Federal Personal Amounts Increased by 1.4% in 2011

Taxpayers should prepare to file their TD1 Personal Tax Credits Return before the end of December to ensure their withholding taxes on their January pay cheques are correct. Each year certain tax and benefit amounts are indexed to inflation. This year these credits and thresholds have increased by 1.4 %. The link to the form is http://www.cra-arc.gc.ca/E/pbg/tf/td1/README.html

The Basic Personal Amount for 2010 was $10,382 in 2010; it has been increased to $10,527 for 2011, or $877.25 a month. The actual annual dollar equivalent is $1579.05 on the federal side; provincial credits will increase these amounts.

For seniors the following credits are important, and most are indexed for 2011:

• Age Amount: This has risen by $91 to $6537
• Infirm Dependant Amount: An increase of $49 to $4282
• Disability Amount: Up by $102 to $7341
• Caregiver Amount: A $59 increase to $4282
• Pension Amount: Remains at $2000

Canadians are also curious about making claims under the Medical Expense Tax Credit. For 2011, eligible medical expenses in excess of 3% of net income--up to a ceiling of $2052ócan be claimed. This ceiling level has increased by $28 for the 2011 tax year. Medical expenses are claimed in the best 12 month period ending in the tax year.

Unchanged in 2011, the amounts of eligible donations claimable qualify for a federal non-refundable tax credit of 15% for amounts less than $200 and 29% for amounts over $200 to a maximum of 75% of net income. Unused donations can be carried forward for five years. To take advantage of tax savings sooner, best to make donations before year end.

The Distinguished Advisor Workshops (DAW), being held across Canada January 11 to 20 will cover details behind all of these and other important deductions and credits, as well as a thorough review of tax, investment and retirement planning options for 2011. Registrations are excerpted until January 7 for Winnipeg, Calgary, Edmonton, Vancouver, Toronto, Ottawa, Montreal and London venues. (hotlink)

ADDITIONAL EDUCATIONAL RESOURCES: Essential Tax Facts by Evelyn Jacks (hotlink)