In this year’s Budget, the provincial government announced that the non-refundable tax credit provided to taxpayers who make qualifying donations to charity would be increased. The credit is a ...
The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
The Ontario Budget for the 2018-19 fiscal year, which was brought down on March 28, included the announcement of changes to the province’s personal income tax rate structure, with such changes h...
Previously announced changes to Ontario’s employment standards laws will take effect on April 1, 2018. The upcoming changes will, for the most part, affect temporary, part-time, and seasonal em...
The provincial government has announced that Ontario’s 2018-19 Budget will be brought down by the Minister of Finance on Wednesday, March 28 at around 4 p.m. Once the Budget is announced, the B...
The province of Ontario will provide the following personal tax credit amounts for 2018: Basic personal amount ……………………………...
The provincial government has announced that, effective as of March 1, 2018, unsolicited door-to-door sales of the following appliances will no longer be permitted: air cleaners, air conditioner...
The release of Ontario’s Third Quarter Finances report indicates that the province remains on track to balance the budget for the 2017-18 fiscal year, although the amount of the projected surplu...
The provincial government has announced that, effective for leases signed on or after April 30, 2018, residential landlords in Ontario will be required to use a new standard-form, plain-language lease...
For the 2018 tax year, the province of Ontario will levy personal income tax based on the following tax rates and brackets. 05% on taxable income between $10,354 and $42,960; 15% on taxable in...
The province of Ontario provides a number of refundable tax credits to individual residents of the province. Several of those credits are combined and paid as a single monthly benefit — the Onta...
The government of Ontario has announced the launch of its pre-budget consultation process leading to the release of the province’s 2018-19 Budget. That budget consultation process has several c...
The Canada Revenue Agency has released the 2017 T1 Individual Income Tax Return and Benefit form to be used by individuals who were residents of Ontario at the end of that year. The T1 form package (w...
The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
The Canada Revenue Agency (CRA) has issued the payroll deduction tables which Ontario employers will use to determine employee source deductions for federal and provincial income tax, Canada Pension P...
The Canada Revenue Agency has issued the Ontario TD1 form and worksheet which will be used by taxpayers resident in the province, and their employers, to determine required provincial income tax sourc...
The Ontario government has enacted a number of changes to the province’s employment standards laws, and those changes include the following: the Ontario minimum wage will increase to $14 per ...
The province of Ontario provided employers who hired and trained eligible apprentices in designated construction, industrial and motive power, and certain service trades with a refundable tax credit, ...
In the 2017 Economic and Fiscal Review issued on November 14, Ontario’s Minister of Finance announced that the provincial small business tax rate would be reduced, effective as of January 1, 201...
The provincial government has announced a new program – the Affordability Fund – which will “support” the free installation of energy-efficiency upgrades, which can include LED...
Earlier this year, a final report was issued by Ontario’s Changing Workplaces Review, which was charged with reviewing the province’s employment standards and labour relations legislation,...
The province of Ontario has announced a consultation process with respect to funding announcements to be made as part of the province’s 2018-19 Budget. The government will provide up to $5 mill...
The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
As of October 1, 2017, Ontario’s general minimum wage was increased from $11.40 per hour to $11.60 per hour. Increases will also take effect on that date to minimum wage rates payable to student...
The province of Ontario imposes a tax on any transfers of land which take place in the province, but first-time homebuyers can qualify for a full or partial refund of such tax paid. To claim a refund...
The province has released its final fiscal results for the 2016-7 fiscal year, and those results show a lower-than-projected deficit. That deficit stood at $991 million, which was $3.3 billion lower t...
As of September 1, 2017, changes to the law on residential tenancies will provide additional protection to Ontario tenants. Under current law, landlords are entitled to end a residential tenancy so t...
The Ontario government has released the province’s fiscal results for the first quarter (April 1- June 30) of the current (2017-2018) fiscal year. Those results indicate that the province is on...
As of October 1, 2017, the minimum wage payable in the province of Ontario will increase from $11.40 to $11.60 per hour. At the same time, the student minimum wage will be raised from $10.70 to $10.9...
The provincial government has announced that employment in the province grew by 25,500 jobs during the month of July. Most those were full-time positions, while approximately 8,000 were part-time jobs...
The Ontario government has announced that new rules will be put in place this fall to provide additional protections for condominium owners. The new rules generally require that condo owners be provi...
The provincial government has announced that changes will be made to the rules governing funding of defined benefit pension plans in Ontario. New funding requirements will require employers to make a...
The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
The Ontario government has announced that, effective for the 2018 calendar year, a cap of 1.8% will apply for purposes of rent increases on residential rental property in the province. That cap, which...
The Ontario government has announced that, as part of its overall revision of provincial employment standards laws, the availability of personal emergency leave to employees will be expanded. Under t...
The Ontario government has announced that changes will be made to the province’s employment standards legislation governing casual, part-time, temporary, and seasonal employees. The planned chan...
The province of Ontario has received the final report of its Changing Workplaces Review panel, which examined the province’s current employment standards laws. Following that review, a number of...
As announced in this year’s Budget, and effective for qualifying costs incurred for travel after July 1, 2017, the province will be providing Ontario seniors (aged 65 and older) with a refundabl...
The Ontario government provides residents of the province with a number of refundable tax credits (known collectively as the Ontario Trillium Benefit), which are delivered by means of monthly payments...
The province of Ontario has made significant changes to the financing of post-secondary education, and those changes will be in effect during the upcoming 2017-18 academic year. Effective with the st...
To address concerns with respect to recent growth in the price of homes in Southern Ontario, the province has proposed a new 15% tax on the sale of homes in that area of the province. The tax is to ap...
Ontario’s existing rent control legislation has been expanded, effective as of April 20, 2017, to cover all private rental housing in the province. Formerly, rent control measures, which impose...
The Ontario Minister of Finance has announced that the province’s 2017-18 Budget will be brought down on Thursday April 27, 2017. The Budget date announcement can be found on the Ontario Financ...
The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
The province of Ontario announces, before April1 of each year, the change in the minimum wage which will take effect on October 1 of that year. That change is based on increases in the province’...
The Ontario government has announced a plan – the “Fair Hydro Plan” – in which it commits to reducing residential hydro bills by an average of 25% and to limiting increases in ...
Ontario’s Ministry of Finance recently issued its report on the province’s 2016-17 Third Quarter Finances. The report indicates that Ontario is projecting a deficit of $1.9 billion for 20...
Ontario residents will soon be calculating their net income for 2016 in the course of preparing their 2016 income tax returns. That information can then be used to find which refundable provincial tax...
The province has announced the personal income tax credit amounts which will apply for the 2017 taxation year. They are as follows: Basic personal amount …………… ...
