Advisor.ca | Does inflation affect your clients’ taxes?
Personal income tax and benefit amounts are indexed to inflation using Statistic Canada’s Consumer Price Index data every year, says the CRA.
Increases to items like tax bracket thresholds and amounts relating to non‑refundable credits will take effect on January 1, 2013.
Increases to the Canada child tax benefit and the goods and services tax credit will take effect on July 1, 2013, however, to coincide with the beginning of the program year.
Your clients should be aware of all changes, so make sure they understand how their taxes will be affected in the coming year.
See the CRA’s chart, which compares the indexed amounts for the 2012 and 2013 tax years.