Personal Tax Information:

2018 Personal Tax Checklist

Lifetime Capital Gains Exemption

In 2018, the lifetime capital gains exemption was increased to $848,252 for qualified small business shares and $1,000,000 for farm/fishing property. In 2019, the lifetime capital gains exemption will be increased to $866,912 for qualified small business shares and $1,000,000 for farm/fishing property.

Tax-Free Savings Account (TFSA):

In 2018, the annual maximum dollar amount that can be contributed to a tax-free savings account is $5,500. In 2019, the maximum dollar amount which can be contributed to a TFSA annually will increase to $6,000.

Canada Child Benefit (CCB):

The CCB replaced the UCCB (Universal Child Care Benefit) as of July 2016. In 2018, families with less than $30,000 in annual net income can receive up to these maximum yearly benefits:

$6,496 per child under the age of 6.

$5,481 per child aged 6 through 17.

An additional $2,771 per child eligible for the disability tax credit.

Benefits received will decrease progressively based on income level.

House sales as of 2016

Starting with the 2016 tax filing, taxpayers are required to report basic information (date of acquisition, proceeds of disposition and description of the property) on their income tax return when they sell their principal residence.  Prior to the change CRA did not require any reporting related to the sale of a principal residence if the property was your principal residence for every year you owned it.

Individuals who sell their principal residence will report the sale the T1 Income Tax Return.  This change will include all sales that occur on or after January 1, 2016.

Do you use part of the home for business/rental?

Individual's might have to split the selling price and the adjusted cost base between the personal and business portion of your home.

Deemed Dispositions?

The change applies to deemed dispositions. Example, a deemed disposition will occur if there is a change in use of the property: A change in all or part of your personal home to a rental or business operation or vice versa.

Closer connections reporting form for Canadian's that travel in the USA

You are considered a U.S. resident if you meet the substantial presence test for the year. You meet this test if you were physically present in the United States for at least:

• 31 days during the year and

• 183 days in total during the three prior years, counting all the days of physical presence in prior year, 1/3 the number of days of presence in the 2nd prior year and, 1/6 the number of days in the third prior year. 

If this is the case you should be filing IRS Form 8840.  The form, in essence, acknowledges that you met or exceeded the "substantial presence test" BUT are not going to be filing a U.S. income tax return due to the fact that you maintain "a closer connection" to a foreign country, such as Canada, where you will be paying annual income tax.

Foreign Income Reporting Requirements - Form T1135

In light of some recent changes by the Canada Revenue Agency and further clarification on the foreign reporting requirements, it should be noted that a T1135 form is required for any individual, corporation or trust resident in Canada who holds foreign property with a combined total cost of more than $100,000 Canadian. Significant penalties may apply to any applicable party that fails to provide a T1135 form. 

Adoption Expense Tax Credit:

The adoption expense tax credit was broadened to include eligible expenses incurred prior to the time a child is matched with adoptive parents, beginning when prospective parents register with a provincial ministry or adoption agency

Canada Pension Plan (CPP):

Workers aged 60-65 are now required to make CPP contributions even if they are already collecting CPP. These contributions will go towards the new Post-Retirement Benefit (PRB) which increases retirement income and rises with increases in the cost of living. The PRB will be paid starting in 2013. Workers who are between the ages of 65-70 who are receiving CPP can elect to stop contributing by completing form CPT30.  If no election is made, contributions are still required

Under the new CPP rules, the reduction for drawing CPP prior to age 65 is increased to 0.52% per month for 2012 and will further increase by 0.02% in each of the next four years.  In 2016, if someone started receiving CPP at age 60, they would realize a total reduction of 36%. Conversely, if payments are delayed until after age 65, payments will increase by 0.7% per month.  If an individual begins receiving CPP at age 70 they will realize a total increase of 42%. Based on a 4% return, if a person expects to live to age 85 (average life expectancy) the optimal time to begin receiving CPP is at age 68.