pension Splitting
-Tax Rate Changes (Federal Rate)
Incomes between $45,282 and $90,563 drops from 22% to 20.5%
Incomes above $200,000 increases from 29% to 33%
Note : These rates do not include the provincial tax rates so your effective tax rate is higher
-Increased Child Tax Benefit
The existing Canada Child Tax Benefit and Universal Child Care Benefit will be replaced by a new Canada Child Benefit (CCB). The CCB will provide up to $6,400 per child (Under age 6) and $5400 per child (Age 6 to 17). Benefits will be reduced for adjusted family income above $30,000. It will also be reduced depending on number of children in the family.
-Tax Free Savings Account Limit
The TFSA annual limit will be reduced from $10,000 to $5500 for 2016 (Total limit = $46,500)
-Children’s Fitness and Arts credit
These credits will be reduced in 2016 as follows and eliminated in 2017.
Children’s fitness = $1000 –> $500
Arts Amount = $500 –> $250
Contact us for further information about these changes.