Thanks for checking in with RS Tax Service! This section receives periodic updates, letting you know what’s new at RS Tax Service and the tax world in general.
Ontario Healthy Homes Renovation Tax Credit
If you or a family member are over the age of 65, and have recently made accessibility-related updates to your home, you may be eligible for a 15% refundable tax credit.
The credit applies to the addition of a senior’s first or second-floor suite, grab bars, handrails, ramps, walk-in bathtubs, no-slip flooring, hands-free taps, as well as hand-held showerheads.
This credit does not apply to non-house-related purchases, such as wheelchairs, walkers, or other personal medical or mobility products.
CPP/PRB Premium Opt-Out for “Working Beneficiaries”
For those between 60 and 64, you must now continue to pay into the Canada Pension Plan even if you continue to work while receiving benefits. The Canada Pension Plan (CPP) was altered in January of 2012, whereby “Working Beneficiaries’” contributions are placed into a “Post Retirement Benefit” account which will yield a higher monthly pension beginning the following year.
Note: Under this plan, those who continue to work after the age of 65 and before their 70th birthday may opt out of contributing to the Canada Pension Plan Post-Retirement Benefit. One reason most give for opting out is to pay premiums on medical insurance or other health-related costs. Visit the Canada Pension Plan website.
Estate Executor Surtaxes
If your federal and provincial combined taxable income is over $500,000, you will be hit with a new “high income” surtax, bringing your marginal tax rate upwards of 48%. For seniors with no heirs, this may mean a bit more retirement planning. Also, any remaining RRSP or RRIF balances are reported on your final tax return in full, which means any balance not spent could be subject to the new tax rules, as well as leaving less financial resources for your estate and heirs.
Maximize Your OAS
Effective July 1st, 2013, seniors can defer their OAS (Old Age Security) pension for up to five years. This is great for those who are looking to receive a larger disbursement when you do decide to draw a pension cheque. Delaying your pension may also make tax sense, as you may decide to withdraw taxable items first, such as RRSP deposits. Visit Service Canada’s OAS webpage for more details.
Tip: Beware of the “clawback” provision within your OAS, which may occur if your income is over $69,562.00. Splitting your pension with your spouse may also be an alternative.
Family Caregiver Amount (FCA) Raised
After 2012, if you have a dependant with a physical or mental impairment, you may be eligible to claim an additional $2,000.00.
For all your tax needs, call RS Tax Service today!