We’re coming up on year end again, and once again we have some changes for Canadian individuals and small businesses for the 2019 tax year.
Some highlights from GreedyRates.ca:
- The Working Income Tax Benefit is being renamed the Canada Workers Benefit and increased from $1059 for a single person to $1355, and from $1922 to $2335 for families.
- The medical expense tax credit is being expanded to include service animals.
- The Voluntary Disclosure Program (VDP) is being changed so that if you come forward with errors from past tax years, you may be able to pay the taxes and penalties owing without facing further prosecution.
- Increases to the Tax-Free Savings Account (TFSA) from a limit of $5500 to $6000.
- Small business corporate tax rate reduced from 10% to 9% as of January 1, 2019.
- Increases to the Capital Cost Allowance (CCA) that small business owners can claim. “CRA lets you gradually deduct the expense of these major purchases over time. If you purchase any of these items on or after November 21, 2018, but before 2024, you’ll be able to claim more and get a bigger tax break. The “Accelerated Investment Incentive” lets you claim 150% of the normal CCA rate in the year of purchase (previously, you could only claim 50%).”
- Changes to the rules around income splitting and dividend pay-out taxation for family members of business owners.
Here's a video from The National summarizing some of the key changes:
And for further detail, have a look at the tax changes on the Revenue Canada website.
Complex Changes – Talk to a Professional!
Some of the changes for businesses are complex; talking to your accountant would be advisable to take advantage of things like the changes in the Capital Cost Allowance for large purchases like vehicles and office furniture. The changes to income splitting and dividend taxation are also fairly complicated and should be worked out with your accountant. Shaw & Associates would love to sit down with you and make sure all your bases are covered for the upcoming tax season.
Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.