New in 2020 – The basic exemption amount will vary depending on your income level. For individuals whose net income is greater than or equal to the amount at which the 33% tax bracket begins, your basic exemption is $12,298. For individuals whose net income is less than or equal to the amount at which the 29% tax bracket begins, your basic exemption is $13,229. If your spouse earned no income, additional tax credits are available within the same criteria.
You can contribute the following amounts without paying any taxes:
Annual TFSA limit for 2019 – $6,000
Annual TFSA limit for 2016-2018 – $5,500
Annual TFSA limit for 2015 – $10,000
Annual TFSA limit for 2013 & 2014 – $5,500
Annual TFSA limit prior to 2012 – $5,000
You can contribute up to 18% of your prior year’s earned income, or up to the amount in your RRSP contribution room. RRSP Contributions for the current year must be made by the last business day of February, of the following year.
Registered Education Savings Plans are an excellent way to save for your child’s education. The government of Canada will match your contributions with the Canada Education Savings Grant (CESG) equal to 20% of your total annual contribution of $2,500. That means the CESG can add a max of $500 to an RESP each year. The lifetime maximum amount of CESG a child can get is $7,200 of tax- free money.
Your contributions are not deductible, but any income earned within the plan accumulates tax-free. Your child will receive this accumulated income once he/she attends college or university, at which time their income is usually fairly low and so the tuition credits will usually offset any income tax that is due.
Child care expenses are considered any amounts paid to individuals (nannies), daycare services, camps, and programs offered at educational institutions. Receipts must be obtained and expenses are deductible by the lower income spouse. Up to a maximum of $8,000 is deductible for children up to the age of 6 and $5,000 for children 7-16. If your child earns more than the basic amount, you cannot claim child care expenses for that child.
Individuals that claim self-employment income are entitled to claim a wide range of expenses. Basically, any costs incurred to earn income are deductible.
When you are required to incur your own expenses in order to earn income (ie: Vehicle Expenses) you are allowed to deduct employment expenses to the extent you have earned commission. Common expenses that can be deducted by commissioned salespeople include:
Meals and entertainment – limited to 50% deduction. You must be away from your municipality for at least 12 hours in order to claim meals while traveling.
A portion of your home expenses (ie: Home Office) may be claimed as long as this is the place where you principally perform your employment duties; or it is a place exclusively used on a regular and continuous basis for meeting clients/customers in connection to performing your employment duties. This includes items such as maintenance, utilities, insurance and property taxes may be claimed.
Make sure your employer issues you form T2200! This slip states that you were required to incur your own expenses to generate income. Without this slip, these expenses can be denied by CRA.
You and your spouse/common-law partner may be eligible to benefit from pension income splitting. Up to half of pension income can be transferred to the lower-earning spouse or common-law partner to help minimize income tax amounts.
Generally, you can claim moving expenses you paid in the year if both of the following apply:
You moved to work or to run a business, or you moved to study courses as a full-time student enrolled in a post-secondary program at a university, a college, or another educational institution
You moved at least 40 kilometres closer to your new work or school
The Canada child benefit (CCB) is a non‑taxable amount paid monthly to help eligible families with the cost of raising children under 18 years of age. The CCB may include an additional amount if eligible for the child disability benefit.
In 2020, the maximum amount payable for children under age 6 is $6,765 and $5,708 for children aged 6 to 17. These amounts start to be reduced once your family income is above $31,171.
In 2019, maximum amounts were $6,639 and $5,602 respectively; Reductions starting at $31,120 in family income.
2018 maximum amounts were $6,496 and $5,481 respectively; Reductions starting at $30,450 in family income.
2017 maximum amounts were $6,400 and $5,400 respectively; Reductions starting at $30,000 in family income.
Many people are eligible for this benefit, especially seniors and parents of a child with a disability, yet most are completely unaware and/or have never applied. Applications can be retro-active and if they are approved, could mean a substantial refund for applicant. (Form T2201 must be signed by a medical practitioner to apply)
The disability tax credit provides tax relief to individuals with a disability, or their caregivers. An individual may claim the disability amount after CRA approves their application. The purpose of the DTC is to improve tax equity by allowing relief for disability costs, since these are unavoidable and additional expenses that other taxpayers do not have to face.
Are you eligible for the DTC?
Application Form T2201
It is still very important to file tax returns for students. Even if they make very little money, these tuition tax credits must be tracked with CRA in order to be used against future income. Tuition tax credits are available to all post-secondary students attending a qualifying post-secondary institute. Students can transfer up to $5,000 per year of these credits to a parent or spouse.
In order to deduct these credits, the student will require a form called a T2202A or a TL11A for foreign universities. This special slip can be downloaded from the student’s online account on the school’s website.
NEW for 2020 – T2202A forms will be available on the CRA website through your MY CRA account.
All scholarships, fellowships and bursaries received in connection with the enrollment in a program eligible for the education credit will be exempt from taxation.
Graduates who live in Saskatchewan and who file a Saskatchewan income tax return can apply for the Graduate Retention Program and may be eligible for a tax credit of up to $20,000 of tuition fees paid.