The Ontario government has announced that changes will be made to the rules governing the province’s payday loan industry, effective for loans made on or after January 1, 2017. The maximum tota...
The province of Ontario will impose individual income tax at the following rates and income brackets in 2017: 05% on taxable income between $10,171 and $42,201; 15% on taxable income between $42,2...
The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
As of January 1, 2017, the province of Ontario will require that all advertising that includes the price of travel must provide consumers with an all-in price. Specifically, any such advertising ...
Starting with the 2017-18 academic year, the province of Ontario will be providing free average tuition to students who have a family income of less than $50,000 per year. The provincial government h...
New rules which became law on December 5, 2016 will prohibit the expiry of consumer loyalty rewards points in Ontario. The implementing legislation is retroactive, meaning that such points that expire...
The 2016 Ontario Economic Outlook and Fiscal Review issued recently by the province included a number of changes to the province’s Land Transfer Tax (LTT). As of January 1, 2017, the government...
The Ontario Minister of Finance has announced that changes will made to the province’s Interactive Digital Media Tax Credit (OIDMTC). The OIDMTC is a refundable tax credit available to qualifyin...
As part of the 2016 Ontario Economic Outlook and Fiscal Review released on November 14, 2016, the provincial Minister of Finance announced that first-time home buyers in Ontario will receive an increa...
The provincial government has announced that a broad-based series of changes will be made to consumer protection laws in Ontario. Those changes will limit the maximum total cost of borrowing a payday...
The Ontario Ministry of Finance has issued final revenue and expenditures figures for the province’s 2015-16 fiscal year. Those figures show that the province’s deficit for that year was $...
The province of Ontario charges and pays interest on under and overpayments of tax at rates prescribed by statute at the beginning of each calendar quarter. The chart below sets out the credit and deb...
As announced earlier this year, Ontario’s minimum wage rate was increased, effective October 1, 2016. As of that date, the general minimum wage increased from $11.25 per hour to $11.40 per hour...
In the recent Throne Speech, the Ontario government announced that it would be providing a rebate program for residential consumers of electricity in the province. The rebate program will reduce the ...
Ontario seniors who wish to take advantage of the Healthy Homes Renovation Tax Credit will need to do so before the end of the year. As announced in this year’s provincial Budget, that program w...
Effective as of October 1, 2016, Ontario’s minimum wage will increase from the current rate of $11.25 per hour to $11.40 per hour. The minimum wage rate payable to students under the age of 18 w...
The province of Ontario provides a number of tax credits and benefits by way of direct payment to qualifying residents of the province. The current benefit year for such credits and benefits runs from...
The provincial government has announced the rent increase guideline which will apply to residential rental properties in the province during 2017. For that year, increases in rent levied for such pro...
The Ontario government provides eligible residents of the province with a number of tax credit programs which are administered as direct monthly payments to those who qualify. The next benefit year f...
The 2016-17 Ontario budget included an announcement of a major restructuring of the province’s financial assistance programs for students pursuing post-secondary education. As part of that rest...
For 2016, the province will provide the following non-refundable personal tax credit amounts. Basic personal amount …………………………&he...
Effective January 1, 2016, the provincial tax rates and income thresholds for Ontario are as follows: $0 to $41,536 – 5.05%; $41,537 to $83,075 – 9.15%; $83,076 to $150,000 – 11...
The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment for the month of March 2018 stood at 5.8%. The same rate was recorded for February 2018. E...
In its regularly scheduled interest rate announcement made on April 18, the Bank of Canada indicated that no change was required to current interest rates. Accordingly, the Bank Rate will remain at 1....
It is not uncommon for taxpayers to discover an error or omission in an already-filed return, and the usual means by which such error can be corrected is the filing of a T1-Adjustment form. While a co...
The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who receive income from the “sharing economy” that such income is taxable and must be reported on the annual tax return. ...
The Bank of Canada’s regularly scheduled interest rate announcement dates for the remainder of calendar year 2018 are as follows: April 18, 2018; May 30, 2018; July 11, 2018; S...
Proceeds received from the sale of one’s principal residence are, in most circumstances, not taxable, as such sales are eligible for the principal residence exemption. However, as of the 2016 ta...
The most recent release of Statistics Canada’s Consumer Price Index shows a sharp increase in inflation for the month of February. That rate stood at 2.2%, while the rate for January 2018 was 1....
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the second quarter of 2018, as well as the rates that will apply for the purpose...
While taxpayers fall victim to tax scams year-round, such scams are more prevalent during and just following tax filing season. During that time, taxpayers expect to hear from the tax authoritie...
In December 2017, the Canada Revenue Agency (CRA) announced that substantive changes would be made to the Agency’s Voluntary Disclosure Program (VDP). That program enables taxpayers who are in d...
The Canada Revenue Agency has issued its Guide RC4018, Electronic Filers Manual for 2017 Income Tax and Benefit Returns. That guide is for use by certified e-filers in filing individual income tax ret...
The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate for the month of February 2018. That rate declined from 5.9% in the mont...
The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation for the month of January 2018 stood at 1.7%. The rate for the previous month was 1.9%. I...
In its regularly scheduled interest rate announcement made on March 7, the Bank of Canada indicated that no change would be made to current interest rates. Accordingly, the bank rate remains at 1.5%. ...
Budget 2018: No personal tax credits have been repealed, and there are no new personal tax rate changes....
Budget 2018: Foreign-born Status Indians may now be eligible for child benefits, retroactive to 2005....
Budget 2018: Eligibility of specially trained service animals will be expanded for the purposes of the medical expense tax credit....
Budget 2018: Taxpayers will no longer need to apply when filing their return in order to receive the Canada Workers Benefit....
Budget 2018: The Working Income Tax Benefit amounts are enhanced as of 2019, and the credit is renamed the Canada Workers Benefit...
Budget 2018: The non-resident surplus stripping rules are tightened to address the use of partnerships and trusts....
Budget 2018: Where a CRA compliance order or information requirement is contested, a new rule will “stop the clock” to prevent the tax year from being statute barred....
Budget 2018: A corporation will have two RDTOH accounts going forward: eligible and non-eligible RDTOH....
Budget 2018: A corporation with $100,000 of investment income will have its small business limit reduced to $250,000....
Budget 2018: A corporation’s small business limit will be reduced where the corporation earns investment income exceeding $50,000....
The Canada Revenue Agency (CRA) provides a 1-800 telephone service to provide tax information to Canadian taxpayers. Such information can be general in nature, or can involve the specific tax affairs ...
