As tax season approaches, so does the anxiety felt by most tax payers. Everyone wants to be sure they are minimizing the amount of taxes they are paying. Although this stress cant be completely eliminated in most cases, it can be greatly relieved. A sure way to reduce tax related stress is to be prepared, by keeping your books in good order throughout the year, and to keep informed about any changes to tax laws and available deductions. Such deductions for 2007 include:
The Child Tax Credit (CTC) - This new non-refundable tax credit of $2,000 can be claimed for each child under the age of 18.
The Canada Child Tax Benefit (CCTB) - A tax free, monthly payment designed to help families with the cost of raising children. The annual base benefit is $1,283 for each child under 18, there is a supplement of $90 for your third and each additional child. However as your household income increases, your CCTB decreases.
The Childrens Fitness Credit - The maximum credit is $500 to cover registration costs for each child under the age of 16 who joins an eligible program at any time during the year.
In 2007 there were two Federal budgets, and as a result a number of changes to the federal government tax and benefits programs were announced. Some of the highlights of the budgets that tax payers should be aware of prior to this years tax season are:
Pension Income Splitting
Increase to the age limit for RRSP from 69 to 71
New Child Tax Credit (discussed above)
Registered Disability Savings Plan
Investment Tax Credit for Child Care Spaces
Lifetime Capital Gains Exemption increase from 500K to 750K
Working Income Tax Benefit
GST Cut to 5% effective January 1, 2008
Lowest personal income tax rate will be reduced to 15% from 15.5%
Basic Personal Amount increased to $9,600 for 2007 and 2008 and to $10,100 for 2009.
For Quebecers, the 2007 the provincial budget was released with a number of changes to the provincial-government tax and benefit programs administered by Revenue Quebec. These changes include:
Increase to the refundable tax credit for home support services for seniors
Refundable tax credit to support education savings (RESP)
Transfer of the unused portion of the tax credit for tuition fees
Increase in the tax credit for retirement income from $1,000 to $1,500
Many find the process of preparing for, and filing their taxes overwhelming, and for these individuals, the best advice one can give would be to seek the advice of a professional, whose job it is to be aware of the latest changes in tax laws. A certified accountant is trained to know how to best reduce your tax burden, or increase your refund, all while reducing the stress of tax season.
Remo Milone, CRM is a Senior Associate at Milone and Associates and is a Registered Candidate of the CGA Order. For more information on tax filing or to download a simple checklist for personal income taxes, and for other important deadlines, please visit his website at =>www.milone.ca
