HTK Consulting Blog


Check out our blogs for the latest news in today's accounting industry. Please see below for our latest posts. Don't forget to share if you find our articles useful!

Summary of 2013 Federal Budget Proposals

Posted: July 29, 2013

Changes Affecting Individuals

Lifetime Capital Gains Exemption (LCGE)

  • Proposal to increase the Lifetime Capital Gains Exemption (LCGE) by $50,000 (from $750,000 to $800,000) effective for the 2014 tax year

First-Time Donor’s Super Credit (FDTC)

  • Currently under the income tax rules, an individual can claim a non-refundable charitable donations tax credit (CDTC) equal to 15% * the first $200 of charitable donations + 29% * the portion of the donations that exceeds $200
  • Starting in the 2013 taxation year, the budget proposes to supplement the CDTC by adding another 25% to the CDTC rates for up to $1,000 of CASH DONATIONS made by first-time donors
  • An individual is considered a first-time donor if neither the individual nor the individual’s spouse or common-law partner has claimed the CDTC or FDTC in any of the five preceding tax years (i.e. an individual will be considered a first-time donor for the 2013 tax year if he or she did not claim the CDTC for any years after 2007)
  • The FDTC can be shared between spouses and common-law partners; however, the total amount an individual can claim cannot exceed the $1000 in cash donations
    • i.e. suppose a wife made $1000 in donations and husband made $400, and assume the couple are considered first-time donors. The wife can only transfer $600 worth of donations to the husband for FDTC purposes, and must claim the remaining $400 on her own T1)
    • the $1000 claimed by the husband is eligible for the additional 25% supplement
    • The $400 claimed by the wife is also eligible for the 25% supplement
  • The FDTC supplement will in essence make the first $200 of cash donations eligible for a credit of 40% (15%+25%) and the remainder 54% (29%+25%)
  • The FDTC is available for donations made on or after March 21, 2013 and can only be used once between the taxation years 2013 to 2017

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TFSA: Frequently Asked Questions

Posted: March 1, 2013

With the TFSA entering its fifth year, it is becoming a very popular investment vehicle for many Canadians. Here are some of the most frequently asked questions that we have faced regarding TFSA.

Can I set up more than one TFSA Account? (LCGE)

You can open up however many TFSA accounts as you desire. However, the total of all the contributions you make to the different TFSA accounts must be within the total contribution limit as highlighted in our previous post titled “TFSA Benefits and Pitfalls”

What happens if I didn’t keep track and I over contributed to my TFSA?

There will be a monthly penalty of 1% per month on your excess contributions. This is why we recommend you check your unused contribution room before contributing

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TFSA Benefits and Pitfalls

Posted: March 1, 2013

The 2013 annual contribution limit has been increased to $5,500 from $5,000. If you never set up a TFSA account yet, you can potentially contribute upwards of $25,500 and insure that it grows on a tax free basis. If you are currently saving money outside of a TFSA, consider setting up a TFSA; you have nothing to lose!

If you want to learn more about the TFSA and how it works click here

Why Should I Open a TFSA Account?

1. Tax Free Income – your money grows on a tax free basis

  • Suppose I put away $20,000 in my TFSA in 2013, and suppose by the year 2020 my money grew to $40,000, I can withdraw the full $40,000 tax free
  • The after tax-returns of an investment held in a TFSA will be higher than if it were held outside of a TFSA

2. Withdrawals can be re-contributed !

Using my example above, my TFSA will allow me to re-contribute the $40,000 I just pulled in the following year (i.e. in 2021)

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