The Canada Revenue Agency’s NETFILE service for filing of individual income tax returns will be available starting Monday February 26, 2018. Taxpayers do not need to obtain an access code to fi...
The most recent release of Statistics Canada’s Labor Force Survey shows a slight increase in the overall unemployment rate for the month of January. That rate rose by 0.1%, from 5.8% to 5.9%. T...
The Federal Minister of Finance has announced that the 2018-19 federal Budget will be brought down on Tuesday, February 27, 2018. The Budget will be released at around 4 p.m. and the full Budget Pape...
This year, the Canada Revenue Agency (CRA) will be providing taxpayers with hard copies of the 2017 Income Tax and Benefit package through a variety of means, and at various dates. Individuals who pa...
The Canada Revenue Agency (CRA) has announced the date on which NETFILE service for the filing of individual income tax returns for the 2017 tax year will be available. NETFILE service will be availa...
While the majority of Canadians now file their individual income tax returns electronically, there is still a significant minority of tax filers who file using a printed return. The Canada Revenue Ag...
The Canada Revenue Agency (CRA) has posted a notice on its website that an “update” has been made to individual 2017 tax forms. Those forms are to be used by individual Canadians to file t...
For a number of years, taxpayers whose tax situation was relatively straightforward were able to file their return by telephone. That service, which was called TELEFILE, was withdrawn a few years ago....
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2018, as well as the rates that will apply for the purpo...
As widely expected, the Bank of Canada indicated, in its regularly scheduled interest rate announcement made on January 17, that an increase in the bank rate was required. The Bank’s announceme...
Finance Canada has announced that the consultation process leading to the release of the 2018-19 federal Budget will conclude on Friday January 26, 2018. Canadians can provide input by submitting the...
The Canada Revenue Agency has released the T1 Individual Income Tax Return and Benefit form to be used by individual Canadian taxpayers in filing their return for the 2017 tax year. The T1 form is ava...
The most recent release of Statistics Canada’s Labour Force Survey indicates that the unemployment rate for the month of December 2017 stood at 5.7%. The last period for which that rate was reco...
As previously announced, the federal small business tax rate is reduced to 10.0%, effective as of January 1, 2018. There is no change in the federal small business limit, which remains at $500,000. T...
Finance Canada has announced the limits and thresholds which will apply for purposes of determining automobile benefits and deductions during 2018. Most such deduction limits and thresholds are uncha...
Planned changes to the federal income tax rules governing the taxation of small incorporated Canadian businesses are to take effect for 2018. One of those changes will include greater restrictions on ...
The Canada Revenue Agency (CRA) provides an administrative program under which taxpayers who have failed to file returns or pay taxes on a timely basis can bring their tax affairs into compliance, usu...
Taxpayers who are turning age 71 during the year and who have available contribution room are entitled to make a final RRSP contribution for that year. Such contributions must be made by the end of t...
Taxpayers who have not yet filed their return for the 2016 tax year will have until January 19, 2018 to file that return using NETFILE. Until that date, returns for the 2013, 2014, 2015, and 2016 tax ...
In its regularly scheduled interest rate announcement made on December 6, the Bank of Canada indicated that, in its view, no change is required to current rates. Accordingly, the bank rate remains at ...
The most recent release of Statistic’s Canada’s Labour Force Survey shows a slight decline in the overall unemployment for the month of November. That rate declined by 0.4%, to 5.9%. The N...
The Canada Revenue Agency has issued the 2018 version of its publication T4127(E), Payroll Deductions Formulas. The guide is intended for use by payroll software providers and by employers which manag...
The Canada Revenue Agency has issued the federal TD1 Form and Worksheet which will be used by taxpayers and their employers to determine required federal income tax source deductions for the upcoming ...
The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows an inflation rate of 1.4% for the month of October, as measured on a year-over-year basis. The equivalent rate for...
Finance Canada has begun the consultation process leading to the release of the 2018-19 federal Budget. As part of that budget consultation process, the Minister of Finance is holding in-person publi...
Effective as of January 8, 2018, administrators and representatives of qualifying Canadian trusts will be able to file trust income tax and information returns online, through the Canada Revenue Agenc...
The federal government has announced the premium rates and maximum insurable earnings amount which will be in place for the 2018 calendar year. The premium rate for the year for employees has been se...
The Canada Revenue Agency (CRA) has announced the contribution rates and amounts for both employers and employees which will apply for 2018. Maximum pensionable earnings for the year will be $55,900 ...
The most recent release of Statistics Canada’s Labour Force Survey shows a very small increase in the overall unemployment rate for the month of October. That rate was up by 0.1 percentage point...
The federal government provides lower-income working Canadians with a Working income tax benefit, with the amount of that benefit dependent on the taxpayer’s income for the year from all sources...
In its regularly scheduled interest rate announcement made on October 25, the Bank of Canada determined that no change was needed to current rates. Accordingly, the bank rate remains at 1.25%. In the...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of September, as measured on a year-over-year basis, stood at 1.6%. The...
Figures announced by the Minister of Finance in this week’s 2017 Economic and Fiscal Update show an improvement in the federal government’s financial outlook for the current and upcoming f...
Several months ago, the federal government proposed new rules which would significantly affect the taxation of private corporations. Those proposed rules generally sought to limit the ability of owner...
Finance Canada has announced that the federal small business tax rate, which is currently set at 10.5%, will be reduced in two stages. The first reduction will be effective as of January 1, 2018, whe...
Employees who work in the retail sector frequently receive a discount when purchasing goods sold by their employer. Recent press reports have indicated that the Canada Revenue Agency (CRA) had or woul...
The most recent release of Statistics Canada’s Labor Force Survey indicates that, for the month of September, employment across Canada was substantially unchanged. For that month, the unemploym...
Individual Canadians are sometimes required to provide proof of their income, often as part of an application for a mortgage or other form of credit. Such proof of income can be obtained from the Cana...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for 2017, as well as the rates that will apply for the purpose of calculating emp...
The most recent release of Statistics Canada’s Consumer Price Index shows an increase in the overall rate of inflation for the month of August. The inflation rate for that month stood at 1.4%, a...
The Minister of Finance has announced that a change will be made to the amount of Employment Insurance premiums to be paid, starting January 1, 2018. The Minister’s announcement, which can be f...
In its 2017-18 Budget, the federal government announced that it would be examining changes to the tax rules governing private corporations. More specifically, those changes would eliminate some of the...
Taxpayers who are receiving employment income and/or Old Age Security payments are entitled to request that tax deductions being made from those payments be reduced. Such requests are made using form...
The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate for the month of August. That rate declined by 0.1%, to 6.2%, which is t...
