Budget Highlights as it Relates to Tax and Investments, I have decided to provide a short summary of the Federal Budget and how it may relate to you and your investments.
First thing I want to address is the anticipated increase in the TFSA. The limit has increased to $10,000 effective for 2015. This is great news. The maximum you can now contribute to your TFSA is $41,000. In the future all other increases to the TFSA will have to be legislated. The plan can no longer increase with inflation automatically.
If you have children, the Children’s Fitness Tax Credit has doubled to $1,000. For those of you retired or nearing retirement and were not happy about the having to withdraw so much of your RRIF annually, you are now going to get a break. Your RRIF limits have been lowered. Where at 71 you were required to redeem 7.38%, now the minimum is 5.28%. You can always take more so that hasn’t changed.
For seniors and others who qualify for the Disability Tax Credit there is a new Home Accessibility Tax Credit. This is a 15% non-refundable tax credit that applies to renovations done to your home such as putting in wheelchair ramps, walk-in bathtubs, etc. The maximum you can claim is $10,000 in renovations to give you $1,500 in tax savings. Unfortunately this is not retroactive so it would only be for new renovations.
The budget proposes to reduce the small business tax to 9% over the next four years. This applies to the first $500,000 of business income.
And lastly there will be a change in reporting specified foreign income. If you have foreign assets between $100,000 and $250,000, form T1135 will streamline the process for reporting these assets. No changes for foreign assets over $250,000.
I realize there is so much more to the budget than what I outlined, but these are just some of the things that may have a direct impact to you or someone in the family that is immediate.
Please book an appointment if you wish to discuss further or how the budget will affect you personally with your investment plans.