Although 2018 didn't bring major tax changes, here are some changes worth knowing about that may help you save money. We've also included some helpful reminders and tips to make tax filing easier for 2018.
- The maximum dollar limit for 2018 for contributing to your Retirement Savings Plan (RRSP, or RSP at Tangerine) is $26,230. However, check your Notice of Assessment or log into the Canada Revenue Agency's (CRA) My Account to determine your personal available contribution room for 2018. If you want to deduct your contribution in the 2018 tax year, make your contributions by March 1, 2019.
- You'll be able to open a Registered Education Savings Plan (RESP) and, if you qualify, claim the $500 Canada Learning Bond grant at the same time you apply for a birth certificate for your child. This automatically enrolls children born into low-income families for the grant.
Indexing to Inflation
- Every year, non-refundable tax credits and federal income tax brackets are indexed to inflation. The 2018 indexation increases, which are based on the Canadian Consumer Price Index, were 1.5%. That means the basic personal amount, the amount you can earn without paying any federal income tax, has increased to $11,809 in 2018. At the other end of the spectrum, the top federal tax bracket of 33% kicks in at taxable income over $205,842.
- The Canada child benefit was indexed starting in July 2018 and now provides up to $6,496 per child under the age of 6, and up to $5,481 per child aged 6 to 17.
Don't Forget the Canada Caregiver Credit Introduced in 2017
- Beginning in the 2017 tax year, the family caregiver amount, the amount for infirm dependents age 18 or older, and the caregiver amount have all been consolidated and replaced by the new Canada caregiver credit (CCC). You can claim the CCC if you care for your spouse or common-law partner, minor child, or other eligible relative who is dependent on you because of a mental or physical infirmity.
Less Work for You
- Get organized by using this checklist to help make filing your taxes as efficient and painless as possible.
- If you use certified tax software to prepare your return, it'll be updated with the latest tax changes. It'll also allow you to file online quickly, accurately, and at your convenience, and receive any refund you may be owed in a matter of days.
- Using Auto-fill my return allows the CRA to instantly transfer the most accurate and up-to-date tax information they hold, such as from T4 and RRSP/RSP slips, directly to the proper places in your tax return.