Tax Tip #5 – Claim those investment expenses

Allan | February 5, 2012 - 9:44 am

If you have investments, you may be able to claim related carrying costs and investment expenses. Carrying costs include fees such as a safety deposit box rental or fees paid to an investment advisor.  You can also claim interest expenses on the money that you borrow to for certain investments.

You can deduct interest and carrying charges incurred to earn income from securities, bonds and other investments, if they are earning investment income. The requirement of earning income generally means that the investments should be paying interest or dividends.

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Tax Tip #4 – What’s new?

Allan | February 4, 2012 - 9:53 am

The following are some new changes affecting your 2011 Personal Income Tax Return:

  • Children’s arts amount
  • Volunteer firefighters’ amount
  • Allowable amount of medical expenses for other dependants
  • Canada Child Tax Benefit (CCTB)
  • Canada Pension Plan (CPP) contributions
  • Students tuition credit
  • Investment tax credit
  • Exploration and development expenses
  • Split income of a child under 18

Please refer to the attached press release from the Canada Revenue Agency. http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/whtsnw-eng.html

Please contact us to discuss how these changes will benefit you.

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Tax Tip #3 – Newcomers to Canada

Allan | February 3, 2012 - 10:03 am

Are you a new resident of Canada? If yes, then you will find these tax tips very interesting.

If you are a newcomer to Canada, you can be authorized to receive payments such as the Canadian Child Tax Benefit (CCTB) or the goods and the services/harmonized sales tax (GST/HST) credit. To receive these credits, you must report your income from all the sources, including money earned worldwide and within Canada. Like all the Canadians, you have the right and the responsibility to file your income tax every year.

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-eng.html

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Tax Tip #2 – RRSP Contributions

Allan | February 2, 2012 - 8:27 am

A Registered Retirement Savings Plan (RRSP) can help you save for retirement, an education or even buy your first home.  You have until February 29, 2012 to contribute to your RRSP so that you can reap the benefit of a tax deduction on your 2011 tax year.  To retrieve your RRSP deduction limit for 2011, please refer to your 2010 Notice of Assessment.  You can also use the new online service offered to you by the CRA named “My Account”.

My Account lets you obtain the information on your RRSP contribution limits, contribution requirements for the Home Buyers Plan and contribution requirements for the Lifelong Learning Plan.  You can also receive information on your Child Tax Benefits and your GST/HST payment information.

For more information on RRSP, visit http://www.cra.gc.ca/rrsp or log on to My Account at http://www.cra.gc.ca/myaccount.

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-eng.html

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Tax Tip #1 – File For Your Children

Allan | February 1, 2012 - 10:15 am
The income tax filing for your children can be very beneficial to them in the future. For the 2011 tax year, if your child has income of less than $10,527 there is no tax to pay.  However, by producing an income tax return for your child, he/she will reap the benefit of creating RRSP contribution room which can be used in the future.

Also if your child is above the age of 18, they can be entitled to the GST/HST credit.  The only way your child can profit from this is to produce an income tax return.

For more information on payment dates and how the GST/HST credit is calculated, visit http://www.cra-arc.gc.ca/bnfts/gsthst/fq_pymnts-eng.html

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-e.html

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29 Days of Tax Tips!

Allan | January 27, 2012 - 1:13 pm

Whether you like it or not, tax season is fast approaching…

On a regular basis, we post Tax Tips and advice. We feel that it’s very important to keep all Canadians advised on their tax matters. Starting February 1, 2012 and continuing throughout the month of February, we will be posting one new tax tip daily!

Stay tuned and check back often!!!

 

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Late Tax Filing Interest and Penalties

Allan | May 18, 2011 - 8:53 am

Interest

If you have a balance owing for 2010, the Canada Revenue Agency charges compound daily interest starting May 1, 2011, on any unpaid amounts owing for 2010. This includes any balance owing if your tax return is reassessed. In addition, you will be charged interest on the penalties starting the day after your return is due. The rate of interest charged can change every three months. See prescribed interest rates.

If you have amounts owing from previous years, the CRA will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years.

Penalties

If you owe tax for 2010 and do not file your return for 2010 on time, the Canada Revenue Agency will charge you a late-filing penalty. The penalty is 5% of your 2010 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months.

If you were charged a late-filing penalty on your return for 2007, 2008, or 2009 your late-filing penalty for 2010 may be 10% of your 2010 balance owing, plus 2% of your 2010 balance owing for each full month that your return is late, to a maximum of 20 months.

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David Letterman – Top Ten Tax Tips

Allan | April 15, 2011 - 10:25 am

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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Taxpayer Bill of Rights

Allan | March 17, 2011 - 9:57 am

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!

Allan | March 14, 2011 - 10:11 am

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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