Tag Archives: Government

Is Hiring a Tax Professional Right for You?

Guest Blogger | January 12, 2012 - 1:44 pm

It’s about that time of year again… Tax Season! For some, it’s just another time of the year in which we fill out some forms and it’s over with.  For the majority, however, it’s a time of stress and procrastination.  

When I first filed my tax return, I hired a professional to do it for me, which was incredibly convenient. On the other hand, I was the butt of jokes from many of my friends, who all do it online for minimal cost. Still, there’s much to be said for hiring a professional to complete your tax forms, especially if you have a family, own investments or run a business. Here are a few reasons you may want to hire a professional instead of going the DIY route. 

You’ll skip the hassle. 

I was raised in a family in which, if the possibility of having someone else complete a task was presented, we’d take it.  If you are a notorious procrastinator or if you’re already very busy with a job and kids, just suck it up and hire a tax professional. It’s almost completely painless and well worth the expense (which normally pays for itself!).

 You’ll make no mistakes.

There are two obvious goals of filing your taxes—to avoid trouble with the government and to maximize your return. Making mistakes when filing your taxes alone could get you in trouble, and could as well make you lose out on some money. Certified Professional Accountants know exactly what sort of deductions and claims you can make to get the full tax return that you deserve.

You have a complicated tax situation that necessitates professional help.

For some, their taxes may be so simple that filing it online is perhaps the best choice. At the same time, however, everyone’s situation is different, and yours may be so complicated that you’ll absolutely need a professional’s help. Hiring a tax professional is ideal if you are in business, if you are experiencing changes in your family situation (divorce, marriage, kids going to college, etc.) or if you wish to diversify your financial portfolio. All of these scenarios would make filing your taxes on your own particularly tricky.

You’re more likely to meet the deadline and avoid late fees.

When you hire a tax professional, he/she will keep you on task so that you turn everything in on time. If you want to avoid these horrendous fees as noted by the Canada Revenue Agency, then hire someone to avoid being late.

Alvina Lopez is a freelance writer and blog junkie, who blogs about accredited online colleges. She welcomes your comments at her email Id: alvina.lopez@gmail.com. 

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Tax Hikes Everywhere!

Allan | January 3, 2012 - 12:19 pm

Happy New Year! The Government is imposing various tax increases for all Quebecers in 2012. An increase in the QST, increase in the QPP contribution rate, increase in the health contribution fund, increase in gas tax, etc…

Now, more than ever it’s extremely important to seek professional advice and take advantage of all possible tax deductions available to you.

For more information on the various tax increases, please watch this short video.

 

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How Do Canadian Tax Treaties Work?

Guest Blogger | December 7, 2011 - 11:40 am

If you are Canadian and thinking about working abroad or you are from another country and considering making Canada your new home for family and work, you’ll need to understand the tax treatment you’ll receive from the two countries involved. Canada maintains tax treaties with almost one hundred countries around the world, some large, some small.

The idea of a tax treaty is that you can legally avoid double taxation in circumstances where you would otherwise pay tax on the equivalent income in both countries. Usually, the planning behind a tax treaty decides how much tax is paid in one country and the level in the other. Tax treaties often cover pensions, wages, salaries and interest.

Look At An Example of a Treaty

As an example, let’s look at the tax treaty between Canada and Ireland as there is a high exchange of workers between these two nations. Most tax treaties are quite similar although if you are planning on making a move which involves use of a tax treaty, you will need to take professional advice to ensure you completely understand any taxation system you are entering.

It’s always a difficult time moving to another country, especially if you are taking family with you and maybe arranging schooling as well. Nevertheless, planning and information gathering is an immense task that you should start sooner rather than later so you are able to consider matters including:

  • New personal relationships
  • New job
  • New living conditions
  • New school
  • Health care arrangements
  • Tax arrangements
  • Business start up planning

You shouldn’t base your taxation planning on this article; it’s here to help you decide which information you should go and find out more about.

At least you know a tax treaty exists between the two countries. Now it’s time to read all the documentation, making notes as you go along so you are able to ask the right questions later.

