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Child Care Expenses
Childcare expenses can be deducted from the income of the parent with the lower net income. The allowable deduction is a maximum of $8,000 per child under 6 and $5,000 per child aged 7 to 16.
Home Office Write-Offs
A self-employed individual and an employee can write-off a portion of their home expenses by way of a
home office. However, there are a number of rules and restrictions you should be aware of.
Medical expenses are claimable in any 12 month period ending in the taxation year. If both spouses have taxable income it is usually more beneficial to claim all the medical expenses on the tax return of the spouse with lower net income. A credit is generated on the portion of medical expenses which exceed 3% of your net income or any amount over a specified threshold.
Home Buyers Plan & Amount
In 2019 the Home Buyers’ Plan (HBP) withdrawal limit increased from $25,000 to $35,000, for withdrawals made after March 19, 2019.New homeowners qualify for the $5,000 first-time Home Buyers’ Amount (HBA)* if they or their partner have purchased a home in the tax year, and did not live in another home owned by either of them in the four years before the purchase.
RRSP Contribution Deadline
RRSP Contributions must be made by March 1st 2021 to obtain a deduction from current year’s income. Refer to your Notice of Assessment for your maximum contribution amount.
CPP Contribution Rates
Effective 2019 we saw the introduction of the CPP Enhancement. Over a 5 year period, the CPP contribution rate will be increasing to 5.95%. For 2020, the CPP contribution rate is 5.25%.
NOTE: The ‘ Tax Tips’ provided by A Parsons & Associates Inc are NOT intended to cover all tax issues. Please consult with us further for more information and before making any decisions regarding the information found here.