Every year the Income Tax Act gets bigger (currently over 2,700 pages) and the personal T1 Return gets more complicated. The current Liberal government has announced their intention to simplify the Act by eliminating tax credits. Bill Curry from the Globe and Mail recently published an article discussing this plan.
It’s true that by eliminating the Child credit, Family Tax Cut (income splitting), the Child Fitness and Arts credits, and Textbook and Education credits, the government has made the tax return simpler – but it also means that people who had been benefiting from those credits are now paying more taxes.
They have not announced which credits are on the chopping block but here are a few possibilities. Which of these federal credits do you think we don’t need?
- Age amount – taxpayers over 65 can save up to $1,055
- Volunteer firefighter amount – worth $450 to volunteer firefighters or search and rescue personnel
- Public transit amount – Calgary Transit passes cost $99 per month, so a family with two riders could save $356
- Adoption expenses – up to $15,255 in expenses, giving a tax savings of $2,288
- Caregiver amount and amount for infirm dependants – up to $1,005 for people taking care of a family member in need
- Home buyer’s amount – first-time home buyers can save up to $750 in taxes
- Canada employment amount – anyone with a job in Canada gets $172 in tax savings
- Pension amount – up to $300 in credits if you are receiving qualifying registered pension income
- Medical expenses
- Charitable donations
- Student loan interest credit
- Tuition amount
I’m sure some of those credits hit home pretty hard, while others don’t really mean a thing to you. The thing to remember is when the government “increases revenue” in order to balance the budget, someone is paying for it.