Prime Minister Stephen Harper and Finance Minister Joe Oliver recently announced a “Family Tax Cut” credit which allows certain Canadian families to reduce their overall federal income tax. This relief will be available starting in 2014.
The new measure would allow a higher income spouse to shift a portion of their income to a lower income spouse in order to take advantage of their spouse’s lower marginal tax rate and non-refundable tax credits. This will be of benefit to those families where one spouse is earning the majority of the income.
In order to prevent certain individuals from getting a disproportionate benefit, the maximum amount of income which can be split is limited to $50,000 annually. The tax benefit which can be achieved will be limited to $2,000 per year in the form of a non-refundable federal tax credit.
This income splitting measure applies only to the federal portion of tax but hopefully the provincial governments will follow suit and introduce a similar measure.
This new provision will not impact the pension income splitting currently available to seniors. However, the two income splitting measures cannot be claimed at the same time.
Thanks to Richard Ouellette of KWB Chartered Accountants for providing this content.
Other Posts by Richard
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KWB Client Focus Group Meeting
On June 7th, KWB invited six of its clients to participate in a client focus group with the goal of discovering opportunities to better serve its customers. We learned a lot, and we want to share with you not only what we learned but also what we plan to do with it – to ensure that KWB is your accounting firm of choice today and in the future. For some of the details of what we learned and what we plan to do about it, read on.
Do you own a business - either incorporated or unincorporated - and have a spouse or one or more adult children with an income lower than your own? If so, you may be able to shift your income to these other family members, effectively moving the income from a high tax rate to a low tax rate and decreasing the overall tax burden on your family. This is called income splitting.
KWB Seminar Topics
Vote on Future KWB Seminars
2.Health & wellness
3.Hiring foreign workers
4.Client think tank (Improving customer experience)
5.Customer service ideas
6.Acting as an executor or agent
8.Finance for children, teens
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Retirement Planning Alternatives
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Child Related Benefits, Expenses and Deductions
There’s great news for 2015 for Canadians with children. Stephen Harper has announced a “child care benefit boost” – which includes an increase to, or return of, the monthly Universal Child Care Benefit cheques and an increase to the amount taxpayers can deduct for child care expenses and the child fitness credit.
Change in use of property from capital to inventory or vice versa.
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There is no provision in the Income Tax Act which describes the circumstances in which gains from the sale of real estate are to be determined as being either
Corporate expenses - What can you deduct?
Often deductible business expenses are overlooked or missed as business owners are unsure whether they are deductible.
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Alberta Corporate Tax Rate Changes
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Deciding when it’s time to start taking your CPP retirement benefits
You can start receiving CPP pension benefits when you reach age 65 (the month after your 65th birthday) which will entitle you to a full CPP benefit depending on how much and how long you have contributed to the CPP.
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CRA Letter Campaign
Every year CRA conducts reviews and audits to sample and educate tax payers on tax compliance, and 2016 will be no different.
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Top 7 Overlooked Tax Deductions
Are you paying too much in taxes? Are you getting all the tax deductions available for your business?
An effective way to minimize your company’s tax expense, in addition to good planning, is to ensure the company is claiming all of the expenses legitimately allowed under the tax act. Take a look and see if any
Tax News and Changes – COVID-19
The Prime Minister and the Minister of Finance announced on
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economic impacts of the COVID-19 pandemic. Part of the economic relief package includes
tax relief for individuals and businesses.
Filing Deadline Extensions
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Resources for Canadian Businesses – COVID-19
Small and medium-sized businesses are the backbone of the
Canadian economy. During this extraordinary time, the Government of Canada is
taking strong action to help Canadian businesses as COVID-19 is affecting them,
their employees and their families.
The Government and public health officials are urging all
stay home unless it is absolutely
Support for Employers - Alberta - COVID-19
The Alberta government will provide immediate funding and supportive measures to support local businesses, employers and employees.
Support for employers
Corporate income tax changes
Corporate income tax balances and
instalment payments will be deferred from March 19 until August 31, 2020 to
increase employers’ access to cash so they can pay employees, address debts
Support for Albertans – COVID-19
government will provide immediate financial relief to Alberta’s families and
should be focused on their health and not worry about whether they can pay
their bills so we have put a number of options in place for those struggling
Emergency isolation support
This will be
a temporary program
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1. What is the Temporary Wage Subsidy
Temporary Wage Subsidy for Employers is a three-month measure that will allow
eligible employers to reduce the amount of payroll deductions required to be
remitted to the Canada Revenue Agency (CRA).
2. Which employers are eligible?
You are an
eligible employer if you:
Who qualifies for EI?
Whether you qualify for EI will still depend on your specific situation, such as regional rate of employment, and the number of hours worked in the last 52 weeks.
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New Information from the Alberta Government – 25 March 2020
In addition, it is now mandatory for travellers returning
from outside of Canada to self-isolate. This legal requirement also applies to
close contacts of confirmed COVID-19 cases, as well as to any individual with
symptoms, such as a fever, cough, sore throat or runny nose.
“We must do everything we can to protect Albertans
Document Deliveries and Meetings through COVID-19
Dear valued KWB clients and business partners,
Our office remains open and functional during this time, however, we no longer have reception coverage until further notice. Please take note of the following procedures that have been implemented:
1. Deliveries to our office
You may continue to deliver or drop-off your documents at our
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Ottawa hikes wage subsidy to 75% for small and medium-sized businesses
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On March 13,
2020, the Government announced the establishment of a Business Credit
Availability Program (BCAP) to help Canadian businesses obtain financing during
the current period of significant uncertainty. The BCAP will support
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businesses and services on the essential services list can continue to provide
services at locations accessible to the public and must have proper risk
mitigation measures in place, such as sanitation stations and appropriate
distancing between customers.
of this list is to provide general guidance to business owners and
KWB Summary of Relief Programs - Federal and Provincial - 3 April 2020
To our friends, clients, and business partners,
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