Most Canadian voters are concerned about how their personal taxes will be affected by the results of the federal election, says an H&R Block survey.
Out of those polled, 70% say personal tax implications will influence their vote, while 28% say they’ll make a decision based primarily on each party’s tax promises.
“Everyone’s situation in Canada is unique, based on his or her deductions and qualified credits,” says Caroline Battista, senior tax analyst for H&R Block Canada. “So it’s important that [people] pay attention to tax proposals, as well as understand how the election’s outcome will impact their personal filing situations.”
To help clients understand key tax-related proposals by each of the parties, discuss the following topics.
TFSAs. Both the NDP and the Liberals are proposing to roll back the TFSA maximum annual contributions limits from $10,000 to $5,500. Canadians should understand that TFSAs can be part of long-term tax planning.
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%. They’re also proposing a new tax bracket of 33% on income in excess of $200,000. Meanwhile, the Conservatives and NDP haven’t proposed to alter personal tax rates.
Family Tax Cut. The NDP and the Liberals are proposing to eliminate the Family Tax Cut, which is the program that allows couples with children under 18 to transfer income to lower-income spouses. The program is based on the idea of income splitting, says the survey, but the benefit of the credit depends on the tax brackets of each spouse.
Seniors Tax Credit. The Conservatives plan to introduce a Single Seniors Tax Credit, which would allow single seniors to claim a non-refundable credit in respect of an additional $2,000 of pension income.
Small Business Tax Rates. Both the Conservatives and NDP are proposing to lower small business tax rates, which could directly benefit families who own small businesses. The Liberals, meanwhile, have only said they want to support the growth of small businesses.
RRSP Homebuyers’ Plan. The Conservatives want to increase the amount that can be withdrawn under the homebuyers’ plan from $25,000 to $35,000, while the Liberals are proposing to allow access to that plan more than once. Both are ways to make buying a home more accessible to Canadians, says the survey.
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