Tax time is just around the corner, and while taxes are something that everyone must do, the benefits and changes to the BC income tax laws are not something that everyone understands. For those of you who may not be up-to-date, here are 10 must-know tax tips for BC families, shared with us by the tax experts at H&R Block.
Having a baby?
1) The majority of Canadian parents are eligible to apply for the Canada Child Benefit (CCB), a tax-free monthly payment to assist with the cost of raising children. Here’s more on what you can expect from the CCB:
- The new CCB will provide a maximum annual benefit of up to $6,400 per child under the age of 6 and up to $5,400 per child between 6-17 years of age.
- Families with less than $30,000 in net income will receive the maximum benefit.
- Families will not have to pay taxes on CCB payments.
- Families will receive a single payment every month and families whose children qualify for the Disability Tax Credit can receive an additional amount as part of their CCB, up to a maximum of $2,730 per child.
2) For those of you who are taking time off with your little one(s), you may be eligible for Employment Insurance (EI) benefits, which will need to be claimed as income on your tax return. Read on for some changes to the Parental EI benefits:
- The 2018 federal budget proposed a supplemental “parental sharing benefit” which will provide an additional five weeks of benefits when both parents agree to share parental leave, designed to provide greater flexibility—particularly for mothers—to return to work sooner, if they so choose, knowing their family has the support they need.
3) Canadian parents can also claim childcare expenses including daycare fees.
4) More recently, expenses for assisted reproductive technologies to assist with getting pregnant can now be claimed as a medical expense.
Purchasing a home?
5) If you’re buying a house for the first time, you can take advantage of the First-time Home Buyers’ Tax Credit (FTHB), a $5,000 credit, which works out to $750 in tax savings. You can also tap into your Registered Retirement Savings Plan (RRSP) to help with your down payment, as a part of the Home Buyers’ Plan and borrow up to $25,000 in one year, tax free.
Small business owner?
6) Good news for small business owners: the government recently lowered the small business tax rate to 10 per cent, effective January 1, 2018, and intends to lower it further to 9 per cent, by January 1, 2019.
More Family Tax Tips:
7) The following benefits are no longer available:
- The Children’s Fitness and Arts Tax Credits, and the additional amount for children eligible for the disability tax credit are no longer available for this tax season. In previous years, parents and guardians were eligible to receive credits for such activities as art classes, piano lessons, hockey and soccer.
- For 2018, the Canada Child Benefit will increase 1.5 per cent for July 2018 to 2019 benefits. This means more than $80 annually per child for those who qualify for Canada Child Benefits, and $41 more annually for those who qualify for the Child Disability Benefit.
Before you file, be sure to do your research! There may just be some savings in store for your family.