Tax Changes For 2012

10 January, 2013

Changes will be made to the rules governing Canada Pension Plan contributions, effective January 1, 2012. As of that date, individuals aged 60 to 65 who are currently receiving CPP retirement benefits and who are employed will be required to resume making CPP contributions. Such individuals who are between the ages of 65 and 70 will also have CPP contributions deducted from their income, unless they file an election choosing not to make such contributions. Individuals aged 70 or older will not be required or permitted to make CPP contributions.
RRSP deduction limit increases to $22,970
The RRSP contribution limit for the 2012 tax year (for which the contribution deadline is March 1, 2013) will increase to $22,970. In order to make the maximum contribution for 2012, it will be necessary to have earned income of $127,611 for the 2011 taxation year.
Tax-free savings account contribution limit
There is no change to the TFSA contribution limit for 2012, as the annual limit remains at $5,000. Current year TFSA contributions can be made at any time during the calendar year. Where a contribution is not made during the calendar year, the contribution room is carried over and the contribution may be made in any subsequent taxation year.
Individual tax instalment deadlines for 2012
Millions of individual taxpayers pay income tax by quarterly instalments, which are usually due on the 15th day of each of March, June, September, and December. As September 15 and December 15, 2012 each fall on a Saturday, the payment deadline for those instalments will actually be the following Monday, September 17th and December 17th, respectively.”

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