New Tax tactics Federal Budget Commentary

Federal Budget Highs and Lows

 

The government giveth and taketh away with this years federal budget .

Here are a few of the highlights

Lifetime Capital gains exemption is a high . Increased to $800,000 for 2014 and indexed for inflation after ,this will allow for less tax owed on farm property or qualified small business corporation share dispositions or sales.

No more safety deposit box  tax deduction  for the cost of renting a safety deposit box for the purpose of earning business or investment income.

Good news for part time farmers , they can now double the amount claimed against their income from other souces . The restricted farm loss deduction limit will now be $17,500.

No more insurance loopholes. Previously 10/8 and leverage insured annuity strategies used by some to create tax advantages will no longer be recognized as such.

Some where in between is the new credits for dividends. The credit after 2013 will drop to 11%, but the gross up is now at 18% instead of the previous 25% . Overall however this tax is higher than before.

More money has been allotted to compliance issues , what does this mean for the average Canadian  ?  It means more audits  more often  !!  so get audit ready ! use a reputable tax preparation service .

 

 ON the family side this budget proposes to extend the adoption period by moving back the beginning of the period to the time the adoptive parents make the application to register with the provincial ministry responsible for adoption.

This change will allow additional expenses related to adoptions such as fees for provincially required home study and mandatory adoption courses to be eligible for this credit.This will apply to adoptions finalized in 2012.

The Canada Job Grant could provide $15,000 or more per person to ensure Canadians are getting the skills employers are seeking. Up to $5,000 will be provided by the federal government, and that amount will be matched by the province/territory and the employer. To be eligible businesses must have a plan  to train unemployed or under-employed Canadians for an existing or better job. Good news for those currently working  or unable to find a job.

 

This piece is meant to be for information only. Data from  FBC.ca and Allied Associates LLP  Please review your personal tax situation  with a qualified tax professional . . Heather Lang, Cedarlane Financial and FundEX  Investments Inc are not responsible for any actions beyond this information piece . For the most recent information please refer to www.cra.gc.ca   or ServiceCanada.gc.ca

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