But confusion on tax issues is rampant as Canadians head to the polls
TORONTO, Oct. 14, 2015 /CNW/ - Among the many issues being debated during the Federal election campaign, making sense of the various parties' tax platforms and the implications on personal taxes is what will drive Canadian voting decisions.
While studies from H&R Block have previously shown widespread confusion about personal tax topics ranging from marital status filings to TFSAs, personal tax implications still carry significant weight when it comes to influencing Canadians on Election Day. According to a recent survey* of Canadian consumers of voting age, 70% said that personal tax implications influence their vote, with nearly one in three indicating it was a primary factor (28%).
To help address the persistent confusion around taxes, H&R Block points to some of the key tax-related issues proposed by the various parties that would impact Canadians' personal tax situations, including:
- TFSAs: Both the NDP and the Liberals are proposing to roll back the TFSA maximum annual contributions limits from $10,000 to $5,500 after the Conservatives increased the limits from $5,500 to $10,000 this year. Canadians should understand that TFSA's are a critical part of long-term tax planning, especially for young Canadians who are just starting out.
- Marginal Tax Income Brackets: The Liberals are proposing to reduce the 22% tax rate on taxable income between $44,701 and $89,401 to 20.5%, and are also proposing a new tax bracket of 33% on income in excess of $200 000. Marginal tax brackets tend to be confusing to a lot of Canadians. But, using the CRA's Schedule 1 form and some simple math, Canadians can calculate the real dollar value of these savings and see how they would be impacted.
- Family Tax Cut: The NDP and the Liberals are proposing to eliminate the Family Tax Cut, the Conservatives' policy that allows couples with children under 18 to transfer income for tax purposes up to a maximum savings of $2,000. A common misperception is that this is income-splitting. In actuality, while the program is based on income splitting, the benefits of the credits largely depend on the tax brackets of each spouse.
- Seniors Tax Credit: The Conservatives plan to introduce a Single Seniors Tax Credit, allowing single seniors to claim a non-refundable tax credit in respect of an additional $2,000 of pension income. While there are typically more credits available to families than individuals, there are more credits for individuals than people realize.
- Small Business Tax Rates: Both the Conservatives and the NDP are proposing to lower small business tax rates which can directly benefit families across Canada since many small businesses are family-owned.
- RRSP Homebuyers' Plan: The Conservatives want to increase the amount that can be withdrawn under the plan from $25,000 to $35,000, while the Liberals are proposing to allow access more than once as individuals and families experience life changes. Both are ways to make buying a home more accessible to Canadians, especially at a time when home prices are soaring across Canada.
"Canadian consumers are right to be concerned about how proposed tax platforms will impact their personal taxes," said Caroline Battista, senior tax analyst, H&R Block Canada. "Personal taxes are complicated enough with the rules changing constantly, especially during an election year. On top of that, everyone's situation in Canada is unique, based on his or her deductions and qualified credits. So, it's important that Canadians pay attention to these proposals and understand how the election's outcome will impact their personal filing situation."
Consumers are encouraged to learn more about these tax programs and their potential impact by visiting H&R Block's Tax Talk Blog or getting in touch via phone, email or at any one of its retail locations across Canada.
About H&R Block Canada
H&R Block Canada is the leading tax preparation firm in the country, with more than 50 years of Canadian tax return experience. Headquartered in Calgary, Alberta, the company serves Canadian taxpayers in 1,200 offices across the country. H&R Block Canada, Inc. is a subsidiary of H&R Block, Inc., a diversified company with subsidiaries providing a wide range of financial products and services. Additional information about H&R Block Canada is available at 1-800-HRBLOCK or visit www.hrblock.ca.
*About the Survey
From October 7th to October 8th, 2015 an online survey was conducted among 1,506 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 2.5%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec, language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.
SOURCE H&R Block Canada Inc.
For further information: Miriam Sherkey, Ketchum Public Relations, 416-355-7410, [email protected]