2017 Income Tax Tips: What’s New This Year

It’s getting close to tax season for 2017, and as always there will be some differences in how income tax works compared to previous years. If you want to get a head start on your income taxes, it’s good to know what rules are new, what’s changed, and what’s been completely removed. Here’s a guide for your income this year.

2017 Income Tax Tips

Child Tax Credits & Benefits

There have been a number of changes to your taxes both nationally and provincially. If you’re raising children this year here’s a quick rundown of the changes you can expect for your child tax benefits:

  • British Columbia is getting rid of medical services plan premiums for children who are in school
  • The Federal government is ending the child tax credits for arts, fitness, education and textbooks — any unused tax credits from 2016 can still be carried over to future returns and tuition will remain as a tax credit
  • Canada Child Benefit (CCB) is replacing the Canada Child Tax Benefit (CCTB) — it is a tax-free monthly payment provided to families who qualify that are raising children under 18 years of age

The CCB is a significant change and will pay out benefits over 12 months from July to June and then will be recalculated by the Canada Revenue Agency based on your new income tax return.

Household Tax: What You Should Know

When it comes to filing taxes for your entire household income and on your home, there are also some fairly significant changes at both levels of government. Here’s what you need to know:

  • Income-splitting tax credits for families with children under 18 are being sharply reduced this year and will be capped at $2,000
  • There is a new Home Accessibility Tax Credit (HATC). If you qualify you can claim for some eligible expenses you incurred during a home renovation project
  • You are now required to report some basic information on your tax return when you sell your main residence in order to claim your full principal residence exemption

For the last point on your principal residence, you don’t have to pay tax on the capital gain if the house you sell has always been your principal residence.

Contributions: RRSPs, Tax Bracket & Other Credits

There has also been some slight changes to the maximum amount of contributions you can make to things such as RRSPs, tax brackets, and other credits. The increases for 2017 are made to reflect the rate of inflation over the previous year. The annual limit for tax-free savings account will not change and will stay at $5,500.

Education Professionals & Refundable Tax Credits

People who work in education are able to claim a 15% refundable tax credit for up to $1,000 teaching supplies that they bought in the previous tax year. Not all professions in schools and not all supplies will be eligible. Eligible supplies must be used in the classroom for education purposes and includes:

  • Consumables and art supplies such as construction paper, glue, paint, etc
  • Items for experiments such as seeds, soil, vinegar, baking soda, etc
  • Stationery such as pens, pencils, etc
  • Limited durable goods such as games, puzzles, books, and educational support software

Electronics such as tablets or computers are not considered eligible for this tax credit. For more information on eligible goods and professions, you can consult the CRA’s information page here or contact us to get your questions answered.

 

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