Last week, we looked at the Business Income Tax Measures proposed in Budget 2018. This week, we’ll focus on the Personal Income Tax Measures starting with the proposals on the Working Income Tax Benefit and the Medical Expense Tax Credit. Enhancement of the Canada Workers Benefit: The Working Income Tax Benefit is a refundable tax credit that supplements the earnings of low-income workers. Budget 2018 proposes to rename the program to the Canada Workers Benefit. Also, Budget 2018 proposes that for 2019, the amount of the benefit be equal to 26% of each dollar of earned income in excess of $3,000...
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On this blog, we will focus on Budget 2018’s proposal with regards to the Refundable Dividend Tax on Hand or RDTOH. Refundable Dividend Tax on Hand or RDTOH: Budget 2018 proposes that a refund of RDTOH be available only in cases where a private corporation pays non-eligible dividends. An exception will be provided in respect of RDTOH that arises from eligible portfolio dividends received by a corporation, in which case the corporation will still be able to obtain a refund of that RDTOH upon payment of eligible dividends. With regards to RDTOH Recapture – Connected Corporations: Currently, if a corporation obtains...
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On February 27, 2018, the Federal Government announced details of Budget 2018. Here are the Business Income Tax Measures proposed in this Budget, starting with the business limit reduction on passive investment income. Small Business Deduction - Business Limit Reduction on Passive Investment Income: Canadian controlled private corporations or CCPCs can avail of the lower tax rate on the first $500,000 (which is the federal business limit) of active business income. When retained earnings taxed at the small business rate are used to invest passively rather than in the active business, significant tax deferral advantages can be realized. Budget 2018 proposes...
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As promised, here are 3 more options you might want to consider for your RRSP: Your RRSP may now be an amended plan: If your RRSP was changed in 2017 and it no longer satisfies the rules under which it was registered, it is no longer considered an RRSP but an amended plan or fund. As such, the CRA will consider you to have received in 2017 an amount that equals the fair market value of all the property the plan held at the time it ceased being an RRSP. You may have other income and deductions from an RRSP: You...
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