Individual Tax Credits That You Can Claim in 2014

For Canadians in 2014, there will be some changes to three existing tax credits. This includes the lifetime capital gains exemption, the adoption expense tax credit and the hiring credit for small businesses. This also includes the introduction of the first time donor’s super credit.

Did you know that every year millions of dollars in tax credits go completely unclaimed? This is because the average Canadian is generally not aware of the credits he or she can claim. Hi, my name is Allan Madan, your trusted accountant, and in this article about personal tax credits for 2014, I will discuss changes to existing tax credits and deductions as well as introduce a completely new tax credit for the 2013, and subsequent tax years.

Lifetime Capital Gains Exemption:

The first major change when it comes to personal tax credits for 2014 is to the lifetime capital gains exemption. Among the many ways that Canada’s tax system supports small business owners is through the lifetime capital gains exemption. The lifetime capital gains exemption means that when you, as a small business owner, sell your shares, you do not have to pay tax on the gain up to a certain limit.

Starting in 2014, the lifetime capital gains exemption will increase from $750,000 to $800,000. In addition, future increases to the lifetime capital gains exemption, for the first time ever, will be indexed to inflation.

Adoption Expense Tax Credit:

The second change to personal tax credits for this year is to the adoption expense tax credit. The adoption expense tax credit is a non-refundable tax credit equal to 15% of the adoption expenses that you incur for adopting a child below 18. The time period for claiming the adoption expense tax credit starts from the time that you, as a parent, are matched with a potential child to adopt, and ends at the time the child is permanently placed in your home.

The major change to this credit is to the adoption period, so early adoption expenses can be claimed for the purposes of this credit. The adoption period now starts at the earlier of: the time the adoptive parent makes an application to register with a ministry responsible for adoptions; at the time when an application is made with an agency licensed by the provincial government; or the time that an adoption related application is made to a Canadian court.

Hiring Credit for Small Businesses:

The third change to individual tax credits for 2014 is to the hiring credit for small businesses for the 2013 tax year. The hiring credit is up to $1,000. Now, it’s only available for small businesses that have employment insurance premiums of less than $15,000 in the 2012 year. This hiring credit provides much needed relief to small business owners to reduce their labour costs.

First Time Donor’s Super Tax Credit:

For 2014, there is a new personal tax credit that you can claim. This is a new tax credit on top of the existing donation’s tax credit for first time donors. This new tax credit has increased the donation tax credit by 25% for the first $1,000 donation that you make. Once the 25% increase is factored in you will receive a whopping 40% tax credit for the first $200 of donations made as a first time donor, and 54% on donations made from $200 to $1,000. This tax credit has an expiry date of 2017, so please make sure you take advantage of it before it’s too late.

Thank you for reading. I hope you found this article about personal tax credits for 2014 useful. Please comment and subscribe; it helps me produce better articles for you. Also, get access to your free report, ‘20 Tax Secrets on How to Beat the Tax Man’, when you visit my website.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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