Domiciles And Residence

Domiciles and residence are two important concepts. Your permanent home is your domicile. It has nothing to do with nationality or tax residence. If you have no fixed expectation of moving to the other country, your domicile won’t change.

If you are moving to Ireland, in our example, but remain a Canadian for domicile purposes, your taxation will be paid on a remittance basis, even if you are noted as resident in Ireland. Only taxable work and money you bring into Ireland will be taxed there.

Residence is confirmed by legislation. If you spend 183 days or more in Ireland in a tax year or 280 days or more over two years, you will be considered tax resident in that country.

The main reason for this legal jargon is to show that you won’t be taxed in both countries. So as a Canadian, resident in Ireland and earning income in Canada, your Canadian government will charge a withholding tax against the income. That turns into a tax credit when you arrange your affairs in Ireland – so you don’t pay the tax twice.

Inheritance or Estate Taxation

Thinking ahead, Ireland applies what it calls Capital Acquisitions Tax on gifts and inheritances – remember there’s been no inheritance or estate tax in Canada since 1972. If you live in Ireland for five years you will be open to their taxation of Irish gift and estate taxes.

If you’re thinking of staying in Ireland for a long time (and are allowed to do so) you will need to learn their pay-related social insurance plans – regular contributions from salary which include a health levy. Ireland has a social security agreement with Canada. This means that any contributions you pay in either country are treated towards your final pension arrangements, wherever you take them. So either your Canadian Pension Plan counts over there or your Irish pension counts in Canada.

Essentially, you won’t pay tax on the same worldwide assets and income in both countries. One will offset against the other. It is imperative that you take serious accounting and taxation advice before considering such a move as the implications may be long term and not that friendly if you don’t plan properly.

Olivia Lennox is a personal finance writer and frequently writes on tax issues. She writes on behalf of a 0% balance transfer service and other consumer sites

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Tax Credits for Senior Home-Support Services

Guest Blogger | October 17, 2011 - 10:13 am

If you are a senior who uses home-support services, you could be eligible for a tax credit for your expenses.  The government makes this offer as a way to keep seniors in their homes and out of public services and social services homes either all together or for as long as possible.

Are You Eligible?

In order to be eligible, you must be 70 years-old or older, and be a resident in Québec as of December 31 of the year that you apply for the tax credit.  For instance, if you wish to apply for a tax credit this year, 2011, you must be a resident on December 31, 2011.  Any services incurred before your 70th birthday are ineligible for the tax credit offer.

How Much Money Will You Receive?

The amount of tax credit you receive is dependent on two factors:

  1. Your living situation.
  2. Where you live.

If you are an independent senior living alone, you are eligible to receive a tax credit of 30 percent of up to $15,600 in home-support expenses per year.  If your expenses met or exceeded $15,600 in a given year, then you will receive a tax credit of $4,680 for that year.

If you are a dependent senior living alone, you are eligible to receive a tax credit of 30 percent of up to $21,600 in home-support expenses per year.  If your expenses met or exceeded $21,600 in a given year, then you will receive a tax credit of $6,480 per year.  Note that the Revenu Québec may require something in writing from your physician certifying that you are a dependent senior.

If you are an independent married couple, you are eligible to receive a tax credit of 30 percent of the maximum combined home-support expenses of $31,200 ($15,600 per member of the marriage).

If you are a dependent married couple, you are eligible to receive a tax credit of 30 percent of the maximum combined home-support expenses of $43,200 ($21,600 per member of the marriage).

If you are a dependent and your family receives an income that exceeds $52,080 per year, then your eligible tax credit will be 27 percent, as opposed to 30 percent, of your home-support expenses.

Which Home-Support Services Are Eligible?

Where you live will affect the amount of tax credit you receive.  Condos, apartments, houses, health establishments, and senior citizens’ residents may receive credits for living expenses.  For instance, if you live in a condominium, you may receive credits for condo fees.  If you live in an apartment, the government will credit you 30 percent of 5 percent of your monthly rent that does not exceed $600.  So, let’s say your rent is $1,000 per month; you will receive 30 percent of 5 percent of $600, as that is the rent cap: .30 *($600*.05) = $9/month.

