Canadian Tax Cut Updates

Tax Cut highlights:

• The Goods and Services Tax will be cut an additional 1 per cent as of Jan. 1, leaving the federal consumption tax at 5 per cent. The GST cut will cost the government about $5.5-billion. But the GST credit for low-income Canadians will remain at its current level, said Mr. Flaherty

• The basic personal income-tax exemption will increase to $9,600 from the current $8,929, retroactive to 2007. And it will increase again to $10,100 as of Jan. 1, 2009.

• The government is reducing the lowest personal income-tax rate to 15 per cent from 15.5 per cent, a retroactive change that will also be felt at tax-time this coming year.

• There will be a cut to corporate taxes of 1 per cent in 2008 with on-going reductions that will see business taxes fall down to 15 per cent by 2012 from 22 per cent today. That will leave Canada with one of the lowest corporate tax rates among the industrialized economies.

• The government will still have $10-billion in surplus cash to apply to the national debt.

Canada Child Tax Benefit (CCTB)

The October payment is out today. If you are expecting a benefit payment and haven't received it by the end of the month, please contact CRA.

In order to receive CCTB payments, you and your spouse or common-law all need to file a tax return even if there is no income.

You can still file your 2006 tax return if you haven't done so. Contact us if you have questions about Child Tax Benefit (CCTB) or need help with your tax return.

Higher Canadian Dollar Random Thoughts

Canadians are getting a 20% raise! More people are driving down the south to pick up bargains. Crazy lineups these days.

However, if you are an American living in Canada or green card holder, you may encounter an unexpected surprise. If you haven't filed your US tax return, the border crossing guards now have access to these information and they may bar you from entry. It is no secret that CRA and IRS have been sharing tax information for years. But for the first time, these information are made available to the Homeland Security.

As a dual citizenship of Canada and US or a US green card holder, you have the obligation to file US tax return every year! We have a client who was born in the US and moved to Canada 25 years ago when he was 2. He found out the hard way when he was having trouble to apply for his US passport.

If you need help on filing your tax return, staff from YY consulting are specializing in the Canada-US cross border tax. And remember to check the border wait times before you go.

US Tax Payer Tax-filling Extension deadline: Oct 15

Just a reminder that Oct. 15 is the US tax-filling extension deadline. Please consult your accountant if you haven't done your tax yet.

Our Readers' Status In Canada and US

Canadian	18 (42%)
US citizen	7 (16%)
US Green card	6 (14%)
Canada PR	6 (14%)
Working visa in US	3 (7%)
Working visa in Canada	5 (11%)
others	3 (7%)

Votes so far: 42

Thanks for all your inputs! We have a decent number of votes to reflect the demographics of our readers. Staff of YY Consuting Tax would love to hear from you!