The Minister of National Revenue is authorized to provide relief to taxpayers from the imposition of penalties or interest in relation to tax amounts owed, under the Taxpayer Relief Program. Such rel...
In its regularly scheduled interest rate announcement made on September 6, the Bank of Canada announced that it was increasing its target for the overnight rate, and that the Bank Rate now stands at 1...
Finance Canada has announced that it has completed the first stage of its consultation with respect to the regulation of the federal financial sector. A consultation paper incorporating the comments ...
The third individual instalment payment of income taxes for 2017 is due and payable on Friday, September 15. Taxpayers who are subject to the instalment requirement will have received an Instalment Re...
Individual and corporate taxpayers can deal with the Canada Revenue Agency (CRA) and carry out most of their tax obligations online, through the CRA’s website. The Agency also provides a great d...
The most recent release of Statistics Canada’s Consumer Price Index indicates that the overall inflation rate for the month of July stood at 1.2%, as measured on a year-over-year basis. The comp...
During the month of August, the Canada Revenue Agency (CRA) will be issuing 2017 Tax Instalment Reminders, and many taxpayers will be receiving such Reminders for the first time. Individuals who need...
Individuals who have not yet filed their tax return for the 2016 tax year can still file that return using the Canada Revenue Agency’s (CRA’s) online filing service NETFILE. The NETFILE se...
The Canada Revenue Agency (CRA) has begun its annual tax return processing review, which seeks to confirm or verify that amounts reported by taxpayers on their 2016 income tax return were accurate and...
The most recent release of Statistics Canada’s Labour Force Survey shows a small decline of 0.2% in the overall unemployment rate for the month of July. That rate stood at 6.3% which was, as not...
As announced in this year’s Budget, the federal government has undertaken a consultation process with respect to tax planning strategies involving private corporations. As part of that consulta...
The Bank of Canada makes eight regularly scheduled interest rate announcements each year, and the Bank recently announced the dates on which those announcements will be made during 2018. Those dates a...
The federal government and many of the provinces provide child and family benefits through a number of programs, most of which are administered by the Canada Revenue Agency (CRA). For many programs, ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of June was 1%, while the rate posted for May stood at 1.3%. Both rates...
Owing to security concerns, the Canada Revenue Agency does not transmit personal tax information by e-mail, and most CRA correspondence is therefore sent and received by regular mail.The CRA does, how...
Finance Canada has announced that it will be holding public consultations with respect to planned changes to the tax rules governing private corporations.The planned changes will eliminate tax plannin...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight decline in the overall unemployment rate for the month of June. That rate stood at 6.5%, down by 0.1% from the p...
As expected, in its regularly scheduled interest rate announcement made on July 12, the Bank of Canada increased the bank rate from 0.75% to 1.0%. In the announcement of the rate increase, which can ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation slowed slightly during the month of May. The year-over-year rate for that month stood...
The Canada Revenue Agency (CRA) has announced that, following its consultation with respect to services provided by the Agency to small businesses, a number of new services will be provided. Those new...
As announced in this year’s federal Budget, effective July 1, 2017 self-employed commercial ride-sharing drivers who provide taxable supplies of ride-sharing services will be required ...
The Canada Revenue Agency has introduced a new feature to its existing EFILE service, which will allow EFILE service providers to submit adjustment requests using certified software. Currently, the ne...
As announced in the 2017 federal Budget, the federal tax credit for public transit costs is eliminated after June 2017. Taxpayers should note that the cancellation of the credit is effective for cost...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first three quarters of 2017, as well as the rates that will apply for th...
Canadian taxpayers who are in default of their filing and/or tax payment obligations can voluntarily disclose that default and have any associated penalties or interest charges waived under the federa...
The most recent release of Statistics Canada’s Labour Force Survey shows that, while employment rose by 55,000 during the month of May, the overall unemployment rate increased by 0.1%. That resu...
Determining whether a particular individual is an employee or a self-employed independent contractor can be difficult, and an employer’s responsibilities with respect to each are quite different...
The second instalment payment of individual income taxes for the 2017 tax year is due on or before Thursday June 15, 2017. Individual taxpayers who pay taxes by instalment will have received an instal...
The Canada Revenue Agency (CRA) has issued a reminder to all self-employed taxpayers and their spouses that their individual income tax returns for the 2016 tax year are due on or before Thursday June...
The federal government has announced the creation of a Famine Relief Fund in response to the famine and resulting humanitarian crisis which is occurring in Nigeria, Somalia, South Sudan, and Yemen. A...
In its regularly scheduled interest rate announcement made on May 24, the Bank of Canada indicated that, in its view, no change is need to current interest rates. Accordingly, the bank rate remains at...
The most recent release of Statistics Canada’s Consumer Price Survey shows that there was no change in the overall inflation rate during the month of April 2017. That rate stood at 1.6%, as meas...
Businesses can appoint someone else, often a tax professional, to deal with the Canada Revenue Agency (CRA) on their behalf. In order to have online access to tax information about the business, the r...
The Canada Revenue Agency (CRA) will be holding a webinar for employers on the subject of employee taxable benefits. The webinar will be held on Wednesday May 24, 2017. The webinar is free of charge,...
The Canada Revenue Agency (CRA) has issued a notice reminding Canadian taxpayers who have been affected by this spring’s floods of the availability of relief in relation to their tax filing and ...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight decrease in the overall unemployment rate for the month of April 2017, which dropped from 6.7% to 6.5%. The 6.5%...
Taxpayers who have unpaid tax balances for 2016 are subject to interest charges on those unpaid balances as of May 2, 2017. The current (until June 30, 2017) rate imposed on unpaid tax amounts by the...
This year’s federal Budget repealed and replaced several federal tax credits affecting caregivers of infirm and non-infirm family members. Those changes can in many cases affect the tax payable ...
The most recent release of Statistics Canada’s Consumer Price Index shows a drop in the overall inflation rate for the month of March 2017. The rate for that month stood at 1.6%, as measured on ...
For all individual Canadian taxpayers, the deadline for payment of tax amounts owed for the 2016 taxation year is midnight on Monday May 1, 2017. Payments which are not made in full by that deadline ...
The Canada Revenue Agency (CRA) has announced the prescribed interest rates which will apply for purposes of the leasing rules during the months of April and May 2017. They are as follows. April &hel...
The Canada Revenue Agency (CRA) has issued a reminder to taxpayers that all tax amounts owed by individuals for the 2016 tax year are due by the end of April 2017. Since April 30 falls on a Sunday thi...
In its regularly scheduled interest rate announcement made on April 12, 2017, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the bank rate remains ...
The most recent release of Statistics Canada’s Labour Force Survey shows a small increase in the unemployment rate for the month of March 2017. That rate rose by 0.1%, to 6.7%. Among demographi...
