Tax filing season is right around the corner and lets look at important changes
- The Basic Personal Amount (BPA) has been increased to 14 398$
- You can claim up to $500 for work-from-home expenses, the same al last year. Detailed method( all expenses related ) or flat rate 2$ per day.
- Tax brackets have shifted to account for inflation The government has adjusted tax brackets for 2022 to maintain buying power for Canadians as prices of goods continue to slowly increase.
The new federal tax brackets for 2022 are as follows:
$0 to $50,197 of income (15%)
More than $50,197 to $100,392 (20.5%)
More than $100,392 to $155,625 (26%)
More than $155,625 to $221,708 (29%)
$221,708.01 and higher (33%)
- The TFSA limit remains unchanged. The TFSA contribution limit will remain at $6,000 for the year.
- New OAS limit amounts. The OAS is designed to provide retirees with a source of income to support their retirement.
For the 2022 tax year, if your taxable income was over $81,761, you would need to repay some of your OAS. Similarly, if your taxable income was over $134,626, you would not have received any OAS payments. Thanks to the CRA’s new Affordability Plan, seniors aged 75 and over received an automatic 10% increase of their Old Age Security pension, as of July 2022.
- Canada Pension Plan maximum contributions have been increased.
2.7% and the maximum pensionable earnings are $64,900, with a basic exemption of $3,500 for 2022.
CPP- Employee and employer maximum contribution is $3,039.30;
QPP is $3,315.60.QPP will provide future retirees with an increase in their pension premiums from 25% to 33.33%.
Self-employed individuals must pay for both the employer and the employee contribution.
For 2022, their maximum contribution amount for the CPP is $6,078.60 and for the QPP it is $6,999.60.
- RRSP dollar limit is increased. The RRSP annual dollar limit for tax year 2022 is $29,210.
Remember that your RRSP contribution limit is capped at 18% of your earned income in the previous year. Limit for over contributions is 2000$.
- Repaying COVID-19 benefits.
If you received COVID-19 benefits from the CRA in 2022, such as the Canada Recovery Benefit (CRB), Canada Sickness Recovery Benefit (CSRB),Canada Recovery Caregiving Benefit (CRCB) you will receive a T4A slip with the relevant information you need for your tax return.
If you received the CRB and your net income after certain adjustments is more than $38,000, then you may have to repay all or part of the benefits you received in 2022.
If in 2022 you have already repaid all or part of COVID-19 benefits received, you can choose which year to claim the tax deduction for the repayment on, either the year you received the benefit, or the year you repaid it.
Plus, any one-time provincial payments to help you through COVID-19 will not be taxable, and you don’t need to report them as income on your 2022 tax return.
PROVINCE CHANGES
Ontario
- Ontario Seniors Care at Home Tax Credit is a refundable personal income tax credit to help seniors with eligible medical expenses, including expenses that support aging at home. The credit is equal to 25% of your eligible medical expenses up to $6,000, for a maximum credit of $1,500.
- Senior Home Safety Tax Credit is a new credit that supports seniors in making their homes safer and more accessible, with a credit of 25% up to a maximum of $10,000 in eligible expenses for a maximum credit of $2,500 per year.
- Ontario Staycation Credit: is a one time tax credit for Ontarians who will be able to claim 20% of their stay in an Ontario hotel, cottage,campground during 2022 up to $1,000 individually or $2,000 as a family.
Nova Scotia
- Children Sports and Art Tax Credit is a new $500 credit to help cover the costs of registering in sports and the arts for kids under 19 years old in 2022.
- Rebate for Fertility Treatments and Surrogacy related medical expense is a refundable tax credit equal to 40 % of the cost of fertility treatments and surrogacy-related medical expenses. Treatment must take place in Nova Scotia by a qualified medical practitioner or clinic.
Follow us for more adjustments for 2022 on our website www.deklaration.ca
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