Author Archives: Allan

The Cost of Canada’s Constitutional Monarchy

There is a lot of media hype surrounding the upcoming marriage of Prince William and Kate Middleton in the British Royal Family. Many people are looking forward to what dress Kate will be wearing, how the ceremony and celebration will play out and who will end up attending the wedding. Reports state that an estimated audience of two billion people will tune into the wedding on the morning of April 29, 2011.

With all this attention surrounding the Royal Family, Canadians are beginning to wonder if we are paying for any of this. I did some research and found a very interesting report from the The Monarchist League of Canada dated from July 2009.

SURVEY HIGHLIGHTS

  • Canada’s Royal Family and Vice-Regal officeholders together undertake significantly more than 4,000 engagements a year.
  • The report calculates that the total cost of the Canadian Crown in 2007 was $50,146,896 or $1.53 per Canadian.
  • The Monarchy costs residents of the United Kingdom (a unitary state of compact size) a total of £38 million in 2007 ($76.7 million, or $1.26 per person).
  • By way of comparison, the Canadian Monarchy costs Canadians less than the Senate ($2.45 per person), about the same as the National Gallery of Canada ($1.43 per person) and a little more than the Library of Parliament ($1.02 per person).
  • The same accounts indicate that the Canadian Broadcasting Corporation cost Canadians $1,114,053,000 ($33/Canadian).
  • The current Civil List for the Belgian Monarchy is €13.8 million ($22.6 million) or $2.18 per Belgian resident. The 2007 budget accorded the Spanish Royal House by the Cortes was €8.66 million ($14.4 million) or $.35 per Spanish resident.

Overall, the cost of Canada’s Sovereign and eleven Governors is comparable to the monarchies of other Western nations. 

Source: The Cost of Canada’s Constitutional Monarchy

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David Letterman – Top Ten Tax Tips

With the tax deadline looming, David Letterman has released his Top Ten Tax Tips Just in time for the end of tax season. Enjoy!!

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Funny! A Day in the Life of a Financial Advisor

The week has just started and tax season is in full swing. Here is a video to help brighten up your day!

Tax planning and financial planning are two main topics leading to your overall financial success. Enjoy the funny video… It’s hilarious!

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Taxpayer Bill of Rights

In an effort to increase accountability and transparency, the Canada Revenue Agency, or CRA, released the Taxpayer Bill of Rights in 2007. The underlying assumption of this document is that if citizens are treated fairly and get the information they need, they will be more likely to comply with the law. Fifteen rights for taxpayers are outlined. They include general rights including the right to privacy, access to accurate and timely information, professional and courteous treatment and the fair application of laws.

In the Taxpayer Bill of Rights, more specific rights are outlined as well. These include the right to a review and possible appeal, the right to lodge a complaint and be provided with an explanation of the findings and the right to service in both English and French. Also listed is the right to representation, which may come in the form of an accountant or any person of the taxpayer’s choosing. The Taxpayer Bill of Rights also provides relief from penalties and interest in extraordinary circumstances.

Additional provisions are the specific requirements of the CRA, in particular, the annual publishing of their service standards and report as well as timely warnings by the CRA of shady tax schemes to citizens.

The rights outlined fall into either the legislative or service category. Issues in the legislative area can be addressed through the redress rights in the legislation and court appeals where appropriate. Taxpayers with service issues may file a complaint or contact the Taxpayers’ Ombudsman.

In addition, the Taxpayer Bill of Rights seeks to address small business concerns with five commitments. These five promises are aimed at reducing the compliance burden on small businesses by reducing costs and offering resources to assist small businesses with compliance.

Here is the link for complete Taxpayer Bill of Rights offered through the Canada Revenue Agency.

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When Dealing With the CRA Know Your Rights!

The Taxpayer Bill of Rights outlines what you can expect in your dealings with the CRA. Know the services you are entitled to before initiating any dealings with the CRA will help you make the most of your interactions.

Tip # 1 – Be prepared

Have pertinent information and documentation on hand when you contact the CRA.  This can include your:

Income tax report
Social Insurance Number (SIN)
Business number
GST registration number
Any correspondence relevant to your request or complaint to the CRA.

Tip # 2 – Be quiet and respectful

Addressing issues of taxes can be stressful. If you feel you that were treated unfairly and you are contacting the CRA to make a complaint, your emotions may be running high. Remember that the agent you are speaking to is probably not responsible or even aware of the situation you are seeking help with. They are there to assist you. If you are disrespectful or remove your frustration on them, you make it difficult for them to effectively understand your situation and provide the assistance you require.

Tip # 3 – Keep track of your communications

Take detailed notes of all your communications, written or verbal, with the CRA, including dates.

If you deal with the CRA by phone, make a written summary of the conversations.

Keep all correspondence you send and receive from the CRA.

A record of your transactions with the CRA may be useful at a later date in case of dispute about what was discussed.

Tip # 4 – Ask for the phone agents for their identification.

When you contact the call center of the CRA or general line of investigation, you are entitled to know the identity of the agent who handles your call. Ask the agent for their first name, agent identification number and regional suffix.
This information will will reinforce the agent’s accountability and may be useful if at a later date, you must prove that you spoke with someone at the CRA or to confirm that you have received advice.

