Canadians Should Know
A New Year Brings New Changes
With a new year often brings new tax rules and regulations. Here are a few new changes that you may want to know about.
EI Premium Rate Lowered
Thanks to strong employment numbers there's less of a demand for EI (Employment Insurance). EI rates that employees pay are being reduced by four cents per a hundred dollars of insurable earnings, in Quebec the rates are being dropped by five cents. The amount that employers pay are also being reduced.
TFSA Limit Increased
Good news for those with a Tax-Free Savings Account! The annual contribution limit for 2019 has been increased from $5,500 to $6,000. A TFSA is a savings account that allows your money to grow tax-free and unlike a RRSP (Registered Retirement Savings Plan) you don't have to pay income tax when you make a withdrawal.
New Tax Avoidance Program
VDP (Voluntary Disclosure Program) is a program meant to encourage Canadians to come forward if they lied or didn't completely tell the truth on any of their tax filings. A new change to VDP is that if you purposely avoid any of your tax obligations you can now apply for a smaller penalty, before you could apply and if you were accepted you would be liable for any taxes you owe and any interest that may have accumulated.
Do you have a Service Animal?
Service animals are now needed to be claimed as a medical expense but only if the animal was acquired after 2017. The medical expense tax credit has been expanded meaning you are now able to claim expenses such as training for your service animal as well as any expenses to take care of the animal like food.
Working Income Tax Benefit
The Working Income Tax Benefit was created to encourage low-income individuals and families to participate in the workforce, by working they would be able to receive a refundable tax credit. The benefit is now known as the Canada Workers Benefit. Maximum amounts families and individuals are able to receive have been increased from $1,059 to $1,355 for single individuals and from $1,922 to $2,335 for families. The CRA (Canadian Revenue Agency) will automatically add the benefit to your tax return if you are deemed eligible.
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