The federal government provides a Working Income Tax Benefit for lower-income Canadians who earn a minimum amount of income from employment or self-employment. The WITB is claimed on the annual tax r...
The Canada Revenue Agency (CRA) provides an Individual Income Tax Enquiries Line (reachable at 1-800-959 8281) for taxpayers who need general information about taxes, or have specific questions about ...
The most recent release of Statistics Canada’s Consumer Price Index indicates that the inflation rate for the month of February stood at 2%, as measured on a year-over-year basis. The comparable...
The federal Budget brought down on March 22, 2017 by Minister of Finance Bill Morneau included projections of a $28.5 billion deficit for the federal government for the current (2017-18) fiscal year. ...
The Budget 2017 documents revealed that the government has been undergoing further reviews of various planning strategies relating to the use of private corporations that reduce personal income taxes ...
Effective July 1, 2017, Budget 2017 proposes to extend the GST/HST on taxi operators to ride-sharing services. Taxi operators are required to collect and remit GST/HST on their fares with no dollar ex...
Generally, taxpayers are required to include the value of their work in progress (“WIP”) in their income whether or not they have actually received payment for performing the work. H...
If a taxpayer receives a loan by virtue of their employment with an interest rate below a prescribed rate, he or she is deemed to have received a taxable benefit. However, taxpayers can claim an offse...
Budget 2017 proposes to expand the medical tax credit to include costs paid for the purpose of conceiving a child regardless of whether the medical procedures involved are not medically indicated due ...
Budget 2017 announced that the public transit tax credit will be repealed as of July 1, 2017. The non-refundable credit provided a 15% tax reduction with respect to eligible public transit passes such...
Budget 2017 proposes to amend the eligibility criteria for the disability tax credit. One of the conditions required for the credit is that a medical practitioner certifies on CRA Form T2201 that the ...
The Canada Revenue Agency (CRA) has announced that a link is now available between its website and that of Service Canada, for users of online services at both sites. Canadian taxpayers can carry out...
The Canada Revenue Agency (CRA) has issued a notice indicating that its online services have been restored, and that taxpayers are once again able to file their 2016 tax returns online, make payments,...
Individual investors in flow-through shares can claim a 15% federal Mineral Exploration Tax Credit. That federal tax credit was scheduled to expire as of March 31, 2017, but Finance Canada has announc...
The Minister of Finance has announced that the 2017-18 federal Budget will be brought down on Wednesday, March 22, 2017. The announcement of the Budget date can be found on the Finance Canada website ...
In its regularly scheduled interest rate announcement made on March 1, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Accordingly, the bank rate remain...
The most recent release of Statistics Canada’s Consumer Price Index shows a sharp increase in the rate of inflation during the month of January. That rate stood at 2.1%, as measured on a year ov...
The Canada Revenue Agency (CRA) has announced that, effective as of February 20, 2017, EFILE service providers will be able to submit T1 adjustments for clients online, using their EFILE software. Th...
The Canada Revenue Agency (CRA) has announced that its online NETFILE service for the filing of individual income tax returns is now available. NETFILE can be used to file individual tax returns for ...
The Canada Revenue Agency (CRA) formerly mailed hard copies of the individual income tax return form and guide to Canadian taxpayers, but that service is no longer provided. Taxpayers can, however, ob...
The most recent release of Statistics Canada’s Labour Force Survey indicates that the overall unemployment rate fell slightly during the month of January 2017. That rate fell by 0.1%, from 6.9% ...
The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns for the 2016 tax year will be available for use beginning on Monday, February 20,...
Recently, the Canada Revenue Agency (CRA) announced that encrypted data containing 2014 income tax information for 28,000 residents of the Yukon had been lost in transit. There is currently, according...
The Canada Revenue Agency (CRA) has released the T2 Corporation Income Tax Return Form to be used by corporations for the 2016 tax year. The federal T2 is used by all federal, provincial, and territo...
The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will apply for the first quarter of 2017. Those rates are as follows: January ……&hell...
The Canada Revenue Agency has indicated that an indexing factor of 1.4% will apply to federal individual income tax brackets for the 2017 tax year. The personal income tax brackets and rates which wil...
The most recent release of Statistics Canada’s Consumer Price Index (CPI) indicates that the rate of inflation for December 2016 stood at 1.5%, as measured on a year-over-year basis. Inflationa...
Qualifying taxpayers can claim, on their annual returns, the cost of deductible vehicle and meal expenses incurred during the year. Taxpayers have the option of claiming either actual expenses incurre...
In its scheduled interest rate decision made on January 16, the Bank of Canada (BOC) announced that, in its view, no change was needed to current rates. Accordingly, the bank rate remains at 0.75%. &...
The Canada Revenue Agency’s (CRA) NETFILE service will be available for NETFILING of individual income tax returns for the 2013, 2014, and 2015 taxation years until January 20, 2017. After that...
The most recent release of Statistics Canada’s Labour Force Survey indicates that employment rose by 54,000 jobs during the month of December 2016, as the result of gains in full-time work. Des...
The Canada Revenue Agency will be holding a three-part webinar series on the source deduction obligations of employers. The webinars are free of charge, but pre-registration is required.The dates and ...
The Canada Revenue Agency has announced that 2016 General Income Tax and Benefit package for the 2016 taxation year will be available on its website as of Thursday, January 5.The package, once availab...
The Canada Revenue Agency (CRA) has issued a listing of the administrative improvements and changes which will be in place for the upcoming 2017 filing season.Some of the changes include the following...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2017, as well as the rates that will apply for the purpo...
Many Canadians who do not have income tax deducted from their paycheques at source pay such tax by quarterly instalments, on the 15th day of March, June, September, and December. Individuals who make...
The Canada Revenue Agency (CRA) has announced that it will be conducting a GST/HST compliance letter campaign pilot project over the next 9 months. As part of that project, the Agency will send 250 l...
As expected, the Bank of Canada made no change to current interest rates in its announcement made on December 7. Consequently, the bank rate remains at 0.75%. In its announcement, which can be found ...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate declined slightly during November, dropping from 7% to 6.8%. During November, employm...
The Canada Revenue Agency (CRA) regularly holds webinars for businesses on how to fulfill their payroll reporting and remittance obligations. The last in the current series of such webinars, which wi...
The Canada Revenue Agency (CRA) has been conducting an online consultation process with respect to the rules governing the political activities of charities. Those rules impose limits on the kinds of ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation stood at 1.5% for the month of October, as measured on a year-over-year basis. The year-over-...
