2019 is an election year and that means new budget with tax changes. Did you know that income tax is the single biggest expense for most Canadian families? So when there are new tax updates, you should stay informed!!
The tax filing deadline may not be until April 30, 2019, but it still pays to plan ahead. You want to be as informed as possible to keep more of your hard-earned money in your pocket.
1.Working Income Tax Benefit got a makeover
The Working Income Tax Benefit is a refundable tax credit that helps give tax relief to low-income individuals and families to encourage them to participate in the workforce.
The Working Income Tax Benefit is being renamed the Canada Workers Benefit.
Under the Working Income Tax Benefit in 2018, single individuals without children were eligible for a maximum benefit of $1,059, while families were eligible for a maximum benefit of $1,922. Those maximum amounts are being increased under the Canada Workers Benefit in 2019 to $1,355 for individuals and $2,335 for families, respectively.
2. TFSA limits increased!
The annual contribution limit on the Tax-Free Savings Account (TFSA) has been increased from $5,500 in 2018 to $6000 in 2019.
TFSA is a better way to save money as your money grows tax free!!
3. Changes to Rates and Limits
- Federal and provincial income tax brackets have been increased to adjust for inflation
- EI premiums have been reduced from 1.66% to 1.62%, means more money with every pay cheque 🙂
- CPP rates have increased from 4.95% to 5.1% . Even though this means more money out of your pay cheque but this will result in higher contributions to your pension plan.
- Canada Child Benefits will be indexed to inflation going forward!!
4. You can now claim your service animals as a Medical Expense!!
The medical expense tax credit has been updated to include service animals. For example, you can claim the expense for a dog trained to help an individual with post-traumatic stress disorder, along with associated expenses like the food and cage for the animal.