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What You Need To Know Before You File Your 2016 Income Tax Return

Tax Filing Deadline 2017

You must file your 2017 tax return by April 30th… sort of.

Scott_Klein_Millards_Brantford

Scott Klein
CPA, CA, LPA,Partner
Millards Chartered Professional Accountants

Scott Klein, CPA, CA, LPA and Partner at Millards Chartered Professional Accountants in Brantford says while the technical filing deadline this year is last day of April, the Canadian Revenue Agency will accept returns the following day.

“Most Canadian income tax and benefit returns for 2016 are due on April 30th, 2017. However, as this date falls on Sunday this year, the CRA will consider your return filed on time and your payment made on time if they receive it by midnight on May 1, 2017, or if it is postmarked May 1, 2017.”

Klein points out that there are a few exceptions to the filing deadline.

“If you or your spouse or common-law partner is self-employed, you have until June 15, 2017 to file your income tax and benefit returns. However, if you have a balance owing for 2016, you have to pay it on or before April 30, 2017.”

There may be penalties for filing late and people receiving certain types of benefits may endanger the timely dispersal of their benefits if they file past the deadline.

“If you receive a Canada child benefit, a GST/HST credit or a child disability benefit payment, be sure to file your income tax and benefit return on time or you could experience interruptions in your payments.”

So what’s new this tax season? Here’s an overview of the biggest changes for 2016.

Individuals and families

Canada child benefit (CCB)

As of July 2016, the CRA has replaced the Canada child tax benefit (CCTB), the national child benefit supplement (NCBS), and the universal child care benefit (UCCB). For more information see Canada child benefit.

Children’s arts amount

The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $250. Both will be eliminated for 2017 and later years.

Home accessibility expenses

You can claim a maximum of $10,000 for eligible expenses you incurred for work done or goods acquired for an eligible dwelling.

Family tax cut

The family tax cut has been eliminated for 2016 and later years.

Children’s fitness tax credit

The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $500. Both will be eliminated for 2017 and later tax years.

Eligible educator school supply tax credit

If you were an eligible educator, you can claim up to $1,000 for eligible teaching supplies expenses.

Interest and investments

Tax-free savings account (TFSA)

The amount that you could contribute to your TFSA in 2016 was $5,500, and remains $5,500 for 2017.

Dividend tax credit (DTC)

The rate that applies to “other than eligible dividends” has changed for 2016 and later tax years.

Investment tax credit

Eligibility for the mineral exploration tax credit has been extended for flow-through share agreements entered into before April 2017.

Labour-sponsored funds tax credit

The tax credit for the purchase of shares of provincially or territorially registered labour-sponsored venture capital corporations has been restored to 15% for 2016 and later tax years. The tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations has decreased to 5% and will be eliminated for 2017 and later tax years.

Other changes

Tax on taxable income

The tax rates and income levels have changed. As a result of this change the donations and gifts tax credit calculation has changed. For more information see Donations and Gifts on the CRA website.

Split income of a child under 18

The tax rate on split income received by a child under 18 has increased to 33%.

Sale of principal residence

The sale of a principal residence must now be reported, along with any principal residence designation. Under proposed changes, the CRA will be able to accept a late designation in certain circumstances, but a penalty may apply. Go to Reporting the sale of your principal residence for individuals (other than trusts) and select question 7 for more information.

Reassessment period

Under proposed legislation, for tax years that end after October 2, 2016, the CRA may at any time reassess your income tax return if you fail to report a sale or other disposition of real estate.

Do you have a tax filing challenge or a question about the tax code changes? Let Millards Chartered Professional Accountants ensure that you’re meeting the requirements of the CRA and maximizing your tax advantages.

For over 20 years, Scott Klein has been assisting clients with bringing clarity to accounting requirements, personal and corporate tax filings and tax planning. His practice areas include Accounting & Auditing Services, Corporate & Personal Tax Services along with Estate Planning.

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