Home Renovation Tax Credit (HRTC) part 2

Here is a summary of the important features of the Home Renovation Tax Credit:

• This is a non-refundable & temporary tax credit valid for the 2009 tax year only.
• The tax credit is 15% of eligible expenditures on home renovations made on eligible dwellings
•  The tax credit applies to expenditures over $1,000 to $10,000
• The maximum tax credit amount is $1,350 per family ($9000 x 15%)

We’ll get into more detail on my next blog!

Sources:  www.cra-arc.gc.ca and www.taxtips.ca

Home Renovation Tax Credit (HRTC)

One of the highlights of the 2009 tax year is the Home Renovation Tax Credit or HRTC.  The HRTC is a non-refundable tax credit based on eligible expenses for improvements to your house, condo or cottage. 

Please note that the HRTC’s is available for the 2009 tax year only and the eligible period began last January 28, 2009 and will end on January 31. 2010. 

Eligible expenses for goods acquired during this period, even if they are installed after January 2010 will still qualify.  However, if an eligible expense involves work done by a contractor or a third party, and the work is not completed by the end of January 2010, only the portion that is completed before February 1, 2010 will qualify even if a payment has been made.

Sources:  www.cra-arc.gc.ca  and www.taxtips.ca

TAX TIPS FOR INVESTORS

These are some helpful tips for investors on managing their tax transactions:

INTEREST & CARRYING CHARGES:  Whenever money is borrowed to invest, in anything other than your personal residence or an RRSP, it is tax deductible.

FOREIGN INVESTMENT INCOME:  Most income from investments that you own personally is taxable, whether it is domestic or foreign. 

PURCHASING INVESTMENTS PERSONALLY VS CORPORATELY:  Investments held in a corporation are considered passive income, unless investing is the main line of business of the Corporation.  Passive income in a corporation is taxed at the highest tax rate.  Therefore investing personally is more tax effective unless the individual is already at the highest marginal tax rate.  However, this being said, the advantage of investing through Corporations is that you can maintain control of your assets without ownership of them.  This allows for creditor protection.

ASSET ALLOCATION:  A big key for tax savings in investments is asset allocation.  Allocating which spouse or family member holds the investment, allocating the trust, or a corporation to hold the investment, or holding the investment offshore, all lead to tax savings when planned properly.

For more on tax planning for investors, send me an email at info@kustomdesign.ca or just go through the Ask the Guru section.