It’s that time of year again, where Canadians must file their personal income tax returns for the 2009 year by no later than April 30, 2010. There have been several new tax breaks for the 2009 year that you should know about. These new tax breaks will increase your tax refund!
#1. Basic Personal Amount
The basic personal amount has increased to $10,320. This means that the first $10,320 of income is exempt from tax.
#2. Spouse or Common-Law Partner Amount
The spouse or common law partner amount has increased to $10,320. This tax credit is available to the higher income spouse / common law partner. However, it is reduced by the net income of your spouse / common law partner. For example, if your spouse has a net income of $3,000, then the spouse amount available to you to claim as a credit is $7,320.
#3. Home Renovation Tax Credit
You can claim a tax credit for renovations made to your home. The tax credit applies to renovations made after January 27, 2009 that are in excess of $1,000 to a maximum of $10,000. You should consult your Chartered Accountant in Toronto to see whether you are eligible for this tax credit.
#4. Home Buyers Plan
The maximum amount that you can take out of your RSP’s tax free to purchase a home has been increased to $25,000 for the 2009 year. This tax incentive is know as the home buyer’s plan. However, you must repay the entire amount that you initially withdrew to your RSP over a period of time. The annual repayment is equal to 1/15th of the amount initially withdrawn. You do not have to make a repayment in the year of withdrawal nor the following year.
#5. First Time Home Buyer’s Tax Credit
The first time home buyer’s tax credit of $5,000 is available to first time home buyers that intend to live in the home that they purchase. The credit is only available for homes purchased after January 27, 2009.