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Tax Changes in 2016, part 2in Tax Advice Information and Updates
1. Tax Free savings account – The amount you can contribute to your TFSA every year has been lowered to $5,500.
2. Dividend tax credit – The rate that applies to other eligible dividends has changed for 2016 and later tax years.
3. Investment tax credit – Eligibility for the mineral exploration tax credit has been extended for flow-through share agreements entered into before April 2017.
4. Labour-sponsored funds tax credit – The tax credit for the purchase of shares of provincially or territorially registered labour-sponsored venture capital corporations is back to 15% for 2016 and later years. The tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations has been reduced to 5% and will eventually be eliminated for 2017 and later tax years.
Here are other tax changes you may need to remember for this coming tax season:
1. Tax on taxable income – The tax rates and income levels have changed. The donations and gifts tax credit calculation has also changed.
2. Split income of child under 18 – The tax rate has increased to 33%.
3. Sale of principal residence – The sale of a principal residence must now be reported.
4. Reassessment period – Under proposed legislation, the CRA may at any time reassess your income tax return if you fail to report a sale or other disposition of real estate for tax years that end after October 2, 2016.
This is just a simple list with brief descriptions of the tax changes that affect tax year 2016 and later years. Please contact KD if you need further assistance with any changes that affect you.