The Canada Revenue Agency (CRA) has issued the 2017 version of its publication T4127, which outlines and summarizes the payroll deductions formulas for computer programs which will be used beginning J...
As of October 2016, changes were made to standard correspondence sent to business owners by the Canada Revenue Agency (CRA). Specifically, the CRA will be providing businesses with two new, simplified...
The federal government has announced the Employment Insurance premium rates which will apply for the 2017 calendar year. Total insurable earnings for the year have been set at $51,300. Employee premi...
The Canada Revenue Agency (CRA) has announced the contribution rates and amounts which will apply for the 2017 calendar year. Maximum pensionable earnings for that year have been set at $55,300, and t...
The most recent release of Statistics Canada’s Labour Force Survey shows that, while employment during the month of October increased by 44,000 jobs, the unemployment rate was unchanged at 7%. ...
In his Fall Economic Statement, the Minister of Finance announced that the federal government will post a deficit of $25.1 billion for the 2016-17 fiscal year. The full Fall Economic Statement can be...
In its most recent announcement, the Bank of Canada indicated that in its view, no change was required to current interest rates. Accordingly, the bank rate remains at 0.75%. In the press release ann...
The most recent release of Statistics Canada’s Consumer Price Index shows an inflation rate of 1.3% for the month of September, as measured on a year-over-year basis. Prices for the month were ...
The federal Minister of Finance has announced that the 2016 Fall Economic and Fiscal Update will be released on Tuesday November 1, 2016. The Fiscal Update papers will be posted on the Finance Canada...
The Canada Revenue Agency (CRA) has announced the launch of public consultations on the rules regarding the involvement of registered charities in political activities. To that end, a consultation pan...
The Canada Revenue Agency (CRA) has announced that it will be holding consultations with small and medium sized businesses, starting this fall, on the delivery of services by the CRA. Those consultati...
Final revenue and expenditure figures for the 2015-16 fiscal year have been released by the Department of Finance. Those figures show that the federal government posted a budgetary deficit of $1 billi...
The Canada Revenue Agency (CRA) has launched a new mobile app — My Benefits CRA — which will enable Canadians to view personalized benefit and credit information on mobile devices. With t...
The Minister of Finance has announced the start of the consultation process for the 2017-18 federal Budget. Interested stakeholders can take part in that consultation process in a number of ways, inc...
The Canada Revenue Agency (CRA) has announced the interest rates that will apply to amounts owed to and by the federal government for 2016, as well as the rates that will apply for the ...
The Canada Revenue Agency (CRA) has issued a reminder to Canadians that those who are receiving benefits and credits (like the Canada Child Benefit or the Harmonized Sales Tax Credit) may be asked by ...
The federal government has announced that employment insurance premiums paid by employers and employees will be reduced for 2017. The change in premiums follows a report by the Office of the Superinte...
Beginning in 2016, teachers and early childhood educators who purchase school supplies for use in their classrooms will be able to claim a 15% refundable federal tax credit on up to $1,000 worth of su...
The federal Department of Finance has announced the launch of the first stage of a consultation process to be carried out with respect to the governance of the federal financial sector. Individuals o...
The Department of Finance has issued the August release of The Fiscal Monitor, which outlines the revenue and expense figures for the federal government for the first quarter of fiscal 2016-17. Durin...
Canadian taxpayers who are required to provide proof of their income can obtain a proof of income statement from the Canada Revenue Agency (CRA), either online or by telephone. Taxpayers who have reg...
As of July 2016, the former Universal Child Care Benefit (UCCB) and the Child Tax Benefit (CTB) were replaced by the new Canada Child Benefit (CCB), a non-taxable, means-tested benefit paid to Canadia...
The benefit year for many federal and provincial tax credit and benefit programs (including the new Canada Child Benefit and the harmonized sales tax/goods and services tax credit) runs from July 2016...
Canadian families that have children under the age of 18 will notice a difference in their federal government child benefit starting in July. As of this month, the existing Canada Child Tax Benefit (C...
A number of tax rate and credit changes, both federal and provincial, will take effect on July 1, 2016. As well, tax changes which were announced this year to take effect as from January 1, 2016 will ...
In its regularly scheduled interest rate announcement made on January 20, the Bank of Canada indicated that no change would be made to current interest rates. Consequently, the bank rate remains at 0....
Dollar amounts on which individual non-refundable federal tax credits for 2016 are based, and the actual tax credit claimable, will be as follows. &n...
Effective January 1, 2016, maximum insurable earnings for purposes of the Employment Insurance program will increase from $49,500 to $50,800. This means that an insured worker will pay EI premiums in ...
Virtually no one looks forward to dealing with the need to file a tax return each spring, and while some of that reluctance is undoubtedly due to the complexity of our tax system, there’s another factor at work.
Many (even most) taxpayers don’t know, until they have actually completed their return for the year, whether additional taxes will be owed. And, no matter what the taxpayer’s financial circumstances, finding out that money is owed to the tax authorities is bad news.
Virtually no one looks forward to dealing with the need to file a tax return each spring, and while some of that reluctance is undoubtedly due to the complexity of our tax system, there’s another factor at work.
Many (even most) taxpayers don’t know, until they have actually completed their return for the year, whether additional taxes will be owed. And, no matter what the taxpayer’s financial circumstances, finding out that money is owed to the tax authorities is bad news.
For many taxpayers that bad news can create a real cash flow crunch. Statistics show that a substantial number of Canadians and Canadian families live paycheque to paycheque, and so would not be in a financial position to manage an unexpected tax bill, especially where that bill is due in the next few weeks. For a number of reasons, the better approach for such taxpayers is to try to obtain the necessary funds from private sources. For those who don’t have the means to pay a tax bill out of existing resources, that likely means borrowing the needed funds. While that means paying interest on the borrowing, the interest cost incurred will likely be less than that which would be levied by the Canada Revenue Agency (CRA).
If a tax bill can’t be paid in full out of either current resources or available credit, the CRA is open to making a payment arrangement with the taxpayer. While the CRA would rather get paid on time and in full, its ultimate goal is to collect the full amount of taxes owed. Consequently, the CRA provides taxpayers who simply can’t pay their bill for the year on time and in full with the option of paying an amount owed over time, through a payment arrangement.
There are two avenues available to taxpayers who want to propose such a payment arrangement. The first is a call to the CRA’s TeleArrangement service at 1-866-256-1147. When making such a call, it is necessary for the taxpayer to provide his or her social insurance number, date of birth, and the amount entered on line 150 of the last tax return for which the taxpayer received a Notice of Assessment. (For taxpayers who are up to date on their tax filings, that will be the Notice of Assessment for the return for the 2016 tax year). The TeleArrangement Service is available Monday to Friday, from 7 a.m. to 10 p.m. EST.
