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tax credit. In addition, the maximum amount
for the refundable medical expense supplement has been increased to $750
for 2005 and the maximum annual Child Disability Benefit has been
increased to $2,000 for 2005. If you have a beneficiary
of a Registered Education Savings Plan (RESP) that qualifies for the
disability tax credit in the 21st year of the plan, the period
you can make contributions for that beneficiary will be extended to 30
years instead of 25. The 2005 budget introduced
a new adoption expense tax credit that entitle an individual to deduct 16%
of all eligible adoption expenses up to a maximum of $10,000 starting in
2005. 2005 budget measures for corporations include the elimination of the corporate surtax for taxation years ending after December 31, 2007. This will result in a decrease in the small business tax rate by 1.25% for 2008 taxation years. In a prior year’s budget, it was proposed to reduce the general tax rate by 2% from 28% to 26%. This proposal has been eliminated and the general rate is to stay at 28%. No significant changes were introduced in the 2005 Ontario Budget. |
Important Dates to
Remember
December 15, 2006 - Final 2006 personal income tax instalment is due February 28, 2007 – 2006 T4 and T5 returns are due March
31, 2007 – 2006 T3 trust income tax returns are due April 30, 2007 – 2006 personal income tax returns and final tax payments are due June 15, 2007 – 2006 personal income tax returns for self-employed individuals are due Final corporate tax payments are generally due 3 months after your year-end date (in some cases this may be reduced to 2 months) Corporate tax returns are due 6 months after your year-end date Important Websites for you to be aware of Canada Revenue Agency – Corporate tax matters – 1 (800) 959-5525 GST - (800) 959-5525 Payroll deductions and remittances – 1 (800) 959-5525 Personal tax matters – 1 (800) 959-8281 Trust matters – 1 (800) 959-8281 Ontario Ministry of Finance - http://www.fin.gov.on.ca/, (905) Ontario corporate tax Retail Sales Tax Employer Health Tax Highlights of the November 2005 Federal (Pre-election) “Mini-budget”Finance Minister Ralph Goodale recently presented the Liberal
government’s economic and fiscal update. None of these proposals will
likely survive any longer than the Liberals themselves but there is a good
chance they will be reintroduced in the near future. Politics aside, here are some
highlights relevant to our clients : |
The budget surplus is expected
to be $8.2 billion for 2005-06. A decrease in the lowest
personal tax rate to 15% (from 16%), retroactive to January 1, 2005.
Personal tax cuts of 1% for
the each of the next two tax brackets in 2010. The top personal tax bracket
will be increased to start at $200,000 by 2010. Personal tax credits improved
for the Basic personal amount (to $10,000 by 2009) and Spousal amount (to
$8,500 by 2009). Refundable medical expense
supplement increased to $1,000 in 2006. A phased-in 2% corporate tax reduction (by 2010) and the surtax elimination (in 2008) have returned after being taken out to please the NDP last April. Carry-forward period for
business losses and R&D tax credits increased from ten to twenty
years. Federal capital tax eliminated
in 2006 Income Trust Concerns
addressed On November 23rd, the Finance Minister responded to concerns regarding the need for stability in the income trust market by reducing the personal tax rate on Canadian dividend income. Briefly, the top tax rate on this income will be reduced from 33% to 20% beginning in 2006 (subject to political changes not impacting these proposals). Tax planning for our small business clients just got more interesting! | |