Between the Federal Government’s recent announcements, not to mention its election promises last fall, and the BC Provincial Government’s budget, enough confusion has been created this tax season to spin the head.
Here’s a simplified version of how it breaks out.
For the preparation of current 2015 personal taxes, the changes include:
The “Amount For Children Under 18 Tax Credit” has been cancelled, the government stating that this revenue stream will go toward the revamped child tax benefit now being paid in 2016.
The “Children’s Fitness Tax Credit” is now a refundable credit which means that if you have some of the credit left over after reducing your tax liability to zero, the government will pay you the difference.
By the way, this federal tax credit disappears for tax prep next year.
The BC Government has introduced a “$500 Fitness Equipment Tax Credit” that tops up the federal fitness credit. In reality, this is worth an extra $25. This credit is automatically triggered if a fitness credit is claimed – no receipts needed.
BC also has introduced a “$500 Education Coaching Tax Credit” for educators who volunteer afterhours to do just about anything with students – yes, the name is a little misleading. This also boils down to $25.
For those owning foreign assets valued over $100,000 but less than $250,000, there is now a simplified version of Form T1135 for the reporting of those assets.
That’s really it for this season’s personal tax preparation.
Now for a heads up for 2016 and the planning for next year’s taxes.
New, likely includes:
A reduced tax rate for the lowest income level, a new higher income bracket with a higher tax rate, higher inclusion rates for northern allowance, expansion of the first time home buyers credit, a new “Teacher School Supplies Tax Credit” (worth about $150).
Likely gone for next year’s personal tax prep:
The “Family Tax Cut Credit” (income split for families), education amounts (on post-secondary tuition slips), the “Children’s Fitness Tax Credit” (as noted previously) which likely will include the cancellation of BC’s new “Fitness Equipment Tax Credit”.
Remember all the fanfare?