Each year, the CRA makes changes that have the ability to impact your Canadian tax filing. While changes some years can be minimal, it’s important to be aware of them, because they may still impact your individual tax situation.
See What This Year’s CRA Updates Mean For Your Tax Return, It’s still early in the year, so make sure you stay tuned to the blog from the TurboTax for any further updates, tips and information to help you have the best tax year yet!.
Canadian Tax Changes for 2020
Basic Personal Amounts (Federal)
The basic personal amount was $12,069 in 2019 and has been increased to $13,229 for 2020; what this means is that a taxpayer can earn up to this amount before paying any federal income tax. As per the Liberal election platform proposal, we could see this amount increase over the next few years to $15,000 by 2023, if approved.
Tax-free Savings Accounts (TFSAs)
The Registered Plans Directorate announced the amount Canadians will be able to put into their TFSA remains at $6,000 for 2020, as it was for 2019. If you have not been maximizing your contributions over the years, make sure to check your CRA My Account for your own personal contribution balance limit.
Income Tax Brackets
Canadian income tax rates vary according to the amount of income you earn, and you pay different rates on different portions of your income. This is a marginal tax rate system. Our tax brackets change each year, usually with inflation. This year it increased by 1.9%. For the current and previous tax rates, check out our current overview. Stay tuned for updates each year.
Digital News Subscriptions Tax Credit
This has now reached Royal Assent. This tax credit is a non-refundable tax credit for payments for qualifying subscriptions, paid by individuals, for tax years 2020 to 2024. Stay tuned for more information.
The new maximum contribution amount for 2020 is $27,230. If you have not been maximizing your contributions year over year, check your My Account for your current available contribution balance.
CPP Contribution Rates
Effective 2019 we saw the introduction of the CPP Enhancement. Over a 5 year period, the CPP contribution rate will be increasing to 5.95%. For 2020, the CPP contribution rate is 5.25%.
Home Buyers’ Tax Credit (HBTC) & Home Buyers’ Plan (HBP)
In 2019 the HBP withdrawal limit increased from $25,000 to $35,000, for withdrawals made after March 19, 2019.
New homeowners qualify for the $5,000 first-time HBTC if they or their partner have purchased a home in the tax year, and did not live in another home owned by either of them in the four years before the purchase.
With more than 20 years’ experience helping Canadians file their taxes confidently and get all the money they deserve, TurboTax products, including TurboTax Free, are available at TurboTax.
this post originally appeared on Turbotax.com