Taxpayers who would rather speak directly to a CRA employee can call the Agency’s debt management call centre at 1-888-863-8657. That centre is open Monday to Friday from 7 a.m. to 11 p.m. EST.
No matter what payment arrangement is made, the CRA will levy interest charges on any amount of tax owed for the 2017 tax year which is not paid on or before April 30, 2018. Interest charges levied by the CRA tend to add up quickly, for two reasons. First, the interest charged by the CRA on outstanding tax amounts is, by law, higher than current commercial rates. For the second quarter of 2018 (April 1 to June 30), that rate is 6%. Second, interest charges levied by the CRA are compounded daily, meaning that each day interest is levied on the previous day’s interest charges. It is for these reasons that a taxpayer is, where at all possible, likely better off arranging private borrowing in order to pay any taxes owing by the April 30 deadline.
Finally, there is one strategy which is, in all circumstances, a bad one. Taxpayers who can’t pay their tax bill by the deadline sometimes conclude that there is no point in filing if payment can’t be made. Those taxpayers are wrong. Where an amount of tax is owed and the return isn’t filed on time, there is an immediate tax penalty imposed of 5% of the outstanding tax amount – and interest charges start accruing on that penalty amount (as well as on the outstanding tax balance) immediately. For each month that the return isn’t filed, a further penalty of 1% of the outstanding tax amount is charged, to a maximum of 12 months. Higher penalty amounts are charged, for a longer period, where the taxpayer has incurred a late-filing penalty within the past three years. In a worst-case scenario, the total penalty charges can be 50% of the tax amount owed – and that doesn’t count the compound interest which is levied on all penalty amounts. In all cases, no matter what the circumstances, the right answer is to file one’s tax return on time. This year, for most taxpayers, that means filing on or before Monday April 30, 2018. For self-employed taxpayers (and their spouses) the filing deadline is Friday June 15, 2018. However for all taxpayers, the payment deadline for all 2017 income tax owed is Monday, April 30, 2018.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The reach of Canada’s system is broad – residents of Canada are taxed on their world-wide income, and the income or capital amounts that escape the Canadian tax net are few and far between.
One of the most significant of those exceptions, particularly for individual Canadian taxpayers, is the “principal residence exemption”. Plainly put, when a Canadian taxpayer sells his or her home, the proceeds of sale are not included in his or her income for the year (and therefore not taxed), no matter how much that home has appreciated in value since it was acquired. And, of course, given the real estate market conditions that have prevailed in recent years, especially in some urban centers, the difference between the original cost of the family home and its later sale price can be very substantial.
The reach of Canada’s system is broad – residents of Canada are taxed on their world-wide income, and the income or capital amounts that escape the Canadian tax net are few and far between.
One of the most significant of those exceptions, particularly for individual Canadian taxpayers, is the “principal residence exemption”. Plainly put, when a Canadian taxpayer sells his or her home, the proceeds of sale are not included in his or her income for the year (and therefore not taxed), no matter how much that home has appreciated in value since it was acquired. And, of course, given the real estate market conditions that have prevailed in recent years, especially in some urban centers, the difference between the original cost of the family home and its later sale price can be very substantial.
There are good reasons for the favourable tax treatment that is accorded family homes (or “principal residences, in tax parlance). A home is often the largest financial asset owned by an individual or a family, and for many Canadians, home ownership forms the basis of their overall financial plan and, often, their retirement plans.
As is always the case in tax, definitions matter. And, for purposes of the principal residence exemption, such principal residence can be any one of the following types of properties:
- house;
- cottage;
- condominium;
- apartment in an apartment building;
- apartment in a duplex; or
- a trailer, mobile home, or houseboat.
In order to claim the principal residence exemption on the sale of one’s home, of whatever description, it’s also necessary that the taxpayer own the property (alone or jointly with another person, usually a spouse), has used that property as his or her principal residence at some point during the year, and designate the property as the principal residence on the tax return for the year of sale.
The reference to a tax return may be puzzling to taxpayers who have sold homes but never made any designation on their return for the year. However, concerns about speculation in the housing market led the federal government, in 2016, to make changes which would provide it with more information with respect to properties that were changing hands and on which the principal residence exemption was being claimed. As of 2016 (and subsequent years) taxpayers who sell their homes must complete and include Schedule 3 Capital Gains (or Losses) with their return for the year of sale. And, as of the 2017 tax year, they must also file Form T2091(IND) Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust). That form, which is not included in the General Income Tax Return package for 2017, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2091ind.html.
On the T2091, the taxpayer must provide the following information:
- the address of the property;
- the year the property was acquired; and
- the amount for which the property was sold.
The taxpayer must also certify the number of years the property sold was used as a principal residence during the period of ownership.
None of these new rules or requirements alter the basic tax treatment of the sale of a principal residence – the proceeds of sale of a property that was used throughout the period of ownership as the only principal residence of a Canadian resident remain tax-free. The only thing that has changed is the requirement to report on the sale, providing information on the number of years of ownership and the sale price, and certifying the number of those years of ownership during which the property was used as one’s principal residence.
Where the property sold was acquired after 1981 and was used during the entire period of ownership as a principal residence of a Canadian resident, the reporting requirements are relatively straightforward. There are, however, some other situations in which determining whether and to what extent monies received on the sale of one’s home will qualify for the principal residence exemption is more complex, and professional advice may be warranted.
First, prior to 1982, it was possible for each spouse in a marriage to claim the principal residence exemption. Typically, one spouse would claim the exemption on the family home, while the other spouse would claim the exemption with respect to the family cottage. The rules changed in 1982 to eliminate that practice. Consequently, where a married taxpayer is selling a property which was purchased prior to 1982 and a principal residence exemption was previously claimed on a second property which the taxpayer and his or her spouse owned, it would be prudent to obtain professional tax advice on the proper reporting of the current sale.
As well, the principal residence exemption is available only to residents of Canada. Where the person selling a principal residence was a non-resident at any time during the period of ownership, the amount of principal residence exemption claimable may be affected.
A taxpayer who sells a principal residence during the year must report that sale on Schedule 3 to the Return, and that Schedule is always filed as part of the Return, regardless of the filing method used. However, the filing requirements with respect to the T2091 form differ, depending on how the taxpayer files his or her return. Where a return is paper-filed, the T2091 must be completed, signed and filed with the return. Where the taxpayer uses any of the electronic filing requirements, the T2091 is not filed with the return, but must be kept and produced if the CRA requests it.
