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With winter's worst (hopefully) behind us, tax season is here, and there are many changes that families will want to be aware of.
Tax time is never fun, but it's even worse when you miss out on credits or deductions you may have qualified for. Complicating matters this year are several taxation changes due to a Liberal overhaul of several Harper-era measures.
"I've seen more changes this year than in the past three years," says Lisa Gittens, a tax expert at H&R Block.
Here are eight things families will want to be aware of when filling out their 2016 return.
1. Last chance on certain tax credits
The government is phasing out a handful of tax credits and focusing on larger benefits. The children's arts and fitness tax credits will be halved for the 2016 tax year, and cut completely next year, meaning families will no longer be able to defray costs for things like swimming lessons, ballet and tutoring. For post-secondary students, the education and textbook credits are being eliminated in 2017, although education amounts carried forward from previous years will still be claimable.
2. No more income splitting
Also gone is the Family Tax Cut, which lets the higher-earning spouse transfer up to $50,000 of income to the lower-earner. During the 2015 election, the Liberals promised to cut it, calling it a "tax break for the wealthy."
With the benefit gone, Gittens recommends a spousal RRSP, which allows the higher-earner to contribute to the lower-earning spouse's RRSP and claim the tax benefit. "You may have an RRSP set up, but you haven't thought about setting it up for your spouse. This is an ideal time to use that strategy," she says.
3. Changes to child benefits
The Canada Child Benefit was a signature feature of the 2016 budget, replacing the old Universal Child Care Benefit and the Canada Child Tax Benefit. It's non-taxable, so you don't have to claim it. However, in order to continue to receive the benefit, both parents must file a return, even if one doesn't generate any income, says Gittens.
Also keep in mind that the benefit started in July, so you still have to claim the taxable UCC for the first six months of the year.
4. New tax rates
New tax rates mean you may or may not be pleasantly surprised by the size of your tax bill this year. If you're in the meaty middle that earns between $45,000 and $90,000, your rate will come down to 20.5 percent from 22 percent.
"Most Canadians will be receiving more money at the end of the day than they were under the old system," says Jamie Golombek, managing director of tax and estate planning at CIBC Wealth Strategies Group.
However, high-income earners will be paying more due to a new 33 percent bracket for people earnings more than $200,000.
5. Child care expenses
Childcare costs are usually the biggest deduction available for families, says Golombek. But what many people don't realize is that it goes beyond simply daycare. If you have a nanny, you can claim that expense, but also babysitting, if it's during the day, and summer or day camp.
6. Disability tax credit and family caregiver amount
If you have family members with a disability there are certain credits that may be available to you. The Disability Tax Credit is available to people with disabilities to reduce their taxes. For children under age 18, a parent or caregiver may be able to claim the unused amount.
If you're a caregiver to a family member with physical or mental impairments, you may also be able to claim an additional $2,121, according to the Canada Revenue Agency.
7. Selling your principal residence
Selling your home has typically not been something you've had to report on your taxes, because usually Canadians don't get taxed for capital gains on their principle residence. But starting with the 2016 tax year, individuals who sold their principal residence during the year must report the sale. The government is ostensibly doing this to crack down on people who try to pass off income-generating homes as their principal residence.
8. eFile early, get your refund early
Tax deadline is April 30, but if you want to get ahead of the game, file early, before the government is inundated with last-minute returns. You can still file the old paper return, but Gittens says you'll be looking at a turnaround time of anywhere up to eight weeks, versus 10-14 days for a return filed early and electronically.
Ryan Brook Image by: Ryan Brook
Spend quality time with the ones you love and create happy memories that will last you a lifetime. Learn about why it's important to make family date night part of your routine.
Couples are often reminded they need to continue to date their partners long after they're married and possibly have kids. It's important to continue to connect on a romantic level and do exciting things together, not just crash on the couch at the end of the workday.
The same concept can be applied to families. We all get so swept up in work, school and, in particular, technology, that sometimes families manage to live under the same roof but spend very little quality time together.
That's where family date night comes in. Just like continuing to date your partner, it can be beneficial for your family's relationship as a whole to set aside a dedicated time once per week or biweekly to do something together.
"Spending quality time is an important way to tell our family that we love them, that of all the things we could be doing and all the people we could be doing them with, we are choosing to be with them," says Marion Goertz, a registered marriage and family therapist based in Toronto. She says really listening to your children, talking to them and getting to know them "provides a positive impact on the neuroscience of their brains that video games and online activities can't replicate."
Family date nights are good for your spirit and your brain: "The learning and loving goes both ways! Children generally have new and creative ways to respond to the world around them, whereas adults can easily forget how to play, how to be silly and how to ask questions about the, ‘why or why not' of things," says Goertz.
The best family date nights will accommodate all the ages, stages and mental and physical interests and capabilities of each family member in your home. Don't alienate one family member or choose an activity somebody dreads – the point is to all have fun together.
When you're devising how you'll spend your family date nights, get input from the whole family. Take turns coming up with suggestions, keep tabs on seasonal or special events in your area or try to come up with something completely new everyone would like to try. "Remember that kids are all about sampling," says Goertz. "It's wisest to try before you buy and enjoy the experience of trying out a number of different things."