TAX TIPS & PITS: Federal budget’s impact on personal taxes

With the 2014 budget fresh in-mind, here is what most of us need to know for personal taxes.

With the 2014 budget fresh in-mind, here is what most of us need to know for personal taxes.

Search and rescue volunteers, effective 2014 tax season, have their own tax credit identical to the volunteer fire fighter $450 credit introduced a few years back. Individuals cannot claim both credits.

And that’s really all the tax prep excitement for the new budget.

How about 2013 tax prep getting underway?

The 2013 budget – tabled a year ago – brings about a dozen tax changes for 2013 tax prep and 2014 tax planning.

Announcing the “First-time Super Donation Credit” for 2013. “First time” refers to a taxpayer AND his/her spouse, NEITHER having claimed a charitable donation in the past FIVE years. It doesn’t refer to a donor who gives to a charitable organization for the first time. To keep the math simple, the maximum amount is $1,000 of 2013 monetary donations and calculates into a $250 bonus tax credit.  It’s a one-time credit but can be used in any of the next five years.

There are also 2013 tax changes applicable to small segments of taxpayers.  Check out the CRA website if you have anything to do with mineral exploration credits, LSVCC credits, synthetic dispositions, character conversion transactions, loss-trading in trusts, accelerated capital cost allowance, restricted farm losses, or corporate control provisions.

For 2014 tax planning purposes, the “Lifetime Capital Gains Exemption” increases from $750,000 to $800,000. This is used to mitigate the tax liability of taxpayers who have capital gains upon the sale of qualified Canadian small business corporations, farm or fish properties.

But where the government giveth, it also taketh away.  The dividend tax credit formula applicable to the aforementioned Canadian small corps “non-eligible dividends” has been changed for 2014 so the effective tax rate is now marginally higher meaning the shareholders of these small companies will pay more tax on dividends paid.

And effective 2014, the borrowing against 10/8 life insurance policies and leveraged insured annuity policies and then claiming the interest expense accrued for the investment made within these types of policies is no longer permitted .

Finally, the long time safety deposit box expense will no longer be an allowable deduction for next year’s tax prep.

Looking for good news?  How about a reminder of some lesser known credits from prior years still in effect.

First available in 2013, the BC Government continues encouraging seniors to stay in their home by again offering the “Seniors’ Home Renovation Tax Credit”. This is a refundable tax credit of up to $1,000 available to seniors, or to those who have a senior living in their home, to make the home elderly friendly.  Examples include installing hand rails, door levers or motion lights and widening doorways, lowering counters or building elevators.  Also included are major fixtures like ramps and tubs.

The “New Home Buyer” $750 non-refundable tax credit continues.  This is not a credit for a new home purchase.  It’s for a first time buyer defined as someone who has not owned a home for the previous five years.

Ron Clarke has his MBA and is a business owner in Trail, providing accounting and tax services. Email him at ron.clarke@JBSbiz.ca. Previous Tax Tips & Pits columns visit www.JBSbiz.net.

Just Posted

“The Spirit of Family” enhances the Beaver Valley both in the daytime and at night. Photo: Submitted
Family sculpture installed at the Fruitvale Memorial Hall

Locals are encouraged to swing by Fruitvale Memorial Hall to take a… Continue reading

In 1927, swimmers enjoyed a day in the water at the CGIT and CSET Camp in Summerland. While none of the people in this photograph have smart phones, there is some debate about whether a beach image from the United Kingdom in 1943 shows a man using a smart phone. (Photograph courtesy of the Summerland Museum)
COLUMN: The mystery of the time-travelling tourist

Was the man in a 1943 photograph checking his smart phone?

Daryl Jolly, his wife Kerry Pagdin, their sons Cole Jolly (left) and Graeme Jolly, and their dogs Gracie and Clover. Photo: Submitted
Selkirk College arts chair diagnosed with lung cancer, family launches fund drive

Daryl Jolly co-founded the college’s digital arts program

The flotation line at Gyro Park beach in East Trail, shown here during low water, is for emergency purposes only and does not delineate a safe swimming area. Photo: Trail Times file
City of Trail cautions beach users

Gyro Park beach questions should be directed to the roads superintendent at 250.364.0817.

Presently in Canada, it is illegal to be in possession of a personal stun gun. Use of this tool is only licensed to federal and provincial police officers. The personal use of stun guns by unlicensed civilians is considered to be illegal and considered under the Canadian Criminal Code to be the equivalent of a weapon. Anyone found importing or in possession of a personal stun gun and is not a licensed law enforcement officer can be prosecuted under the Canadian Criminal Code. Photo: BC RCMP
Trail man faces weapons charge after police confiscate stun gun

The incident took place on Sunday near downtown Trail

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

Tulips bloom in front of the Supreme Court of Canada in Ottawa, Thursday, May 10, 2018. Day two of a full week of scheduled hearings will be heard in Federal Court today on a case involving Indigenous children unnecessarily taken into foster care by what all parties call Canada’s “broken child welfare system.” THE CANADIAN PRESS/Sean Kilpatrick
AFN slams Ottawa for ‘heartless’ legal challenge of First Nations child compensation

2019 decision awarded $40,000 to each Indigenous child removed before 2006

Lindsay, Isla and Ethan Fischer & Maddie, Everly, Ray and Jessica Pressacc of the Tadanac Residents Association along with Aron Burke (Kootenay Savings Community Liaison) Kootenay Savings file
Kootenay Savings Foundation continues community support

The Kootenay Savings Foundation has once again handed out their twice a… Continue reading

Ivy was thrown out of a moving vehicle in Kelowna. Her tail was severely injured and will be amputated. (BC SPCA)
Kitten thrown from moving vehicle, needs help: Kelowna SPCA

The seven-month-old kitten had severe tail and femur injuries

A health-care worker holds up a sign signalling she needs more COVID-19 vaccines at the ‘hockey hub’ mass vaccination facility at the CAA Centre during the COVID-19 pandemic in Brampton, Ont., on Friday, June 4, 2021. This NHL-sized hockey rink is one of CanadaÕs largest vaccination centres. THE CANADIAN PRESS/Nathan Denette
‘Vaxxed to the max’: Feds launch Ask an Expert campaign to encourage COVID shots

Survey shows that confidence in vaccines has risen this spring

Port Alberni court house (Alberni Valley News)
Inquest set into 2016 death of B.C. teen after a day spent in police custody

18-year-old Jocelyn George died of heart failure in hospital after spending time in jail cell

Children’s shoes and flowers are shown after being placed outside the Ontario legislature in Toronto on Monday, May 31, 2021. THE CANADIAN PRESS/Frank Gunn
Ontario commits $10 million to investigate burial sites at residential schools

Truth and Reconciliation Commission identified 12 locations of unmarked burial sites in Ontario

Singer-songwriter Jann Arden is pictured with a draft horse. (Canadian Horse Defence Coalition)
Jann Arden backs petition to stop ‘appalling’ live horse export, slaughter

June 14 is the International Day to End Live Export of Animals

Two hundred and fifteen lights are placed on the lawn outside the Residential School in Kamloops, B.C., Saturday, June, 13, 2021. The remains of 215 children were discovered buried near the former Kamloops Indian Residential School earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Days after Kamloops remains discovery, Tk’emlups families gather to unite, move ahead

‘We have to work together because this is going to be setting a precedent for the rest of the country’

Most Read