After weeks of delay the Federal Government finally tabled its budget and it is full of goodies for Canadians. I must say I haven’t been a huge fan of this government but let’s face it anytime a government returns some of our hard earned tax dollars is always a good thing. Here are some budget items that I’m happy to finally see.
TFSA Contribution Now $10,000!
First – and this is a big one – the government finally raised the annual contribution limit for TFSAs to $10k! This increase is effective immediately so if you already maxed out your TFSA contributions for 2015 you can now add another $4,500. I will certainly be taking advantage of this and the TFSA is now my favorite account. If you’re a regular saver/investor then you should take advantage of this gift too. It means that we can now stuff up to 10k a year in that account and let it grow tax free! If you’re smart and own growth stocks, mutual funds or ETFs in your TFSA then you’re going to see your assets and net worth skyrocket.
For those who use the TFSA as a glorified savings account you too can benefit from the increase. Keep some of your money in cash and invest the additional amount. For more info the TFSA check out my other articles on my webpage here.
Child Tax Credit Increased to $160 per Child per Month
If you’re a parent you’ll get to benefit from an increase in the Child Tax credit. The new checks will be $160 instead of the $100. This will help with the RESP contributions. I try very hard to save the child tax credit to put in the kids’ RESP.
Income Splitting for Families
Income splitting for families is a gift I made use of this year at tax time. For a two income family, you can transfer some income from the higher earner to the lower one. This can save you up to $2,000 in income taxes. This helped my family save some extra cash this year at tax time which helped us a lot since we’ve had lots of extra expenses since buying our new home.
Other budget highlights include:
- Seniors at age 71 can leave more money in their tax-sheltered Registered Retirement Income Funds each year to help their savings last longer.
- EI benefits to care for a sick or dying relative extended to six months from current six weeks.
- A new home accessibility tax credit to renovate homes to make them more accessible for seniors and people with disabilities.
- Small businesses earning less than half a million dollars will see their tax rate cut to nine per cent from 11 per cent by 2019.
- Industry will see the accelerated capital cost allowance for new equipment extended 10 years.
- Changes to student grant and loan programs to ease eligibility for short-term students and working students.
What do you think? Are you happy with the Federal Budget?
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