Personal Tax Highlights

JOHN A.M. NORRIS
CHARTERED ACCOUNTANT
EXPLORE AND DISCOVER THE ON-LINE BUSINESS CONNECTION TO ONTARIO'S WEST COAST

BUSINESS INCOME:

Health Plan Premiums for the Self-Employed: Under certain conditions self-employed individuals will now be able to deduct health and dental premiums made to a private health services plan (PHSP)

Meal Expenses at Golf Course: Meals and beverages consumed at a golf club will now be treated the same a meals and beverages consumed elsewhere (50% tax deductible)

Meal Expenses: Expenses incurred for meals and entertainment for ALL employees to a maximum of six special events are fully deductible

Construction: Revenue Canada is requiring businesses in the construction industry to annually report in detail all payments made for construction services. A Contract Payment Reporting Information Return will be required to be completed with the first one being due March 21, 2000. The reporting period can be either on the calendar or fiscal period basis. The only reporting exemption is for construction services with an aggregate of less than $500 for the year.

EMPLOYMENT INCOME:

Moving Costs: Certain maintenance costs on a former vacant residence can be included in the moving cost calculation

Relocation Expenses: Certain relocation expenses reimbursed or compensated for by the employer will now be taxable benefits to the employee

Employee/Relocation Loans: All employee loans are subject to the interest provisions of the Income Tax Act which may create a taxable benefit to the employee

Volunteer Tax Relief: Volunteer firefighters and other volunteers who help in disasters and emergencies will receive a $1,000 tax exemption

INVESTMENT INCOME:

RRSPs and Lifelong Learning: Tax-free withdrawals from an RRSP to finance full-time education or training for you or your spouse is available to Canadian-resident taxpayers

OTHER INCOME:

Lump Sum Payments: Individuals who receive amounts in excess of $3,000 in 1995 and subsequent years and the amounts should have been included in previous years' income may be allowed to compute tax using a special method if advantageous to the individual. Qualifying payments include: termination income, amount received under a court judgement, arbitration award or settlement in a lawsuit, non-periodic pension or superannuation benefits, spousal or child support, employment insurance benefits, and other prescribed amounts. The payor must report the year the amounts should have been paid. Revenue Canada will calculate and use the most advantageous method. Prior years will not be reassessed.

PERSONAL DEDUCTIONS:

Child Care Expenses: Increase to $7,000 for disabled children and children under 7 years of age, $4,000 for all other eligible children

Part-time Students: Part-time students may benefit from child care expenses for themselves or their spouse including qualified programs at a secondary school level

TAX CREDITS:

Credit Increased: 1999 personal tax credit is increased from $6,546 to $6,794. 1999 spousal tax credit and equivalent-to-spouse tax credit is increased from $5,380 to $5,718. The supplemental increase for low income earners is reduced for 1999 to $250 from $500.

3% Surtax: The 3% surtax is reduced by 1/2 for 1999 and eliminated for 2000.

Part-time Students: Part-time students may claim the education tax credit and child care expenses in addition to the tuition credit

Student Loans: Interest paid on new and outstanding eligible student loans may now be claimed as a 17% non-refundable tax credit

Caregiver Tax Credit: A caregiver tax credit is available for individuals who provide in-home care to a dependent (mental or physical infirmity) parent or grandparent (65 or older)

INCOME SPLITTING:

Registered Education Savings Plans: Annual maximum is $4,000 with a lifetime limit of $42,000

Canada Education Savings Grant: There is a Canadian Education Savings Grant (CESG) for contributions to a RESP (20% of contribution to lifetime maximum of $7,200)

Information provided is very brief and is not complete. Action should not be taken without further research of the details as matched to your specific situation. We would be pleased to discuss the above in greater detail and assist you in your personal situation. If you wish to read about the above in more detail first, please pick up a copy of "The Personal Tax Planner Guide" in our office