For those who are not yet aware of the new limits and tax changes for 2019, here’s a short summary below for your reference.
- Maximum RRSP (Registered Retirement Savings Plan) Contribution Limit – $26,500 (2019), $26,230 (2018) – Deadline March 1st for the 2018 tax year
- TFSA (Tax Free Savings Account) Contribution Limit – $6000 (2019) Total Lifetime – $63,500
- YMPE (Yearly Maximum Pensionable Earnings) – $57,400
- EI (Employment Insurance) Limit – $53,100 (EI Premiums have gone down by approximately 2.40% from 2018)
- LCGE (Lifetime Capital Gains Exemption) for QSBC (Qualified Small Business Corporation) – $866,912
- OAS (Old Age Security) Claw Back Thresholds – $77,580 to $125,696
- CPP (Canadian Pension Plan) Premiums have gone up – 5.10% for employees and 10.20% for self-employed (Will reach 5.95% / 11.90% in 2023) – Increase will go towards future CPP enhancements
Small Business Corporate Changes:
- Small Business Income Limit Increase – $500,000 Manitoba has increased the limit from $450,000
- Small Business Tax Rate – 9% – Federal rate reduction on the first $500,000 of active business income
- Passive Income Limit of $50,000 – This now comes into effect, that every dollar of passive income earned over $50,000 corporately will reduce the access to the SBL by $5.
This is a simplified list of some of the tax changes for 2019, there are other changes to tax limits and credits amounts. Now is a great time to look at sheltering additional income to try to work around passive income changes.
Written by Adam Buss, CFP, RRC, FCSI, CLU – Wealth & Estate Planning Specialist