From: AlanBaggett@volcanomail.com   
      
   A new year, a new set of tax numbers : CRA SOTW   
      
   Jamie Golombek | Jan 5, 2013 7:00 AM ET | Last Updated: Jan 3, 2013 12:41 PM ET   
      
   Welcome to 2013 and a new, indexed set of tax numbers.   
      
   Each year, nearly all personal income tax and benefit amounts are indexed to   
   inflation, effective January 1. Some increases, however, such as increases to   
   the Canada child tax benefit and the GST/HST credit only take effect on July   
   1, which coincides    
   with the start of the program year for payment of these benefits. That’s   
   because these benefits are income-tested based on the prior year’s net income   
   as reported on your tax return, which is generally assessed by that date.   
      
   The indexation increase for 2013 is 2%. Here are some of the new numbers for   
   this year:   
      
   2013 federal tax brackets   
   We have four federal tax brackets: zero to $43,561 (15%), $43,561 to $87,123   
   (22%), $87,123 to $135,054 (26%), with anything above that being taxed at 29%.   
   Each province (other than Alberta which has a 10% flat provincial tax) also   
   has its own set of provincial tax brackets, which have been also been indexed   
   to inflation, but at the appropriate provincial indexation factors.   
      
   Basic personal amount   
   The federal basic personal amount for 2013 is $11,038. This basic personal   
   amount, along with all other amounts, is eligible for a non-refundable tax   
   credit. The amounts are “non-refundable” as you cannot generate a tax refund   
   as a result of claiming    
   these credits; rather, the credits can only be used to reduce taxes otherwise   
   payable.   
   All non-refundable credit amounts other than the two-tiered donation credit   
   are calculated at the lowest federal bracket rate, which is 15%. So, for   
   example, for 2013, the basic personal amount is worth $1,656 ($11,038 X 15%)   
   in reduced federal tax.   
   This also means that if an individual’s total income is under $11,038 in 2013,   
   they will not pay any federal tax since the tax rate of 15% is equal to the   
   credit rate.   
      
   Canada Pension Plan   
   While CPP rates themselves aren’t changing (4.95% for employees and double   
   that if you’re self-employed), the maximum pensionable earnings for 2013 has   
   been set at $51,100, which is up $1,000 from 2012. The new ceiling is   
   calculated according to a    
   legislated formula that takes into account the growth in average weekly wages   
   and salaries in Canada. If you earn more than $51,100 in 2013, no additional   
   CPP contributions are required.   
   The new maximum employer and employee contribution to the plan for 2013 is up   
   slightly to $2,356, and the maximum self-employed contribution is double that   
   or $4,712.   
      
   2013 TFSA Contribution Limit   
   Finally, you’ll recall that the new 2013 TFSA contribution limit is now   
   $5,500, as announced late last year. This increase from the prior four years’   
   annual contribution limit of $5,000 is also as a result of inflation indexing,   
   but to keep the annual    
   limits easy to remember, the government legislated that the annual limit would   
   be rounded to the nearest $500.   
      
   If you’ve yet to open up your first TFSA, due to the unlimited carryforward   
   associated with TFSA contribution room, you can now contribute a total of   
   $25,500 to your TFSA, provided you were at least 18 in 2009.   
      
   Jamie Golombek is the managing director, tax & estate planning with CIBC   
   Private Wealth Management in Toronto.   
      
      
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