Additionally, you can receive credits for expenses not included in your rent or condo fees.  For instance, you may receive credits for cleaning services for the outside or inside of your residence.  However, in order to receive tax credits for the expenses not included in your rent or condo fees, someone other than you or your caretaker must prove the monetary amount; for example, a receipt from the company that you hired to clean the outside of your house will suffice as proof.  To see the full details of the tax credits for living expenses and services, you should visit the Revenu Québec website.

How to Apply for the Tax Credit:

There are two ways to file for a tax credit for home-support services if you are eligible.  The first is by filling out Schedule J of your income tax return.

The second is applying for advanced payments.  If you would prefer advanced payments for your services, then you must apply for direct deposit by December 1st of the year in which you incurred your expenses, otherwise you will have to claim them on your Income Tax Return.  In order to apply for advanced payments, you must:

  1. Register for direct deposit.
    1. If you are not registered, you can do so by either 1) mailing a blank cheque to the Revenu Québec.  The cheque should have “VOID” written across it and include your name and social insurance number; or 2) Filling out a Request for Direct Deposit form.  If you live closer to the Montréal office then you should complete form LM-3.M-V.  If you live closer to the Québec office, then you should complete from LM-3.Q-V.
  2. Complete the application form relevant to your living situation.
    1. For rent and services included in rent, fill out TPZ-1029.MD.7-V.
    2. For services included in condominium fees, fill out TPZ-1029.MD.8-V.
    3. For occasional services (like the cleaning of the outside of your house), fill out TPZ-1029.MD.9-V.

Important Things to Know

  1. Power of Attorney

If for any reason you cannot manage the responsibility of dealing with the Revenu Québec, you may appoint a family member to be your Power of Attorney by filling out MR-69.MD-V; this form is called Power of Attorney for Advance Payments – Tax Credit for Home-Support Services for Seniors.

  1. Save your receipts!  You will need them to prove your expenses.  If you do not have proof of services, then you will not receive a tax credit.
  2. Expenses are only eligible for the given calendar year that you are applying to receive tax credits. For example, you will not receive tax credits for expenses incurred in 2010 for the 2011 calendar year.
  3. To qualify an expense for the tax credit, you or your legal guardian must have paid for the expenses.

 

Amy Shoemaker is a guest post and article writer bringing to us her thoughts on tax credits for senior home-support services.

Additionally, Amy writes about nursing home abuse for www.nursinghomeabuse.net.

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Denmark levies the world’s first fat tax

Allan | October 4, 2011 - 8:41 am

Denmark Saturday became the first country in the world to impose a fat tax after a week in which consumers hoarded butter, pizza, meat and milk to save a few dollars.

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Government Spending Habits and Excessive Taxing

Guest Blogger | August 24, 2011 - 9:01 am

An overtaxed society can create a deficient economy when the populous is burdened with the extra expenses of excessive tax. Funds used here can be used on a more productive level or a healthier happier lifestyle. The journey from which the sum of $200 takes from pay check to the last penny is likely taxed in more ways than we realize and below is compromising example.

To begin with, let’s remove the 20% income tax leaving $160.00

From there, a modest 3% for old age pension contribution leaving $152.00 Next, a modest 2% for EI contribution which leaves $148.96 Then of course for the benefit of this example non-food purchases are made from the remaining $148.96 which of course are taxed a further 14% leaving an actual spending net of $128.10 from the original $200. Calculate this example over a year’s time and the average citizen could dish out close to $1,000 in taxes just on this $200 monthly allowance. And this is not inclusive with home expenses, heating, vehicle, gas, clothing, gifts etc.

Additionally upon retirement our little nest egg is taxed once again. Not only does this compound the original taxes taken years prior from the original $200, taxes 30 years later are far higher. Now, if we the people can find ways to adapt our living habits and by force mind you to accommodate this excessive taxing and/or create ways to generate additional income, then why is it so difficult for government to apply the same effort?

Each year the same questions arise within government. How can they raise more money? How can they pay for this service or that project? Yet, each time the answers fall under the same category or are mentioned on their list of solutions; tax the people. A simple and effortless solution is often considered ideal when the labouring efforts of others are involved isn’t it?

