In Tax Tips for Canadians “for Dummies” 2006 edition, one chapter is focused on Tax Changes for 2005 Tax year.
I trust over 50% Canadian donot know about it.
The followingis highlight these ten changes.
1) Tax credit for adoption expenses
For 2005 the total amounts claimed by the parents cannot exceed the lesser of the actual adoption expenses and $10,000. Eligible adoption expenses include fees paid to an adoption agency, travel and accommodation costs for the parents and child, court, legal and administration fees, and document translation fees.
2) Increased retirement savings limits
The maximum amount you may contribute to your RRSP will increase in future years (although you are still limited to 18% of your earned income). The limit for 2005 is $16,500. The limits are scheduled to rise to: $18,000 for 2006, $19,000 for 2007, $20,000 for 2008, $21,000 for 2009, $22,000 for 2010, from 2011 the limit based on the indexed to inflation.
3) Increased investment choices for retirement savings
The 30% foreign property investment limit is eliminated from 2005. That means 100% foreign property in the RRSP/RRIF is allowed.
4) Improved tax assistance for disabled persons
Since June 2005, the maximum Child Disability Benefit supplement to the Child Tax Benefit has been $2,000.
5) Registered Education Savings Plans (RESP) for students with disablities
Where an RESP beneficiary is eligible for the disability tax credit, after the 20th anniversary of the RESP, the maximum period for which contributions can be made is increased from 21 years to 25 years and maximum life of the plan is extended from 25 years to 30 years.
6) Increased government contribution to education savings
If you are a low- or middle-income family, saving for child’s education via are RESP will benefit you more than ever due to changes in the Canada Education Savings Grant (CESG). Now the first $500 contributed to an RESP in a year will attract a 40% CESG if the child’s family has income of #35,595 or less.
7) Epass and authorization code needed to access CRA’s online service “My Account”
To increase the security and protection of personal data, access to the CRA My Account online service is now restricted to users that are both registered with the fedral government (epass) and have obtained the necessary CRA authorization code.
8) Expansion of eligible medical expenses
Beginning in 2005, the following are eligible expenses in adding up your medical expenses for purposes of the tax credit:
. Phototherapy equipment for skin disorders
. Oxygen concentrators
. Deaf-blind intervening services
. Reading services for the blind
. Marijuana under restricted circumstances
9) Taxpayer-requested adjustments and voluntary disclosures
If some error on your tax returns before you find, you can file an adjustment (CRA form T1ADJ “T1 Adjustment Request”) to request changes toy your past tax returns that would benefit you.
10) Income trusts
In September 2005 the federal government announced it was going to take a look at income trusts.
If you want more detail of this book.Go to Costco. It is $10.00 compared the price $19.99 in Chapters.
