Affiliated with National Financial Insurance Agency Inc.

Here is a breakdown of the key tax changes that were introduced over the course of the past year…

Federal Tax Relief for 2006 and 2007

1. Effective July 1/06, the tax rate changed from 16% to 15.5% for taxable income under $36,378
2. The basic personal amount that an individual can earn without paying federal personal income tax for 2006 is $8,839. and for 2007 $8,929.
3. As of January 1/06, a new Canada employment credit gives Canadians a break on what it costs to work, recognizing expenses for things such as home computers,uniforms and supplies.
4. As of January 1/07, pensioners will be allowed to allocate up to one-half of their pension income to their spouse (or common-law partner).
5. As of January 1/06, the age credit amount increases by $1000 from $4066. to $5066.
6. As of January 1/06, the maximum amount of eligible pension income that can be used to calculate the pension income credit increases from $1000 to $2000.
7. As of January 1/07, the children’s fitness tax credit will cover eligible expenses up to $500. for enrolment in a physical activity program.
8. As of July 1/06, the tax credit for public transit passes allows individuals to claim a non-refundable tax credit for the cost of monthly public transit passes.
9. As of May 2/06, employees can claim a new $500 deduction to offset the costs of tools in excess of $1000 that they must acquire as a condition of employment, and the self-employed can benefit from an increase, to $500 from $200, in the limit on the cost of tools eligible for the 100% capital cost deduction.
10. As of January 1/06, the textbook tax credit amount will be $65 for each month of full-time post-secondary study and $20 for each month of part-time post-secondary study. Eligibility rules will be the same as those for the education tax credit.
11. As of January 1/06, full exemption of scholarship and bursary income from taxes.
12. As of May 2/06, full exemption from capital gains tax for donations of publicly listed securities to public charities.
13. As of January 1/06, the maximum amount of the refundable medical expense supplement has increased to $1000. from $767, indexed to inflation.
14. As of May 2/06, donations of ecologically sensitive land under the Ecogift program are exempt from capital gain tax.

We do hope that some of these tax credits will make your tax season a little more bearable. If you would like more information that applies to your specific situation, please don’t hesitate to call.

Theresa Wever and the Money Concepts Team.