How Tax Law Changes Impact Your Return

Feeling overwhelmed by the recent tax changes announced? Check out a few of the most important changes that may impact your tax return, decoded by the experts at H&R Block.

More money, more taxes. The lower-middle income tax rate went down from 22 to 20.5 per cent, and a new tax bracket of 33 per cent was created for those earning more than $200,000 per year. So if you made more than $216,975 in 2016, you can expect to pay more this year in taxes.

Home sweet home. Did you sell your house last year? Previously, if you sold your home you weren’t required to report the sale on your tax return. However, starting in 2016 you must report the sale if you want to claim the principal residence exemption.

Kids and taxes. As of July 2016, the Canada Child Tax Benefit and The Universal Child Care Benefit were replaced by the new Canada Child Benefit. But don’t worry, the new plan is more generous than before and has higher family income thresholds, meaning bigger monthly payments for most families.

No more income splitting. You can no longer apply for the Family Tax Cut for 2016. This income splitting used to allow parents with children under age 18 to transfer some of the higher earner’s taxable income to the lower earner, saving families up to $2,000 on their taxes.

Teachers deserve credit. If you’re a teacher, you can apply for a new 15 per cent refundable tax credit if you spend up to $1,000 of your own money on school supplies. This means you can get $150 whether you owe any taxes or not, so start buying those new rulers and save your receipts.

Accessible home. If you made your main residence more accessible to seniors or dependents with disabilities, you may be eligible for a new non-refundable tax credit. Taxpayers can claim expenses up to $10,000 as a result of those renovations or alterations.

Speak with a tax expert if you have any questions, or file online with H&R Block’s free online software.

SOURCE: www.newscanada.com