As you may know Canadian federal minister of finance, Joe Oliver, presented Tory’s budget on April 21 2015. I am always happy to see when political parties give away delicious candies right before election time. I will skip all but tell you the things that really applicable to you. Sorry international readers. This is for Canadian readers.
1. TFSA contribution room grew from $5,500 per year to $10,000
Oh….. My………. God………….
Starting immediately, the annual TFSA contribution room increased from $5,500 to $10,000. I am too excited for this. I always ran out of my TFSA room around January or February every year but doubling it means, it would run out possibly in March. Three big benefits are
- I would not be paying taxes for Capital gains and dividend income in TFSA
- This will force me to save and invest more every year (including my wife’s, I will have about $9,000 more room every year)
- Less headaches during tax time for complicate investments such as REITs in TFSA
For those of you who do not know what TFSA is, please click the link. It is one of the most beautiful investment tools that many Canadians do not use or misuse as saving account (WHY?????????). Please take advantages of this beautiful tool if you are concerned about your family’s future. Act now than later
2. Small business tax rate will be reduced from 11% to 9%. YAY. More money in your pocket.
January 1, 2016- 10.5%
January 1, 2017- 10%
January 1, 2018- 9.5%
January 1, 2019- 9%
3. Non-eligible dividend tax rates will increase.
4. Home accessibility tax credit
- 15% tax credit on up to $10,000 of eligible expenditures per qualifying individual, per eligible dwelling
- Eligible individuals are who have or could have claimed one of the following amounts in respect of a qualifying individual:spouse amount, eligible dependant amount, caregiver amount, infirm dependant amount
- Eligible expenditures to be incurred to improve the accessibility for a qualifying individual of his or her principal residence
- Qualifying individual: individuals who are 65 years of age or older, persons with disabilities
- Applicable to work performed and paid for and/or goods acquired as of 2016
5. Increase of Lifetime Capital Gains Exemption
Another amazing news for small business owners who may be selling their corporations in the future. Lifetime Capital Gains Exemption has increased from $813,600 in 2015 to $1,000,000.
6. Minimum withdrawals for Registered Retirement Income Funds (RRIF)
The existing RRIF required someone who turned 71 in 2014 to withdraw 7.38% of the Jan 1 2015 market value of the assets this year. Under the new rules, that same person would have to withdraw 5.28%. By age 94, they would be forced to withdraw 18.7%.
Have you enjoyed the post? Then share the post with your Facebook friends, like my Facebook page and subscribe your emails below for more free articles. Also your comments will be always valued and appreciated!
I did a happy dance 😀
Haha yeah I did the exactly the same. That was a beautiful day. 🙂
When I seen the news I was pretty stoked i must say! Do you know if that’s the limit we can put in 2015 or do we need to wait until 2016?
Effective immediately. So you can add $4,500 now if you want. Check out the following article.
Awesome! Thank for sharing the link 🙂
That’s pretty awesome. A very nice increase.
Yeah, exactly. The change will accelerate our financial independence by some years for sure!
Well I learned something new by coming over to your site again! I didn’t know that the TFSA was effective immediately. I have stopped depositing because I was topped up, guess I gotta start again.
Yeah it is effective immediately regardless whether the budget is passed or not. It will likely pass with the majority government and even if it doesn’t CRA won’t punish the people who already contributed $10,000 in 2015. What a great news for all Canadians!
That’s a very nice increase in the TFSA!
Just when I thought I was about to max out my TFSA, the new contribution limit will set me back a couple more months. : )
I hope that the contribution limit remains in 2016. I had heard rumours that if Justin Trudeau was elected as PM, he would reverse the limit though.
Yes. I heard that and that probably the reason why he would not get my votes for sure. I am super excited for $10,000 contribution limit. This will accelerate my retirement. Haha. Cheers!
Sad that in the US our politicians do not do anything similar, but our current socialists consider saving into your own IRA a dirty word and people doing it criminals, so although they have their mouths full of words about helping middle class or poor they only help giving them money from other peoples pockets. So good for you that now you can contribute more.
Yeah. As much as I like US for being the land of opportunities when it comes to investing environment I certainly like the current movement of Canadian politicians.
When you file the tax returns for say year 2015. If at that time I have 10,000 CAD plus the dividends in my TFSA investing account in the form of shares. Do I need to mention it separately in the tax form?
As far as I know you don’t need to worry anything about any tax matters in TFSA plans but I am not a tax specialist so please consult with your tax accountant. It would be amazing to get $10,000 of dividend from TFSA though. What investments do you have in your TFSA?
I’m not Canadian, but I’m glad to see that small business taxes are going down for your guys! I had no idea how annoying taxes and such are for small business until I became self-employed.
I also had to click on this article because Janice cracks me up! hahaha great video clip.
Yeah, things are really looking out for small business owners which is great. Janice cracks everyone up. My wife copies Janice once in a while that makes me copy a couple of times when that happens. Such a beautiful clip. 🙂 Thanks for stopping by Untemplater!