Check out some significant changes that may affect your tax returns for 2019 and 2020.
What’s New??
Planning to Retire?
Maximum pensionable earnings increased for The Canada Pension Plan (CPP) in 2020 to $58,700 up from $57,400 in 2019
Do You Own a Small Business?
The tax rate dropped to 9% on the first $5OOK of income compared to 10% in 2018.
New CPP Contribution Rates
Employer and Employee: 5.25%
Self-Employed: 10.5%
Does Your Business Generate Passive Income?
If you make more than $50K the 9% tax rate may not apply.
Maximum Yearly CPP Contributions in 2020
Employer and Employee: $2,898
Self-Employed: $5,796
Note: This money is still taxed as income!
Common Small Business Deductions:
• Home Office Expenses (can include interest on your mortgage)
• Vehicle Expenses
• Accounting and Legal Fees
• Reserves or “Sinking Fund” (for reasonable amounts)
• Office Rent
Retirement Account Contributions Can Roll Over
If you didn’t max out your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) contributions in 2019, the Canada Revenue Agency (CRA) lets
you add the difference onto next year’s contribution.
Need a professional to help you get started on your taxes? Call me for a great referral!
If you’re considering a move, or purchasing a home in the Guelph area, or would just like to chat about the market, call me at 519-824-9050 ext. 235 or contact me here:
CONNECT WITH FRANCES:
DON’T FORGET TO SUBSCRIBE HERE on YOUTUBE
