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Keeping an Eye On The Tax Changes

Well, we know that with the new government now settling into place and we are headed into a new tax year that there are going to be some changes coming for 2016.  Every Canadian should really review their financial plans to see how the proposed changes may affect them whether in a positive or negative way.

As most of us are aware of those that are in the tax bracket over $200,000 they are going to see some significant changes.   For those that are in the tax bracket of $45,282 to  $90,563 they are going to enjoy a lower tax rate.   With changes taking place like this it is definitely going to mean some shuffling in the financial planning for a lot of people.

This is a year that you may really want to consider taking on an accountant who is aware of these changes and what the implications are going to be and most importantly how they are going to affect you.

While the tax cuts are a welcome change it also means that your revisions also have to be put into place.   For example, those that are in the tax cut bracket range that are going to be making an RRSP contribution you want to make sure that you claim the deduction against your 2015 income. Then those  that are now finding themselves in the higher tax bracket they may want to delay claiming the RRSP contribution until 2016.

Some accountants that are dealing with those in the higher tax brackets are also making other suggestions for those individuals to help take the sting out of the increase.   Financial advisers are telling their clients to take a closer look at their TFSA and their RRSP contributions and to give this more thought and planning as to what will be to their best advantage for their future.

There are different things that must be considered when making decisions on these types of financial planning.   It means that the average person has to forecast what they feel they feel they will be making throughout their years of work and what stage they are at now, and when their proposed plan for retirement is.   That way it helps them decide which is more advantageous to them the TFSA or the RRSP with the future changes that are also in the wind the indicators are that the cut to the second tax bracket is also going to provide some substantial savings and it will work out to about $679 per person.   As far as those at that are wondering just where everything is going to end up with the Universal Child care benefit, the plans are that it will all be changed and replaced with the Child benefit program in July 2016.

 

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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