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Getting it done. Before you even know you need it done.
There are different ways to look at financial health and taxes. For a lot of accountants, it’s about responding to numbers, details and deadlines.
And sometimes that’s enough.
Other people want a partner. Someone to look ahead. Someone who knows their unique personal and business situation—helping them organize, streamline and save money.
Just because we work with numbers, doesn’t mean you have to feel like one.
At Cody & James CPAs, our business starts with people. In fact, most of the clients we started with 20 years ago are still with us. Providing personal service is how we provide a better financial service. The more we understand you, the more we can help—from maximizing personal deductions to delivering unique business insights.
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News and Events
Medical Expense Tax Credit
Written by: Gwyneth James MBA CPA, CGA
In our busy lives, it is easy to forget to set aside information that will be needed in the new year when our tax returns are due again. One example is receipts from a wide range of medical, dental, and related expenses such as health care services, travel expenses for appointments and treatments (>40 KM), medications, glasses, hearing aids, accessibility-related home renovations, dental services, health insurance premiums, and the cost of moving to and living in a Long-Term Care facility.
The CRA Folio S1-F1-C1, Medical Expense Tax Credit, provides extensive information of what is and is not eligible for this tax credit.
As with most tax credits and deductions, the Medical Expense Tax Credit is intended to benefit lower income taxpayers – the total expenses are reduced by 3% of net income (to a maximum of $2,208 for 2015) before being added to the non-refundable tax credits section of Schedule 1. A similar credit exists for provincial income taxes.
Unfortunately, in many cases the benefit of this credit is lost because the taxpayer does not have enough tax owing to apply the tax credits against.
This issue is somewhat remedied by the Refundable Medical Expense Supplement – one of the most overlooked tax deductions. It is available to any adults with eligible medical expenses or disability supports expenses AND employment or self-employment income over $3,421 (in 2015). It differs from the Medical Expense Tax Credit in that it is “refundable”.
The maximum credit for 2015 was $1,172. It is an indexed figure and is reduced if the total of your net income and your spouse’s net income exceed $25,939. It is eliminated if that total exceeds $49,379. If in doubt, keep all your health-related receipts and sort through them later to see what is valid. It’s not a great tax credit, but every little bit counts!
The *New* Canada Child Benefit
Written by: Gwyneth James MBA CPA, CGA
It’s an occupational hazard to be curious about the impact of highly-publicized tax changes so I did a little research this past week on the new Canada Child Benefit (CCB). Families will receive a monthly fixed amount per child that will decrease as their family income increases above $30,000. The CCB is generous and is tax-free. The maximum a family can receive is $6,400 annually per child under 6 and $5,400 annually per child 6-17 years old. Payments will start this July based on income reported on your 2015 tax return.
It is very complicated to try and determine whether families will really be better off with this new structure because so many other tax credits and benefit programs are being eliminated: Universal Child Care Benefit (new and old), Canada Child Tax Benefit (pre-2015), Family Tax Cut (2014 & 2015 only), Children’s Activity Credit and Arts Credit (2006 & 2012 respectively), and the Child Amount. One thing for sure – the time to prepare your tax return may decrease since it will be less complicated!
After running several scenarios with family incomes ranging from the very low ($30,000) to fairly high ($150,000), one spouse earning more than the other versus similar incomes, one child or two, etc. the only folks who stand to lose in the new regime are those around $75,000 family income who benefitted from the Family Tax Cut. Even for those families, if they have two children and didn’t get the full FTC the new scenario will be better.
On the whole, the changes appear to be a move in the right direction; they simplify the previous calculations which were very cumbersome and they reach the intended target of low to middle income families. Be aware, however, that you may receive a smaller refund when you file your tax return next spring.