It's that time of year again! Here are the main changes you need to know about to maximize your 2022 federal income tax preparation. Quebec changes will appear in a separate article.
The federal basic personal amount (the amount on which Canadians pay no tax) is increasing to $14,398 from $13,808.
New federal tax brackets: The lowest federal bracket has increased to $50,197 from $49,020. This means that if you earned $50,000 in 2021 and the same amount in 2022, you will be effectively given a tax cut!
Here are the remaining bracket changes and their respective rates:
- over $50,197 up to $100,392: 20.5%
- over $100,392 up to $155,625: 26.0%
- over $155,625 up to $221,708 29.4%
- over $221,708 33.0%
New RRSP limit: Your RRSP contribution limit is equal to 18% of your previous year's earned income up to a yearly maximum. This year that RRSP annual dollar limit is $29,210.
New TFSA limits: The TFSA contribution limit has increased to $6,500 for the year. For eligible Canadians, the cumulative total you can have in your TFSA is now $81,500.
New OAS limit amounts: As of July 2022, the CRA’s new Affordability Plan provides seniors aged 75 and over with a 10% increase in their Old Age Security pension. If your taxable income is over $81,761 for the 2022 tax year, your OAS will be reduced. If your taxable income is over $134,626, your OAS payments will be eliminated completely.
Home Accessibility Tax Credit (HATC): If you’re 65 or older, are eligible for the disability tax credit, and have remodeled your home for safer access, you can claim up to $20,000 of your related HATC expenses.
Don't forget the deadline for filing: April 30th, 2023. Returns with a balance owing and filed after the deadline are subject to a 1% penalty and interest.
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