Who knew that tax news will put up such a show in 2017. Small business tax changes, cutting down on tax credits for individuals and CRA’s exponentially increasing process times. Nothing went in favour of the tax payer this year. So, let’s discuss all the tax changes that will impact your 2017 tax return:
Tax filing gets delayed:
The tax filing starts on Feb 26th this year which is a week later than last year. This will hugely impact people who rely on their tax refunds in February to cover their expenses.
Softron will be starting the Instant Refund service in the second week of February to offset the delay for their clients.
Tax Credit for Fitness and Arts
The parents will not be able to claim any money spent fitness activities or arts activities of their children on the 2017 tax return. The tax credit was halved for 2016 tax year and has been rolled back for the 2017 tax year. This will put a dent in the tax refunds of families with children and single parents.
No credit for textbooks
Students get a raw deal too. The federal tax credit for education amount and textbook amount has been discontinued effective 2017 tax year. This translates into a loss od $3,720 dollars in tax credit for a student who went to school full time for 8 months.
The beginning of the end of Public Transit Credit
The public transit credit was cancelled effective July 1st, 2017. So, the tax payers will be allowed to claim public transit credit on the tax returns but only for the money they spent on public transit until 30th June 2017. This is the last year that public transit credit can be claimed on the tax returns.
Changes galore @ Small Business Taxes
The business taxes have changed a lot in year 2017 and were a major talking point during the whole year. The changes are as follows:
• No income sprinkling- If the family of the business owners receives income from the business, it must be proved under the new rules that the family member made a significant contribution to the business. Otherwise, it will be considered as income sprinkling and disallowed
• Lower Small Business Tax Rate- The small business rate is being lowered to 10% from 10.5%. This change has been made to offset other changes that will increase the cost of business
• Higher Minimum Wages- In Ontario, the minimum wage is changing from $11.60 to $14.00 on January 1st, 2018. This will impact the cost of business severely for small businesses.
The CRA wait times have increased significantly in 2017 and the auditor general pointed out in his audit report that CRA agents end up providing wrong information at least 30% percent of the times. The call dropping is at 50%.
2018 Tax Season will be a challenge but we at Softron are working harder than ever to ensure that our clients have their taxes handled, accurately and efficiently.
We wish you a very Happy Holidays and New Year! See you in 2018 tax season.