Alternative yet Simple Methods

An ideal start might be to revamp the way government and its branching departments spend our tax dollars in the first place. Needless expensive ad campaigns, excessive monthly allowable budgets inclusive with expensive dinner engagements, gas allowance, private travel etc. Do they really need to have that $200 meal? Is that really necessary when lower income earners foot the bill?

With a prosperous income to begin with why is there a need to use income from the people for their extravagant business trips and dinners? An ideal way to re-direct this money back to the people would be to account for it themselves and apply them as business expenses when filing taxes like the rest of the population.

There are far too many small government offices and positions branched out into too many different departments. An example: a simple phone call to any municipality and the prompts are endless as to which department you seek. Multi-tasking within these positions would definitely generate money.

Reason being, the regular job market which is another disturbing problem has developed into a endless array of multi-tasking jobs but are all categorized under one single job description. Yet, our wages are based on a pay scale which is outdated and almost pathetic.

If we the people can adapt to the demanding needs of a competitive job market saturated with multi-tasking jobs, then the thousands of needless departments within government can apply these same methods. This is how companies in Canada survive. This is how government can re-modify their labour costs using the savings to benefit in needed areas that seem to arise year after year.

Government needs to address these issues as it’s becoming more difficult to acquire simple jobs and simple housing for the average citizen who can’t afford post secondary education. How does one acquire experience when companies large and small refuse to train even for the simplest positions?

Today’s society and government is far too demanding, far too selfish focusing more on profits gained from citizens with the perfect credit rating, the healthy bank account and that over qualified resume.

Focusing on the whole picture here, a little leniency, human compassion and an overall team effort can go a long way when creating a healthy economy and a balanced government.

Author: Kellie Hastings

Researcher and writer of articles pertaining to health, anti-aging, pollution, and public/health awareness. For health concerns on GE Foods, Cloned animal foods, GE Food Watch List, Diseased Factory Farms- videos and FDA corruption visit [http://www.discovery-health.org]

US Dollar credit card

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What is the Quebec Prescription Drug Insurance Plan?

Allan | July 8, 2011 - 10:08 am

In Québec, everyone must be covered by prescription drug insurance. Two types of insurance plans offer this coverage:

  • Private plans (group insurance or employee benefit plans)
  • The public plan, that is, the one administered by the Régie de l’assurance maladie du Québec.

If you are eligible for a private plan, you must join that plan and provide coverage for your spouse and children. Only those persons who are not eligible for a private plan must register for the Public Prescription Drug Insurance Plan.

Administered by the Régie de l’assurance maladie du Québec, the Public Prescription Drug Insurance Plan is a government insurance plan offering basic prescription drug coverage. It was set up in 1997 to cover all Quebecers who are not eligible for a private plan.

The insurance plan helps cover a portion of the cost of prescription drugs purchased at the pharmacy. Below is an example:

EXAMPLE
A $60 prescription presented at the pharmacy on July 1, 2011

Monthly deductible

Monthly
co-insurance

Contribution paid by the insured person

Amount paid by the Régie
Fixed amount paid when making the first drug purchase during the month. 32% of the cost of the prescription minus the deductible Total of the deductible plus the co-insurance Cost of the prescription minus the contribution by the insured person

$16

 $60 – $16
=
$44 x 32 %
=
$14.08		 $16
+
$14.08
=
$30.08		 $60
-
$30.08
=
$29.92

Generally speaking, persons covered by the public plan must pay a premium, whether or not they purchase prescription drugs. The premium is collected every year by the ministère du Revenu du Québec when income tax returns are filed. For example, the premium for 2011 will be collected in the spring 2012, when income tax returns for the 2011 taxation year are filed. Persons who pay a premium to the public plan must complete Schedule K of their Québec income tax return.

The amount of the annual premium varies from $0 to $563 per adult, depending on net family income. This amount is in effect from July 1, 2011 to June 30, 2012.

Source – Regie de l’assurance maladie Quebec:   http://www.ramq.gouv.qc.ca

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The Cost of Canada’s Constitutional Monarchy

Allan | April 27, 2011 - 8:19 am

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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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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2011 Brings Many Tax Increases

Allan | January 10, 2011 - 3:47 pm

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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