halifax income tax preparation


Tax Tips & Changes For The 2016 Tax Year



 

home tax creditsSale of Principle Residence (New for 2016) The sale of your personal residence now must be reported on a Schedule 3 (S3). Failure to do so could result in taxpayers losing their personal residence designation and the resulting tax free exemption of the capital gain.

Home Accessibility Expense (New for 2016) Eligible taxpayers can claim up to a 10,000 federal tax credit for expenses incurred in order to make their home more accessible. These expenses are reported on Schedule 12 (S12) and are available to taxpayers who are eligible for the disability tax credit and/or are at least 65 years of age.

teacher tax creditsEligible Educator School Supply Tax Credit (New for 2016) If you are a teacher or hold a diploma or certificate in early childhood education you may be eligible for up to a 1,000 federal tax refundable tax credit for money spent on supplies. A qualifying 1,000 tax credit would equal a 150 tax saving.

The Children’s Arts Amount: The Children’s Arts amount has been reduced to 250 for children under the age of 16 at the beginning of the year. Please note that there is no Arts Amount provincially in NS. The 2016 tax year is the last year for this credit as it is being eliminated for the 2017 tax year.

child-tax-benefitsChild Benefits: As of July 2016 the Canadian child tax benefit (CCTB) and universal child care benefit (UCCB) have been replaced with Canadian child benefit (CCB) for children under the age of 18. For 2016 the UCCB received is still taxable on the lower income parent’s tax return. Single parents should probably include the amount in the income of their dependant in order to maximize the parent’s return.

Children's Fitness Amount: The Children’s Fitness Amount has been reduced to 500 for children under the age of 16 at the beginning of the year. The amount is a refundable tax credit of up to $75.00 per child (500 x 15%). Please note that there is no Fitness Amount provincially in NS. The 2016 tax year is the last year for this credit as it is being eliminated for the 2017 tax year.

Amount For Young Children: Taxpayers with children under the age of 6 can claim a NS non-refundable provincial tax credit of 100. per month for each child. This must be claimed on the lower income spouse.

Child Care Expenses: Maximum Child Care Expenses are 8,000 for children under 7 years of age and 5,000 for children aged 7 to 16.

The Family Tax Cut This has been eliminated for the 2016 tax year.

savingsFirst-Time Home Buyers should be sure to claim the 5,000 non-refundable tax credit and save 750. on their taxes. This applies to houses, mobile homes and condos.

Transit Credit : Taxpayers including their children who use Public Transit can claim the monthly cost of the passes. The 2016 tax year is the last year for this credit as it is being eliminated for the 2017 tax year. This is a 15% non-refundable tax credit.

Students should always report their tuition on a S11 and NS(S11) in NS and can transfer up to 5,000 to a spouse, parent or grandparent. Students should also be sure to claim any interest paid on student loans.

Pensioners should be sure to look at splitting their pension income with their spouse by completing a T1032. This has been one of the biggest tax savings changes made in decades! For Nova Scotians aged 65 and over be sure to be aware of the up to a 1,000. reduction in provincial tax if they can get their income to 23,999.99 or less.

Donations can be carried forward for up to 5 years and would normally be combined for spouses in order to maximise total returns.

money bags taxmanOther Changes:
- The Basic Personal Amount has been increased to $11,474
- The Age Amount for taxpayers 65 years of age and older has been increased to $7,125 with the income threshold above which the amount is reduced increasing to $35,927 at a rate of 15%.
- The Disability amount has been increased to $8,001
- The EI claw-back threshold has been increased to apply to income over $63,500
- The OAS claw-back threshold has been increased to apply to income over $73,756
- The maximum Refundable Medical Expense Supplement has been increase to $1,187 and may be triggered by taxpayers who have relatively high medical expenses in relation to their income. Please note that medical expenses for both spouses would normally be claimed by the lower income spouse in order to maximize total returns.
- The Working Income Tax Benefit (WITB) has been increased to up to $1,028 for single taxpayers and $1,868 for couples. This is a refundable benefit aimed at lower income individuals and families.



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