Most of you have filed your 2015 taxes on time and before the May 2 2016 deadline.
If you haven’t yet and you are expecting a refund, you can relax: you are not penalized for being late (CRA doesn’t mind having your money a bit longer), but get it filed soon so you can get your refund. And if you are expecting GST credits or Child Tax benefits, you need to file soon so those credits aren’t delayed.
If you expect that you may owe Canada Revenue Agency, you definitely need to get it filed before May 31. You will still face a penalty (5% of what you owe), but at least it won’t be more than that (it can be an additional 1% for each month you delay filing). And the interest started accumulating on May 3 (the interest rate is a reasonable 5%).
If you are self-employed, you have until June 15 2016 to file your personal income taxes (and your spouse too). The interest does start accumulating, but at least there is no penalty if you file by June 15, so don’t delay!
If you filed on time and cannot pay your amount in full; contact CRA to make payment arrangements. Generally as long as you pay regularly and have it paid off within 12 months, CRA does not “bother you”. But don’t ignore them! They can garnish your payments if you ignore them too long.
The June 15 deadline applies to Snowbirds in a different way. If you spend about 120 days or more in the USA each year, there is a special tax form you need to send to the IRS. Don’t delay or avoid it. If you don’t file it and you should, one day you may arrive at the US border and they may not let you in. They do know when you come and go each year (remember we now need to have passports).
You do not pay any taxes when you file this return, it’s just an information return. I can help you complete the form (no charge). All I ask is for you to write down each of your trips to the US in the past 3-4 years. And include the times you go down for just a few days (for the Casino, or golfing, or camping).
The Manitoba Health Pharmacare letters should be arriving soon giving you information about what your Pharmacare (eligible prescriptions) deductible is for the 2016/2017 year; it’s based on the 2014 personal income taxes.
If your net family income for 2016 will be 10% less than it was in 2014, you can request the deductible be reduced. Let me know if you want some help with the form.
I wrote last month that I think the ambulance fees should be included in the Pharmacare deductible; talk to your newly elected MLA about the idea. I believe those with lower incomes should have their ambulance fees covered by Manitoba Health and those with higher incomes should still pay (or through their private health plans).
Many families with children under 18 will be happy this summer.
The new federal government has created a new Canada Child Benefit (CCB) providing monthly tax-free benefits that are tied to income, to replace the Universal Child Care Benefit(UCCB), Canada Child Tax Benefit (CCTB) and National Child Benefit Supplement (NCBS). The Canada Child Benefit payments will start in July 2016.
The new Canada child benefit will be based on your family’s 2015 net income. For families with net family income under $100,000 your monthly benefit will likely increase; those with incomes over $100,000 will see a decrease. There is a good calculator on CRA’s website (cra.gc.ca).
Use the calculator to see what happens to the Benefit if you buy RRSPs and reduce your family income. Not only do you save on taxes, but a reduction in family income will increase the Canada Child Benefit too, saving you even more money. Another reason to consider buying RRSPs to save for the future. Those with family net income of $50,000 to 110,000 will really see significant savings with RRSP contributions.
Even though the major rush of “tax season” is now over, we are open year round to adjust your past tax returns, answer questions, and help with other forms including the Disability Tax Credit, Manitoba Primary Caregiver Tax Credit, Guaranteed Income Supplement, Pharmacare Deductible reduction and more.
Anni Markmann Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact her at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca.