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Tax Updates 2008
Highlights of Personal Tax Changes to 2007 & 2008
- Canada Employment Credit - $1,000 for 2007.
- Textbook Tax Credit ?Effective 2006, based on $65/per month for
each full time month and $20/per month for each part-time month.
- Children𠏋 Fitness Tax Credit - Effective 2007, a non-refundable tax
credit based on up to $500 in eligible fees for children under
16 in eligible program of physical activity.
- Public Transit Passes Tax Credit - Based on cost of public transit
monthly passes after July 1, 2006.
- Pension Income Tax Credit - Pension credit has been doubled from
$1,000 to $2,000 starting from 2006.
- Cost of Tools - An annual deduction of up to $500 of the cost of
eligible new tools in excess of $1,000 acquired by an employed
tradesperson after May 1, 2006.
- Eliminate income tax on income from scholarships, bursaries and
fellowships commencing 2006.
- After May 1, 2006, capital gains inclusion rate for donations of
publicly traded securities to charitable organizations
reduced from 25% to nil.
- Universal Child Care Benefit (UCCB) provides $100 per month per child
under 6 beginning July 1, 2006. Amounts received under the UCCB will
be taxable in the hands of the lower-income spouse.
- For 2007, the basic personal amount is raised to $9,600 from
the 2006 amount of $8,639.
- Non-capital losses carried forward - The loss carry forward period has
been extended to 20 years from 10 years after 2005.
- Income tax on eligible dividends received from public corporations is
effectively reduced through higher gross up on dividends and dividend
tax credit. The gross-up on eligible dividend is increased from 25%
to 45% and the federal tax credit is increased from 2/3
to 11/18 of the gross-up.
- GST is reduced from 7% to 6% effective July 1, 2006, and 5% effective
January 1, 2008.
- Effective 2007, the age at which RRSP and RRP will mature is
increased from 69 to 71.
- Effective 2007, the lifetime RESP contribution limit is increase
from $42,000 to $50,000, and the maximum annual grant is
increased from $2,000 to $2,500, to a lifetime limit of $7,200.
- Effective 2007, retirees can elect to split up to 50% of the retirement
income to their spouses/common law partners.
Tax Facts and Figures for B.C. Residents
2007 combined Federal and B.C. persoanl tax rates :
| Income brackets |
Tax rate |
| $0 - $34,000 |
20.35% |
| $34,000 - $37,000 |
23.15% |
| $37,000 - $68,000 |
30.15% |
| $68,000 - $74,000 |
32.5% |
| $74,000 - $79,000 |
36.5% |
| $79,000 - $96,000 |
38.29% |
| $96,000 - $121,000 |
40.7% |
| Over $121,000 |
43.7% |
2007 personal tax credits (Federal & B.C. rates):
| |
Federal |
BC |
| Basic personal |
9,600 |
9,027 |
| Spouse or eligible dependent |
9,600 |
7,729 |
| Dependent under 18 |
2,000 |
2,000 |
| Age exemption |
5,177 |
4,048 |
| Dependent over 18 and infirm |
4,019 |
3,949 |
| Disability amount |
6,890 |
6,770 |
| Caregiver amount |
4,019 |
3,949 |
2007 & 2008 combined Federal and B.C. Corporate Tax Rates:
| |
2008 |
2007 |
| General Rate |
31.50% |
34.12% |
| Manufacturing |
31.5% |
34.12% |
| Investment income for CCPC |
46.67% |
47.79% |
| Small business for CCPC, income under $400,000 |
15.5% |
17.62% |
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