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Have a Laugh!!

During this tough time of the year, we are all stressed with our pending income tax returns. Here’s a little video we found which might brighten up your day!

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Tax Information for People with a Disability

The Canada Revenue Agency (CRA) administers a range of benefits and credits for people with disabilities or those caring for a dependent with a disability.

Child Disability Benefit – The Child Disability Benefit (CDB) is designed for families caring for a child under age 18 suffering from severe and prolonged physical or mental functions. The CDB is paid monthly with the Canada Child Tax Benefit on the 20th day of each month. The CDB, which is based on family net income, provides up to a maximum of $205.83 per month for each child eligible for the disability amount. The CDB is reduced when family net income exceeds $ 40,970. For more information, visit www.cra.gc.ca/cdb

Disability Amount – If a qualified practitioner certifies on Form T2201, Disability Tax Credit Certificate, that you have a severe and prolonged physical or mental disability, you can claim the disability amount of $ 7,239 when filing your 2010 return. The disability amount can be transferred in whole or in part if the disabled person does not need to reduce its taxable income.

Medical Expenses – You may be able to claim the cost of medical expenses for a period of 12 months ending in 2010 (provided they were not claimed before) for yourself, your spouse or common-law partner, or your dependents. For 2010, your total expenses must exceed 3% of your net income or $ 2,024, whichever is less. For more information on medical expenses, including a list of common eligible expenses, visit www.cra.gc.ca/physician.

Registered Disability Savings Plan – A Registered Disability Savings Plan (RDSP) is a plan that provides for long-term financial security of a beneficiary who has a serious impairment of physical or mental function. The beneficiary under an RDSP must be eligible for disability tax credit. Although contributions are not tax deductible, income earned on contributions are tax-exempt while the funds remain in the plan. When earnings are withdrawn from the savings plan, they are taxable to the beneficiary. For more information, www.cra.gc.ca/disability.

For more tax information for people with disabilities, see Guide RC4064, Medical and Disability-Related Information, or go to www.cra.gc.ca/disability.

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When is the due date for 2010 Personal Tax Returns?

Generally, your return for 2010 has to be filed on or before April 30, 2011. As April 30, 2011 falls on a Saturday, this deadline will automatically be extended until Monday, May 2. 2011

The Income Tax Act specifies the due date for Personal Tax filing to be April 30th. The Interpretation Act s. 26 indicates that when the due date falls on a holiday, then the due date will be considered to be the next day that is not a holiday. The Interpretation Act s. 35(1) defines “holiday” by listing the applicable statutory holidays, and indicates that Sunday is considered a holiday. According to the Interpretation Act, Saturday is not considered a holiday. However, the CRA information on Important Dates for Individuals indicates that “When a due date falls on a Saturday, a Sunday, or a public holiday, we consider your payment to be paid on time or your return to be filed on time, if we receive it or if it is postmarked on the next business day.”

Source: Canada Revenue Agency Important Dates for 2011

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What is the Quebec Solidarity Tax Credit?

As announced in the March 2010 Provincial Budget, the Solidarity Tax Credit replaced the following:

  • QST credit
  • Property tax refund
  • Tax credit for individuals living in a northern village

To claim the solidarity tax credit, an individual must:

  • Be 18 or over
  • Be resident of Québec
  • Have legal status (Canadian citizen, permanent resident, refugee, etc.)
  • Not be confined to a prison or similar institution

Only one solidarity tax credit claim can be made per couple. To receive the tax credit payments, individuals must be registered for direct deposit. Individuals who are not already registered for direct deposit can register online using the Register for Direct Deposit service or submit their request for direct deposit along with their 2010 Personal Income Tax filing.

Payments for this new refundable tax credit will be paid once a month.

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2011 Brings Many Tax Increases

Make sure to count all your pennies because you are going to need them!

As of January 1, 2011 there have been a broad range of tax increases for all Quebecers and those individuals who live on the island of Montreal. Below is a list of all increases:

  • The Provincial sales tax rate (QST) increased to 8.5%. The combined GST/QST rate stands at 13.925%
  • QPP contributions will be calculated on the first $48,300 of earnings in 2011, up from $47,200 in 2010, so that the maximum payable by Quebecers will rise to $2,217.60 from $2,163.15 in 2010.
  • For the Quebec Parental Insurance Plan, the earnings threshold rises to $64,000 from $62,500 and the employee contribution rate increases to 0.537% from 0.506%, boosting the maximum payable to $343.68 from $316.25 in 2010.
  • Employment Insurance dues will be calculated at 1.41% on the first $44,200 of income, up from 1.36% on the first $43,200 in 2010, raising the maximum annual cost to $623.22, up from $587.52 in 2010.
  • The Quebec prescription drug insurance plan, also had its maximum annual premium increased to $600 from $585, though Quebecers who use the plan won’t face that cost until they file their provincial income-tax returns in early 2012.
  • A new provincial health contribution was announced in the last Quebec budget: $25 for all tax filers on 2010 returns, $100 in 2011 and $200 in 2012.
  • Individuals living on the island of Montreal will be subject to a new “car tax” which will be capped at $50 per vehicle owned. This new tax will be collected at the time of payment of the vehicle registration.
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