Medical Expenses (July 2017)

You may be able to reduce your medical costs by setting up a medical benefits plan. If you meet the conditions below, your company can reimburse you for 100% of your medical expenses (these include drugs, dental, glasses, therapy).

Conditions:

  • You own a corporation
  • Your family medical expenses are over $1,000 per year
  • You do not belong to a group plan
  • You have no employees (except family members)

Olympia Benefits Inc has set up a plan that is popular with small business owners. Here is a link to additional information: http://www.olympiabenefits.com/partner?10107.

We recommend the Olympia HSA Plus plan.

Ontario Employment Law (June 2017)

Ontario will be implementing significant changes to the employment laws, including:

1) Increasing the minimum wage to $15 on January 1, 2019 ($14 on January 1, 2018)
2) Increasing the vacation entitlement to three weeks for employees with 5 years service

For additional information:

CFIB Commentary
Ontario Newsroom

Federal Budget (2017)

  • Public transit pass credit eliminated June 30, 1017
  • Employment insurance premiums will increase in 2018 to $1.68 (from $1.63) per $100 earnings
  • Professionals can no longer exclude work-in-progress from income (effective for taxation years that begin after March 22, 2017)

Federal Budget (2016)

Individuals
  • a new Canada Child Benefit replaces the Universal Child Care Benefit and Canada Child Tax Benefit in July 2016. This benefit is not taxable.
  • the fitness and art tax credits are reduced by 50% in 2016 and eliminated in 2017
  • the education/textbook tax credit is eliminated in 2017 (the tuition tax credit is still available)
  • the family tax cut is eliminated in 2016
  • the sale of a principal residence must now be reported in order to be tax-free (sales in 2016 +)
  • Home Accessibility Tax Credit – a 15% non-refundable credit on up to $10,000 of home renovation expenses that allow a qualifying individual to gain access or to be more mobile/functional within the dwelling. You must be 65 or older, or are eligible for the Disability Tax Credit. The credit may be claimed by the qualifying individual as well as individuals who may claim such qualifying individuals as dependents. An eligible dwelling is the principal residence of the qualifying individual.
  • Child care deduction limits – for children under 7, the limit will be $8,000 per year. For children 7 to 16, the limit will be $5,000 (effective 2015 +). The deduction is limited to 2/3 of the salary of the lower income parent.
Corporations
  • the small business tax rate will stay at 10.5% for 2016 and subsequent years
  • access to the $500,000 small business rate will be restricted when a company bills another company / partnership for their services and there is common ownership
  • the eligible capital property rules are being replaced effective January 1, 2017. Existing balances will be transferred to CCA class 14.1

Federal Budget (2015)

Minimum RRIF Withdrawals – the amount that an individual must withdraw from their RRIF is being reduced.

Age at beginning of year          New Factor (%)          Old Factor (%)
71                                                        5.28                           7.38
75                                                        5.82                            7.85
80                                                        6.82                            8.75

Foreign Asset Reporting (T1135) – a simplified report will be available to taxpayers if their specified foreign property is between $100,000 and $250,000 throughout the year

Repeated Failure to Report Income Penalty – where a taxpayer fails to report an amount of income in a taxation year and had failed to report an amount of income in any of the three preceding taxation years, the taxpayer is liable to a penalty equal to 10 per cent of the unreported income. The penalty will only be applied if a taxpayer fails to report at least $500 of income.

Small Business Job Credit (2015 & 2016)

Businesses that pay employer EI premiums equal to or less than $15,000 in 2015 and/or 2016 will have the current EI rate of 1.88% reduced to 1.60%. The credit is expected to be worth approximately 39 cents per $100 of insurable earnings. For example, at 2014 rates, the employer EI premiums payable for an employee earning $48,600 or more total $1,279. For 2015 the reduced premium is expected to be $1,089 for a savings of $190. The credit will be automatically administered (no need to apply).