Tax Alerts

2017 checklist

Keep up to date with the latest new information and tips

One of the smaller frustrations of dealing with the federal government is that personal information provided by an individual to any one government department is not shared with or communicated with other branches of the government. The intention behind that policy is a good one – it’s there to protect the privacy of the individual. However, it also means that a single individual must contact potentially several government departments, or log on to several websites in order to, for instance, arrange for direct deposit, or to provide updated information – like a change in bank account information.

The early months of the new calendar year can feel like a never-ending series of bills and other financial obligations, especially tax-related financial obligations. Credit card bills from holiday spending, or perhaps a mid-winter vacation, arrive in mid to late January. RRSP contributions to be claimed on the 2017 return must be made on or before March 1, 2018. And, finally, the April 30, 2018 deadline for payment of any final balance of 2017 income taxes looms.

Last year, 85 percent of individual income tax returns filed were prepared and submitted online using one or the other of the Canada Revenue Agency’s (CRA) web-based tax filing services. There’s every reason to expect that the same percentages will apply this year, but there are some other options available to Canadian taxpayers.

While the obligation to file a T1 tax return form is an annual one, the process of completing that form and calculating tax payable is never exactly the same year to year. Change is the one constant in tax, as the federal and provincial governments are continually in the process of “fine-tuning” the tax system by eliminating some existing deductions and credits, changing others and, sometimes, implementing new ones.

Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.

One of the perennial New Year’s resolutions made by many individuals is a commitment to keep on a budget, spend less, save more, deal with any outstanding debt and, generally, to better manage their financial affairs. Fortunately, for those taxpayers (and for everyone else) the start of the new calendar year is also the start of a new tax year and with that, a fresh opportunity to contribute to one’s registered retirement savings plan (RRSP) and tax-free savings account (TFSA). What follows is an outline of the contribution limits and deadlines for both types of plans which will apply for the 2018 tax and calendar year.

Any taxpayer hearing of a tax planning opportunity that offered the possibility of saving hundreds or even thousands of dollars in tax while at the same time increasing his or her eligibility for government benefits, while requiring no advance planning, no expenditure of funds, and almost no expenditure of time could be forgiven for thinking that what was being proposed was an illegal tax scam. In fact, that description applies to pension income splitting which, far from being a tax scam, is a government-sanctioned strategy to allow married taxpayers over the age of 65 (or, in some cases, age 60) to minimize their combined tax bill by dividing their private pension income in a way which creates the best possible tax result.

Dollar amounts on which individual non-refundable federal tax credits for 2018 are based, and the actual tax credit claimable, will be as follows:

The indexing factor for federal tax credits and brackets for 2018 is 1.5%. The following federal tax rates and brackets will be in effect for individuals for the 2018 tax year.

Each new tax year brings with it a listing of tax payment and filing deadlines, as well as some changes with respect to tax planning strategies. Some of the more significant dates and changes for individual taxpayers for 2018 are listed below.

The federal government and each of the provinces (with the exception of Saskatchewan for 2018) and territories provide for indexing of individual income tax brackets and credit amounts. Changes other than indexation which will take effect for 2018 are listed below.