Income Taxes: Whatís New for 2014 and 2015?
First a couple of reminders for Manitoba Property Tax Rebates. The Seniorís School Tax Rebate (65+, $235) and the Farmland School Tax Rebate must be filed by March 31, 2015.
Before you think you do not qualify for the farmland rebate because you donít farm, have a look at your property tax bill. If you own some acres, you may still have ďfarmlandĒ. I discovered this just a few years ago. We own acres, but we donít farm, so I didnít think much of it. When a client inquired about it I realized that we qualified for the rebate too even though we didnít farm. So if you own some acreage, you might just get some money back!
I recently heard a great spin on a well known quote: ďThere are two certainties in life: Death and Taxes. But at least Death doesnít get worse each year.Ē
On to some changes to our taxes for the 2014 and 2015 tax years. I love all the tax changes Canada Revenue Agency (CRA) makes every year: as long as filing your personal income tax gets more complicated each year, Iíll be in business for quite awhile!
The Childrenís Fitness Credit increased to $1,000 from $500 and will be a refundable credit in 2015. So keep all your receipts for all of your childrenís fitness and artís activities.
UCCB Ė the Universal Child Care Benefit will increase by $60 for all children under 18. So children up to age 6, parents will be eligible for $160/month (was $100) and children 6 to 17 will be $60/month. Itís effective January 1 2015 but will be paid retroactively in July 2015. There will be lots of happy families in July.
Family Income Splitting (Family Tax Cut). This is great for families if one spouse earns a higher income and is in a higher tax bracket than the other; this is a first for 2014. The savings can be up to $2000 per family and Iíve already done a few ďwhat ifsĒ for some clients and the savings can be significant.
TD1 Ė for 2015 the childrenís credit is eliminated. Employees previously claiming the child amount (2,000+) must file new Federal TD1 forms with their employer. If the minor child is mentally or physically infirm, the Family Caregiver Amount (2,000+) can still be claimed.
First Time Super Donorís Credit is not new this year, but keep it in mind if you (or your spouse) have not claimed a donation for 2008 to 2013; you can get extra credits for donations up to $1,000 on your 2014 to 2017 tax years.
Volunteer Search and Rescue. This is new this year; in addition to the Fire Fighterís credit. You cannot claim both, but can combine the hours for both to claim the credit. Do we have a Volunteer Search and Rescue in Southeast Manitoba? Let me know.
Claiming Tips; this is not new, but it seems that CRA is focussing more on the restaurant industry and will be completing more audits. If you work in a job that receives tips, itís up to you to keep track of how much you receive and report it as income on your income tax return. Iím just saying....
No more Safe Deposit Box. CRA has finally realized that we donít keep our bonds and share certificates in there anymore and so no longer allow us to deduct it on our tax returns (can still go back and make changes to 2005-2013 if you didnít claim it and have proof you paid for it).
RRSP deadline March 2; the deadline would normally be March 1, but thatís a Sunday so we get an extra day. Remember if your individual taxable income is under $44,000, you will likely be better off using the TFSA (Tax Free Savings Account) instead of RRSPs to save for your retirement.
TFSA: another $5500 contribution room was created January 2015 Ė now $36,500 is the total contribution room. Itís up to you to keep track to ensure you do not go over; the penalties are quite steep. Remember you can put anything in your TFSA: variable savings, term deposits, mutual funds, shares, bonds, gold, etc.
T1135 Ė foreign property reporting. This is the second year we must report if taxpayers have foreign property costing more than $100,000 during the year. Be sure to advise CRA; the penalties if you donít are severe! More Canadians are buying houses in the US, so be sure to report your foreign assets if the total cost of all assets is $100,000 or more.
The chequeís NOT in the mail; starting April 2016 no more cheques will be issued (income tax refunds, GST credit, Child Tax Benefit, UCCB, CPP, OAS etc). Make sure CRA has your direct deposit information.
GST credit Ė in previous years, we could indicate which spouse would receive the GST. Starting with the 2014 tax year, it is the first spouse assessed by CRA that will receive the GST credit. I will need to ensure spouses know who may get the GST (I may file one before the other, but I cannot control which one CRA assesses first). Iím not sure why CRA decided to change this. I suspect they will get many calls starting July when the wrong spouse is receiving it.
Adjustments can still be made for the 2005-2013 income tax years (no longer can adjust 2004); Manitoba tax credit claims are limited to 2013, 2012, 2011; pension income splitting adjustments for 2011 must be made by Apr 30 2015.
Reminder to opt out of CPP with employer if you are aged 65-70 and receiving CPP and want to stop contributing. Remember itís up to you to complete the form and notify any and all employers during 2015 if you do not want to contribute to CPP. It will be effective the month following you providing your employer the form.
Manage online Mail. We will ask you this year if you want to register for Online Mail; then CRA will no longer mail your notices to you. Instead, you will receive an email notification that there is mail for you to view on the My Account secure online service. (If you authorize me to view your account, I will get an email too; as added protection that no one misses any mail)
Tax Data Delivery allows authorized reps (like me!) to electronically receive tax info that CRA has available Ė T4s, homebuyers plan, tuition carryover etc. So if you are missing a T4 (from EI or employer or other issuer), I may be able to retrieve it for you instead of you waiting for it or for a duplicate to be issued.
Reminder that I will be hosting my second Death Cafe on Friday February 20 10:00am; please RSVP if you would like to attend. The first one in January was very successful and encouraging.
I have arranged for a temporary office in Lorette Wednesdays starting February 18; call for an appointment if thatís a more convenient location for you.
And finally, follow me on my blog: SteAnneTaxServiceBlog.com
Anni Markmann is a tax professional working, living, and volunteering in our community. Contact Annir at 204-422-6631 or firstname.lastname@example.org or 36 Dawson Road in Ste Anne.