As we settle into 2021, it will not be long before Canadians start focusing their attention on compiling their receipts and look ahead to filing their tax returns. Here are a few important numbers you may need to know.
Working Canadians:
RRSP Contribution Limit: The maximum contribution limit for 2020 was $27,230, this year it’s $27,830.
TFSA Limit: The annual contribution remains the same at $6000. However, if you have never contributed to a TFSA the maximum cumulative amount is $75,500.
Basic Personal Amount: The basic personal amount for individuals earning $151,978 or less is $13,808, for 2021. For those taxpayers that earn more than $151,978 the basic personal amount is gradually clawed back until it reaches $12,421 for net income of $216,511. For 2020, the basic personal amount ranges from $12,298 to $13,299.
Medical Expense threshold: For 2021 the maximum threshold is 3% of net income or $2,421 whichever the lessor. For 2020, the maximum is 3% or $2,397 whichever the lessor.
Low-interest loans: If you lent your family money to re-invest, the current rate you must charge them on the loan is 1% to avoid the secondary income being attributed back to you.
Home buyers’ credit: Did you purchase a home in 2020? You may be able to claim up to $5000 of the purchase cost and receive a non-refundable tax credit of up to $750.
For Seniors:
Age amount: If you were 65yrs or older on December 31st you can claim up to $7,637 for 2020 and $7,713 for 2021.
OAS Claw Back threshold: If your total income in 2020 exceeded $79,054 you may have to repay some or all your OAS pension, for 2021 it is $79,845.
If you have children and/or dependants:
Canada Child Benefit: The maximum CCB for 2021 is $6,833 per child under age 6 and up to $5,765 for children ages 6 – 17yrs. For 2020 the amounts are $6,765 and $5,708 respectably. Eligible recipients received an additional $300 per child in 2020 as part of the government’s Covid-19 relief program.
Child disability benefit: This is a tax-free benefit of up to $2,886 (2020) for families with children under 18yrs with a sever and prolonged impairment in physical or mental functions. The 2021 the amount is $2,915.
Disability amount: The non-refundable credit for 2020 is $8,576 (non-refundable credit $8,662 for 2021), with a supplement up to $5,003 for people under 18yrs ($5,053 in 2021).
Canada Caregiver credit: If you have a dependant who is physically or mentally impaired, you may be able to claim up to $2,273 for 2020, ($2,295 for 2021) when calculating certain non-refundable tax credits. For infirm dependants 18 or older, the amount for 2020 is $7,276 and $7,348 for 2021.
As always, I recommend you use a qualified professional to help with financial matters, including the preparation of your tax return. I read a great quote on Linked-In “If you think it is expensive to hire a professional, wait until you see what an amateur cost you”.
I do not prepare tax returns myself, but if you need a name of a good accountant do not hesitate to give me a call.
Have a great weekend,
Tracey
Source: Original articles posted on Advisor.ca 01-16-17 by Staff, Updated and posted again by Staff 11-19-18, updated 1-4-21, MT01-03-17, MT01-08-21
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