JMRD Wealth Management – Tax Season Edition
We’re approaching that time of year again – Tax Season! This can be a busy time of year as we rush to get our tax slips in order to ensure that we file our returns before the deadline. We wanted to make your lives a little easier by providing a few helpful tips and by highlighting a few key dates that you need to know about for the 2015 tax season.
NBF Tax slips are available online!
Through our Online Documents Service, you can elect to receive your 2015 tax slips electronically, as soon as they are issued! Enjoy easy, secure access to all of your account documents – trade confirmations, prospectuses, portfolio statements and tax slips – in one place! If you do not already have online access please call Faith Hatt at 519-439-6219 or firstname.lastname@example.org.
Signing in to Online Services.
- Go to nbfwm.ca
- Click on the “Client Access” button
- Click on the “Sign up for Online Services” link at the top of the page
- Follow the instructions and submit
How to adjust your document/tax slip delivery preferences:
Once you’ve signed into Online Services, go to the eServices drop down tab and select Electronic Documents. Next select Delivery Preferences and make your changes. It’s that simple!
Tax Slip Availability
- T4RIF tax slips will be available through online services as of January 29, 2016. A paper copy will also be mailed to you before February 29, 2016.
RRSP Contribution slips
Please take note of the following:
- The 2015 RRSP contribution limit is $24,930. You have until February 29, 2016 to make your contribution to deduct the amount on your 2015 tax return.
- If you are ahead of the game and want to make your maximum contribution for the 2016 taxation year, the 2016 contribution limit is $25,370.
- The 2016 TFSA contribution limit is $5500 and you can contribute anytime up to December 31, 2016. Note that if you have not maxed out your TFSA in previous years, you are able to carry forward any unused room
- The 2016 RESP contributions can be made at any time. If you have not maxed out your contributions we can verify any catch up possibilities.
- Other tax notes:
- If you hold foreign property with a cost base greater than $100,000, you must file the foreign income verification statement (CRA Form T1135). As of June 2014, new rules apply to disclosure of this information.
- If you are a U.S. Person for tax purposes, understand your IRS reporting requirements. U.S. Persons (even those who are resident in Canada have tax reporting requirements in the U.S. For example, U.S. persons are required to report any holdings in Passive Foreign Investment Companies (PFICs), which includes mutual funds and exchange traded funds.
Taxation changes for 2016
“Personal Tax rates” starting January 1, 2016
- The tax rate on incomes over $200,000 will increase from 29% to 33%
- The second lowest tax rate will drop from 22% to 20.5%, decreasing taxes by up to $671 (based on 2015 tax brackets)
“Small Business Tax Rate” ($ < 500 000) decreasing over 4 years from 11% to 9%, starting 2016:
- January 1, 2016, the rate = 10.5 per cent;
- January 1, 2017, the rate = 10 per cent;
- January 1, 2018, the rate = 9.5 per cent; and
- January 1, 2019, the rate = 9 per cent.
“Income Splitting” canceled
- The measure that allows some families with children under 18 to reduce their taxes by up to $2,000 will be cancelled, starting 2016
“Universal Child Care Benefit, Canada Child Tax Benefit and National Child Benefit Supplement”
- Will be replaced with a new Canada Child Benefit, for payments starting July 1, 2016; the Liberal party platform had stated that the new benefit would be income-tested and tax-free
“RRIF Minimum Payment”
- The Federal Government has lowered the percentage used to calculate the RRIF minimum payment. Please see attached for new RRIF minimums.
Tax Tips! Don’t forget to claim the following:
- Charitable donations
- Give shares rather than cash
- Medical expenses for the family
- Children’s fitness/arts tax credit
- Child care expense
- Fees for fitness (max $500 per child – 16 years)
- Professional dues
- Public transport amount
- Investment expenses (Management Fees …)
- Tuitions fees
CRA Q &A on Taxation: Click Here for Q&A
Why did I get a T3 Slip?
- The T 3 Slip is a statement of Trust Income. If you hold investments in income trusts (usually referred to as mutual funds), royalty trusts and real estate investment trusts (REITs) you will receive a T3. Along with the T3 slip you will also receive a Summary of Trust Income showing income in chronological order allowing you to reconcile the information on each of your T3 slips.
- Some of the income that will be reported includes: Interest; dividends; capital gains/losses and capital income.
Why did I get a T5 Slip?
- The T5 slip is used to report dividend income, interest and foreign taxes paid on your investments held in a non-registered account. If you hold a US dollar account, you will receive a separate T5 slip for this account. If you own shares of a split share corporation you will receive an additional T5.