Canadian Tax Rules for 2010

Each year millions of Canadians scramble to get their tax papers in order. Each year, many of these same Canadians are scrambling to find out what new tax rules have been introduced as well as what old tax rules have been changed. Many of these changes stem from the federal budget being brought down at the beginning of 2009. These major tax changes can easily affect how much personal tax you will pay and for most people, it pays to know the changes. Here are some of the key changes:

The introduction of the tax-free savings account was unveiled in the 2008 federal budget but one was not able to set it up until 2009. Millions of Canadians have set up their TFSA, making this account widely popular. If you did not contribute last year, you can still do so by adding up to $10,000 this year, which is the equivalent of the $5,000 allowance from 2009 combined with the $5,000 allowance for 2010.

The first time homebuyers tax credit is another measure from the 2009 federal budget. If you purchased your first home after January 27 2009, you may be entitled to the first-time homebuyers credit. You can find this claim on line 369 of Schedule 1.

Another 2009 budget adjustment was a boost in the RRSP homebuyers plan. If you are looking to purchase a house, the maximum amount you can withdraw from your RRSP tax-free was increased to $25,000 from the old $20,000 limit.

The new home renovation tax credit has been the most talked about addition from the 2009 federal budget. Canada Revenue Agency counts that more than 3.5 million Canadians inquired about the new program last year alone. The home renovation tax credit is applicable if you spent between $1,000 and $10,000 on qualifying home renovations from January 27, 2009 to February 1, 2010. This new program makes it possible to claim up to $1,350 in credits.

A few other tax rule alterations for the 2009 season are changes to the loyalty rewards program. CRA has removed the tax rule for employees who charge work related expenses to their personal credit cards to earn frequent flyer points. Overtime meals and allowances worth up to $17 will now be considered tax-free, with a few conditions. As well, the Registered disability savings plan was created in 2008 but put into play in 2009 that was designed to help parents provide financial security for people with disabilities. If you find yourself in need of some extra money to either make contributions to lower your taxes payable or to consolidate existing debt, a private bad credit or car title loan could be of help.


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