RazorPlan 2019 Tax Update
By Mike Howe February 4, 2019
Each year as part of your subscription to RazorPlan, the program is updated for any changes in the tax calculations. In February 2019 we updated RazorPlan for the following changes to the program’s tax calculations:
Federal and Provincial Tax Brackets
Both the Federal and most Provincial governments continue to index both the basic personal and income thresholds for inflation. This indexation will impact the amount of tax payable in your client files that are already entered in RazorPlan. The following link provides more details about this indexation adjustment at the Federal level (Provincial rates can be confirmed by visiting the provincial government website).
Important Federal Values for 2019
| Basic Personal Amount | 20.5% Tax Rate Threshold | 26% Tax Rate Threshold | 29% Tax Rate Threshold | 33% Tax Rate Threshold |
| $12,069 | $47,630 | $95,259 | $147,667 | $210,371 |
Savings Program Limits
There are government legislated savings programs that most Canadians can use to help save for their retirement. For Canadians over the age of 18 there is the Tax Free Savings Account (TFSA) and for Canadians that earn employment income there is the Registered Retirement Savings Plan (RRSP). Both of these program have annual limits that are updated and in 2019 the following changes are necessary for the calculations in RazorPlan:
- Annual TFSA dollar limit increased to $6,000
- Annual RRSP dollar limit increased to $26,500
- Yearly Maximum Pensionable Earnings (YMPE) increased to $57,400
The link below provides more details about the current and past limits for these savings programs:
Government Benefits
A critical feature when preparing financial plans is the impact that government benefits will have on a client’s future. In RazorPlan, there are two government benefit programs that are updated annually, namely Canada Pension Plan (CPP) and Old Age Security (OAS). The benefits provided by these programs are adjusted every January if there is an increase in the cost of living as measured by the Consumer Price Index. Below are the 2019 changes to both the CPP and OAS maximums with corresponding links to the government of Canada sites that outline benefits payable from each program. These amount have been updated in RazorPlan.
- Increase in maximum CPP to a monthly amount of $1,154.58
https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html
- Increase in the maximum OAS payment to a monthly amount of $601.45 and the OAS repayment threshold to $77,580.
https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html#tbl1
Additional Tax Updates
In addition to the above tax changes the latest release of RazorPlan has been updated for the following changes:
- New ineligible dividend gross-up rate (15%) and ineligible dividend tax credit rate (9.03%).
- Updated Age credit of $1,124 Federally with a net income threshold of $37,790 at which the credit starts to be clawed back.
- All provincial thresholds, basic personal amounts and age credits including age credit income thresholds.
Corporate Passive Income and CPP Enhancements
In the next release of RazorPlan, new enhancements will be added to the program to allow advisors to model the changes to the Corporate Passive Income rules. Also, the calculations for the enhanced CPP benefits will be added. When these enhancements have been added to the program another email will be sent to our newsletter list. Click here to join our newsletter list.
If you have any questions about RazorPlan and the tax calculations or the impact of the above changes please contact us at support@razorplan.com.
