Overview
The 2013 federal budget introduced significant changes impacting businesses and individual taxpayers across various sectors. These adjustments aimed to address the nation’s fiscal challenges through a combination of spending cuts and revenue enhancements.
Understanding these budgetary shifts is crucial for strategic financial planning, as they influenced everything from tax rates to available deductions and credits.
- Tax Implications: The budget brought about various tax adjustments for both corporations and individuals, affecting income, capital gains, and payroll taxes.
- Business Deductions: Several provisions modified existing business deductions and credits, potentially altering the cost of doing business and investment incentives.
- Economic Outlook: The budget’s measures were projected to have a broad economic impact, influencing consumer spending and business growth.
How the 2013 Federal Budget Impacts Your Business and Taxes
Of the dozens of tax initiatives and measures introduced in the budget, we have narrowed our list down to the 4 most likely to affect you, our client:
- Tax rate on Non-Eligible Dividends: The effective tax rate on non-eligible dividends, dividends paid by the majority of small businesses, will be increasing by 1.64% at the top marginal tax rate. Starting in 2014 the gross up and dividend tax credit for non-eligible dividends are changing and this will have the effect of increasing the amount of tax that you will pay personally on dividends that are paid from your company.
- Lifetime Capital Gains Exemption (LCGE): The LCGE is increasing from $750,000 to $800,000 effective for 2014. It will also be indexed for years after 2014.
- First Time Donor’s Super Credit: If you or your spouse have never claimed a personal tax credit for donations or haven’t since 2007 then you can receive an extra “super credit” if you claim donations anytime from 2013 to 2017. The donations must be made after March 20, 2013 and before December 31, 2017 and will generate an extra 25% tax credit on up to $1,000 of donations.
- Safety Deposit Box: For 2014 and subsequent years your safety deposit box will no longer be a deductible expense.
If you would like to contact us about any of the above, please call us at 780-466-6204 or click here.