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The
budget did not include major tax savings, but Finance
Minister James Flaherty did announce several small
changes, updates and future opportunities, including:
Contributions
to registered education savings plans would be permitted
for up to 31 years instead of 21, and for 35 years for
those with severe disabilities. Also beginning this year,
RESP education assistance payments would be permitted for
up to six months after the beneficiary completes an
eligible program, provided the student qualified for the
payment before graduating.
Rules
for claiming business use of vehicles would be simplified.
Instead of having to log every trip for an entire year,
records for a representative period would be sufficient in
2009. The requirement for logbooks has been a major gripe
for small business owners.
The
tax credit for medical expenses would be expanded to
include devices to assist with speech disorders, mobility,
standing and balance, and for the cost of buying, training
and caring for service dogs for those with autism or
epilepsy.
The
government plans to end any ambiguity about claiming a
credit for the cost of medication that is not prescribed
by a medical practitioner or dentist and not recorded by a
pharmacist. Some recent court rulings had allowed claims
for vitamins, supplements and non-prescription drugs.
New
registered disability savings plans announced in last
year's budget are to finally become available this year.
An
exemption from tax on capital gains when shares are
donated to charities would be expanded to include publicly
traded securities received after the budget in exchange
for unlisted securities, such as partnership interests.The
tax credit for dividend income would be adjusted as taxes
on corporations are reduced. Nancy Belo Gomes of KPMG LLP
calculates the highest personal tax rate on dividend
income will rise from 14.55 per cent today to 15.88 per
cent in 2010, 17.72 per cent in 2011 and 19.29 per cent in
2012, assuming the top federal tax rate on other income
remains at 29 per cent.
GST
tax exemptions would be expanded to include more health
and education services for disabilities and disorders such
as autism, private nursing, additional prescription drugs
and medical and assistive devices, as well as for the
construction of buildings for long-term residential care.
Low-income
seniors would be able to earn up to $3,500 a year instead
of $2,500 before the government starts to reduce their
guaranteed income supplement to the Old Age Security
pension by 20 per cent of the income they earn by working.
There is a 50 per cent reduction for income from savings
that would not apply to withdrawals or investment earnings
from the proposed new tax-free savings accounts.
Former
members of pension plans regulated by Ottawa, such as
workers in the civil service and banking, transportation
and telecommunications industries, would have increased
access to money locked into life income funds.
Source
: Toronto Star - Ontario, Canada, dated
28/02/2008
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