Tag Archives: Tax Credits

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.

Posted in Tax Tips | Tagged , , | Leave a comment

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

Posted in Tax Tips | Tagged , , , | Leave a comment

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. 

Posted in Guest Post | Tagged , , , , , | Leave a comment

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.

Posted in Guest Post | Tagged , | Leave a comment

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.

Posted in Tax Tips | Tagged , , , , , , | Leave a comment

Tax Information for People with a Disability

Allan | March 1, 2011 - 1:06 pm

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.

Posted in Tax Tips | Tagged , , | Leave a comment

What is the Quebec Solidarity Tax Credit?

Allan | January 20, 2011 - 10:56 am

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.

Posted in Tax Tips | Tagged , , , , , | 2 Comments

Start Your Tax Planning Today

Allan | November 8, 2010 - 10:27 am

For most people, tax planning is at the bottom of their to-do list.  While we all complain about paying income taxes, we should also put in the effort to reduce our income taxes payable come tax filing next year.

Right now, things are quiet and you can go through things without a panic.  When we’re in tax season, we become stressed and tend to overlook things which can cost us money.

Here are some year-end tax planning tips:

  1. Add up your taxable income from all sources. Include employment income, investments, RRSPs, etc… There may be ways to reduce your income tax bill but you will be limited after December 31.
  2. Get organized. If you haven’t already, start an envelope or folder to hold all your tax slips and receipts.
  3. TFSA withdrawals. If you plan on making a withdrawal from your tax free savings account, you should do so prior to December 31. You will then have the opportunity to recontribute as of January 1.
  4. Pool medical expenses. Medical expenses can be claimed in any 12 month period and the family’s expenses should be pooled together on to one tax return.
  5. Review your stock portfolio. It can be a wise decision to sell some stocks to lock in a capital loss or gain. Capital losses can be carried back three years or carried forward indefinitely.
  6. Don’t forget your renovations. You may have some receipts from early 2010 that are eligible for the home renovation tax credit (HRTC). The HRTC was available to be claimed only in 2009, so if you have receipts, you need to file an adjustment to your 2009 income tax return.
  7. Plan your moving day. Check the provincial income tax rates before in the province before you move. You are subject to provincial tax based on where you reside on December 31. So if there is a substantial difference in tax rates, you may want to speed up your move or defer it until the next year. For example, if you plan on moving from Toronto to Montreal, you should wait until after January 1 to avoid an extra tax bill.
  8. Purchase new computer equipment. If you are in business, you have until February 2011 to take advantage of the 100% capital cost allowance on your income tax return.
  9. Make an RESP contribution. To take advantage of the government’s Canada Education Savings Grant for 2010, you must make a contribution to your child’s RESP before December 31.
Posted in Small Business, Tax Tips | Tagged , , , , , | Leave a comment

GST & QST rebates for new housing and substantial renovations

Allan | July 19, 2010 - 2:37 pm

In Quebec, sales taxes of GST and QST apply to the sale of new housing. The cost of renovation services and construction materials is also applicable to additional GST & QST taxes. Under certain conditions, you may be entitled to a rebate (partial refund) of the GST and QST you paid on the purchase of new housing or on substantial renovation work done to your home. The rebate is equal to 36% of the taxes paid, but may not be over $6,300 in GST & $5,573 in QST.

The amount of the rebate is progressively reduced where the purchase price or fair market value of the new or renovated housing and the land is over:

$350,000 for GST purposes

$200,000 for QST purposes

No rebate is available where the purchase price or fair market value is:

$450,000 or more for GST purposes

$225,000 or more for QST purposes

For example, if you spend $95,000 plus taxes to renovate your home in Montreal, it will cost you an extra $12,231.25 in sales taxes. The GST/QST rebate allows you to receive $4,403.25 in cash refunds.

Contact us to inquire about our rebate claim services.

Posted in Tax Tips | Tagged , , | Leave a comment

Get a Head Start on Tax Planning for next year

Allan | May 13, 2010 - 10:51 am

Now that the April 30 Personal tax deadline has passed and your taxes are (hopefully) filed, make sure to plan properly for the 2010 tax year. In order to make next year’s taxes worthwhile, you need to make some changes right away.

Set up a monthly RRSP contribution from your bank account or payroll. Many individuals wait until the last minute to make an RRSP contribution or forget to do so. Why wait? By having your money deposited monthly, you’re paying yourself first and taking advantage of dollar cost averaging.

If you have taken advantage of the home buyer’s plan and/or lifelong learning plan, don’t forget to make that minimum RRSP contribution repayment during the year. Failure to do so will result in an increased taxable income based on your minimum repayment.

Keep all medical receipts, even those medical expenses partially reimbursed from your private insurance plan involves a tax deduction.

Keep all monthly/weekly public transit passes.

Keep all childcare expense receipts. Up to $5000 of childcare expenses can be claimed per child.

Keep all child fitness activities receipts. Up to $500 fitness activities may be claimed per child.

Position your investments tax efficiently. Capital gains and dividend income is taxed at lower rates than interest income. Keep all your low risk interest income earning investments inside an RRSP and/or TFSA.

If you are experiencing a life change, such as the birth of a baby or a marriage, make sure to take advantage of all tax benefits offered through the Government and start right away!

Don’t wait until next year to file your taxes and hope for a miracle! Proper tax planning does take a little bit of time and effort, but you will be rewarded financially if done correctly. Book an appointment with your Accountant today!

Posted in Tax Tips | Tagged , , , | Leave a comment