January 16th, 2017 from Canada Revenue Agency
The CRA’s EFILE systems will stop accepting transmissions of 2012, 2013, 2014 and 2015 (T1) personal income tax and benefit returns at midnight local time on Friday, January 20, 2017 in order to convert our systems to prepare for the next filing season.
Please ensure you transmit any T1 returns and T1135 forms before January 20, 2017 to avoid having to wait until the new program starts or having to paper file during this extended period.
The EFILE program will re-open on Monday, February 20, 2017 at 8:30 a.m. (Eastern time) for the electronic filing of your clients 2013, 2014, 2015 and 2016 personal income tax and benefit returns. Thank you for your continued support and participation.
Taxes Going Up January 1, 2017
Land Transfer Increase in Ontario -Real Estate Purchases
Effective January 1, 2017, the land transfer tax (LTT) rates in Ontario will be amended. A new LTT rate will be applied on the portion of the amount of consideration for a purchase transaction which exceeds $400,000. In such regard, the LTT rate will increase from the current rate of 1.5% to 2.0%.
The date of the agreement of purchase and sale and related date of closing for such transaction will determine whether the new increased LTT rates will apply. Purchasers that have entered into agreements of purchase and sale anytime on or before November 14, 2016, will not be subject to the increased LTT rates, even if the closing of the underlying purchase transaction occurs anytime on or after January 1, 2017. Conversely, purchasers that have entered into agreements of purchase and sale after November 14, 2016, will not be subject to the increased LTT rates if the closing of the underlying purchase transaction occurs prior to January 1, 2017. If the closing of the underlying purchase transaction occurs anytime on or after January 1, 2017, purchasers will be subject to the increased LTT rates.
The calculation of applicable LTT inclusive of the new increased LTT rates will be based upon the following thresholds:
The City of Toronto is also currently considering a number of changes to its municipal land transfer tax (MLTT) regime, including, among other things, increasing MLTT rates to correspond with the new increased provincial LTT rates by (i) adding a new additional MLTT rate on the portion of VOC exceeding $250,000 up to and including $400,000, and (ii) increasing the MLTT rate on VOC exceeding $2,000,000 from 2.0% to 2.5%. To date, such changes have yet to be implemented.
Ontario will help more people purchase their first home by doubling the maximum Land Transfer Tax (LTT) refund for eligible first-time homebuyers to $4,000. The increase will mean that eligible homebuyers in Ontario would pay no LTT on the first $368,000 of the cost of their first home.
December 24, 2016
Personal Tax Changes 2017
The Ontario Children’s Activity Tax Credit and the Ontario Healthy Homes Renovation Tax Credit are proposed to be discontinued as of January 1, 2017.
The Federal Children's Fitness Tax Credit is available for registration and membership costs for prescribed programs of physical activity for children who are, at the beginning of the taxation year, under 16, or under 18 for a child with a disability. The credit was reduced for 2016 and is eliminated thereafter.
Many programs, including those providing enrichment or tutoring in academic subjects, are eligible for the Children's Arts Tax Credit, so make sure you save the receipts from all your children's activities that may qualify. The credit was reduced for 2016 and is eliminated thereafter.
Beginning in September 2017, the Ontario tuition and education tax credits are eliminated. Ontario students will be able to claim the Tuition Tax Credit for eligible tuition fees paid for studies up to and including September 4, 2017. The Education Tax Credit will be available for months of study before September 2017.
The TFSA contribution limit for 2017 will again be $5,500. Please note that at the current rate of inflation, it sould increase to $6,000 in 2019. Also, please note Withholding taxes will be deducted from US and other foreign dividends earned in a TFSA and these are not recoverable.
The RRSP dollar limit for 2017 is $26,010, and for 2018 is $26,230.
The maximum pensionable earnings for 2017 will increase to $55,300 from $54,900. The maximum employee/employee contribution increases to $2,564.10 (2017) from $2,544.30 (20916). The self-employed maximum is $5,128.20 (2017) up from $5,088.60 (2016).
The 2017 EI rate will be reduced from 1.88% to 1.63%, and the maximum insurable earnings (MIE) will increase to $51,300 (2017) from $50,800 (2016). The result is a reduction in the maximum premium to be paid by employees, to $836.19 from $955.04. Also, please make sure you know which employment is insurable, because there is no point in paying premiums if you won't be able to collect employment insurance. Thus, a review of your family payroll should occur.
The WSIB Maximum Insurable Earnings Ceiling for 2017 is $88,500, compared to $88,000 in 2016. Changes to the Maximum Insurable Earnings Ceiling are directly linked to changes in average earnings in Ontario as measured by Statistics Canada, and provisions under the Workplace Safety and Insurance Act. Also, a minimum premium of 1/3 of the above wage rate exists for the construction industry with manditory coverage.
Effective for 2016 and later years, the sale of your principal residence must be reported on your personal income tax return, even if 100% of the gain is sheltered by the principal residence exemption. The penalties for not doing so can be very high at $100 per month for 80 months per person. So please ensure you disclose the sales.
Other Items of Interest
On January 1, 2017, notable alterations to the taxation of life insurance will lead to changes that are quite technical.
• it will take a bit longer to “quick or prepay” a permanent insurance policy; whereas you might currently be able to prepay an insurance policy in about four years or less, depending on product design, it will take no less than eight after 2016;
• permitted exempt insurance policy cash value accumulation will initially increase and then be less than the current regime until clients reach their early 90s; • for level cost products, the cost of insurance rates will likely increase; and • if you purchase a prescribed annuity, more income will be taxable, thereby reducing the net yield.
Pay Day Loans
Ontario's maximum cost of borrowing for a payday loan will drop from $21 per $100 borrowed to $18 per $100 borrowed on January 1, 2017.
Appealing Property Taxes
The Property Tax Assessment Review Board will increase its appeal filing fees:
The residential assessment appeal fee is changing from $75 to $125 per roll number. A $10 discount still applies to e-filed appeals
The non-residential assessment appeal fee is changing from $150 to $300 per roll number. A $10 discount still applies to e-filed appeals.
Copyright @ 2016
From Federal Governmnet
December 30, 2016 – Ottawa, Ontario – Department of Finance Canada
Finance Minister Bill Morneau today announced the income tax deduction limits and expense benefit rates that will apply in 2017 when using an automobile for business purposes.
Although most of the limits and rates that applied in 2016 will continue to apply in 2017, there is one change taking effect as of 2017.
The general prescribed rate that is used to determine the taxable benefit of employees relating to the personal portion of automobile operating expenses paid by their employers will be reduced by 1 cent to 25 cents per kilometre. For taxpayers who are employed principally in selling or leasing automobiles, the prescribed rate used to determine the employee’s taxable benefit will be reduced by 1 cent to 22 cents per kilometre. The amount of this benefit is intended to reflect the costs of operating an automobile.
The additional benefit of having an employer-provided vehicle available for personal use (i.e., the automobile standby charge) is calculated separately based on capital costs and is also included in the employee’s income.
The following limits from 2016 will remain in place for 2017: