Knowledge Bureau Poll: Tax Cut Doesn’t Cut It!
The Notice of Ways and Means Motion was released on May 27, but the 1% tax rate cut going into effect on July 1, didn’t cut it with Knowledge Bureau Report readers who responded to our May Poll. A decisive 90% of respondents said “No” when asked: does the new government’s promise to cut the lowest personal income tax rate by 1% to 14%, (14.5% in 2025) go far enough to help Canadians impacted by high costs? Here were their comments and suggested alternatives based on real life experiences with the after-tax income their struggling clients are left with:Maximum CPP Premiums for Self-Employed Close to $5000
The CRA has announced the maximum CPP pensionable earnings for 2015: $53,600 up from $52,500 in 2014.
What you’ve said about capital costs for passenger vehicles
92% voted a resounding YES to increasing the maximum limit on capital cost for passenger vehicles in Class 10.1 above $30,000 plus taxes.
Child Care Expense Deduction
Parents who claim babysitting expenses will be happy with the new enhancements to the child care expense deduction on line 214.
Effective 2015 and subsequent taxation years, the maximum dollar amounts that may be claimed for each child will increase by $1,000. For children under the age of 7, the maximum claim will increase from $7,000 to $8,000, for children aged 7 to 16 (and for infirm dependent children over the age of 16) the maximum claim will increase from $4,000 to $5,000, and for children who are eligible for the Disability Tax Credit the maximum claim will increase from $10,000 to $11,000.
Child Care Expenses can be deducted from the income of the lower-income spouse when the expenses are incurred to earn employment or business income, perform research or pursue an education. The maximum amount that can be claimed each year is limited to the least of:
the total amount spent on child care expenses;
two thirds of the lower-income taxpayer’s earned income; and
the total of the maximum dollar limits allowed for all* children as mentioned above.
The amounts are claimed on Form T778 and receipts are required to back up the claim.
*Note that the third limit is applied to all children in the family, not just those for whom child care expenses are claimed.
Knowledge Bureau Designate Highlight
Grow your business as a Master Financial Advisor.
New Family Tax Cut: What’s the Link to Owner-Manager Compensation Planning
Year end tax planning for corporate-owner managers includes decision-making around the most tax efficient income streams - salary, dividends or bonus - for each shareholder in the family.
Global Wealth Rising at the Fastest Rate Ever Recorded
The Research Department at Credit Suisse has released its Global Wealth Report 2014, which measures trends in wealth across the world. Its key findings are that although economic recovery overall remains challenging, total global wealth has grown to a new record between mid-2013 and mid-2014, increasing to more than twice the USD level recorded in the year 2000.