Finally, the requirement to report the details of the sale of a principal residence is a relatively new one. The obligation to do so is not particularly well known and there is nothing in the 2017 Income Tax Guide to alert taxpayers to that requirement. It is, therefore, entirely possible that an affected taxpayer will be unaware of such requirement and will fail to report. And, since the tax authorities have no way of knowing that a sale of a principal residence has taken place, it’s unlikely that they would ask for that information in the course of assessing the return. Such failure is, however, relatively easily remedied – the taxpayer need only (once the Notice of Assessment for the return has been received) file a T1 Adjustment in which the necessary information is provided. Generally, the CRA will accept that amendment to the return, but it does have the power to impose a penalty for the initial failure to report. That penalty is equal to $100 per month during which the reporting is late, to a maximum of $8,000.
More information on the new reporting requirements can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/sale-your-principal-residence.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
While everyone knows that the best results are obtained when tax and financial planning take place on an ongoing basis, the reality is that most Canadians focus on their tax situation only once a year, at tax filing time. And the harsher reality is that, by then, the opportunity to take steps which will make a significant difference in one’s tax liability for 2017 is lost.
While everyone knows that the best results are obtained when tax and financial planning take place on an ongoing basis, the reality is that most Canadians focus on their tax situation only once a year, at tax filing time. And the harsher reality is that, by then, the opportunity to take steps which will make a significant difference in one’s tax liability for 2017 is lost.
Most actions needed to reduce one’s tax payable for the 2017 tax year – making political contributions, selling investments at a loss, or paying professional or union dues which qualify for a credit or deduction – must have been taken on or before December 31, 2017. And the last such opportunity – making an RRSP contribution to be claimed on the 2017 return – vanished after the RRSP contribution deadline of March 1, 2018.
That said, all is not lost for taxpayers seeking to reduce their tax burden for 2017. There are a number of factors to consider, and a few strategies to contemplate, when completing the return for 2017. Those considerations and strategies, which generally involve the timing of claims made (or not made) on the return can make a measurable difference in the amount of tax payable for the year.
It may seem counterintuitive, or even illogical, to not claim every available deduction and credit in order to obtain the best possible tax result for the year. However, for both medical and charitable tax credit claims, albeit for different reasons, there are situations in which it makes sense to defer an available claim until a future year, or to transfer the claim to another person.
Claiming charitable donations
Taxpayers are entitled to make a claim on the annual tax return for charitable donations made in the current (2017) year or any of the previous five years. The reason it can sometimes makes sense not to claim a charitable donation in the year it was made arises from the way in which the charitable donations tax credit is structured to encourage higher donations.
That credit, at both the federal and provincial/territorial levels, is a two-tier credit. Federally, the first $200 in donations receives a credit of 15% of the total donation, or $30. However, donations above the $200 level receive a credit equal to 29% of the donation amount over $200.
Take, for example, a taxpayer who contributes $1,200 to a charity each year. Where he or she claims that donation on the annual return each year, that claim will result in a federal credit of $320 ($200 × 15%, plus $1000 × 29%). Where, however, the same taxpayer defers the claim to the following year and claims a total of $2,400 in donations on a single return, he or she will receive a federal credit of $668. ($200 × 15%, plus $2,200 × 29%). Where the donations are accumulated and claimed once every five years, the federal credit received will be $1,712 ($200 × 15%, plus $5,800 × 29%). Under each scenario, the total charitable donation made is the same, but the amount of credit received increases with each year that the claim is deferred. Since each of the provinces and territories provide a two-tier credit (at different rates, depending on the jurisdiction), the same result will be seen when calculating the provincial/territorial credit.
Medical expense tax credit
Notwithstanding our publicly funded health care system, there are a great (and increasing) number of medical and para-medical expenses for which coverage is not provided and which must be paid on an out-of-pocket basis. In many instances, it’s possible to claim a medical expense tax credit for those out-of-pocket costs.
The federal credit for such expenses is 15% of allowable expenses. As is usually the case, the provinces and territories also provide a credit for the same expenses, albeit at different rates.
Many taxpayers find the rules on the calculation of a medical tax credit claim confusing, with some justification. First, there is an income threshold imposed. Eligible medical expenses are those expenses which exceed 3% of net income, or (for 2017) $2,268, whichever is less. Put in more practical terms, the rule for 2017 is that any taxpayer whose net income is less than $75,500 will be entitled to claim medical expenses that are greater than 3% of his or her net income for the year. Those having income over $75,500 will be limited to claiming qualifying expenses which exceed the $2,268 threshold.
The other aspect of the medical expense tax credit which can be confusing is the calculation of the optimal time period. Unlike most credit claims, the medical expense tax credit can be claimed for qualifying expenses which were paid in any 12-month period ending during the tax year. While confusing, such rule is beneficial, in that it allows taxpayers to select the particular 12-month period during which medical expenses (and the resulting credit claim) is highest. The only restrictions are that the selected 12-month period must end during the calendar year for which the return is being filed and, of course, any expenses which were claimed on a previous return cannot be claimed again.
While only expenses which exceed the $2,268/3% threshold may be claimed, it is also possible to aggregate expenses incurred within a family and make a single claim for those expenses on the return of one spouse. Specifically, the rules allow families to aggregate medical expenses incurred for each spouse and for all children born in 2000 or later. While medical expenses incurred by a single family member might not be enough to allow him or her to make claim, aggregating those expenses is very likely (especially for a family that does have private medical insurance coverage) to mean that total expenses will exceed the applicable threshold.
In determining who will make the medical tax credit claim for a family, there are two points to remember. Since total medical expenses claimable are those which exceed the 3% of net income/$2,268 threshold, whichever is less, the greatest benefit will be obtained if the spouse with the lower income makes the claim for total family medical expenses. However, the medical expense credit is a non-refundable one, meaning that it can reduce tax otherwise payable, but cannot create (or increase) a refund. Therefore, it’s necessary that the spouse making the claim have tax payable for the year of at least as much as the credit to be obtained, in order to make full use of that credit.
Finally, there are a huge number and variety of medical expenses which individuals and families may incur, and the rules governing which can be claimed and in what circumstances, are very specific. In some cases, for instance, a doctor’s prescription will be required, while in others it will not. A listing of medical expenses eligible for the credit, and any ancillary requirements, such as a prescription, can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-330-331-eligible-medical-expenses-you-claim-on-your-tax-return.html#mdcl_xpns.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The rules surrounding income tax are complicated and it can seem that for every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2017 must be remitted to the Canada Revenue Agency (CRA) on or before Monday, April 30, 2018. No exceptions and, absent extraordinary circumstances, no extensions.
The rules surrounding income tax are complicated and it can seem that for every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2017 must be remitted to the Canada Revenue Agency (CRA) on or before Monday, April 30, 2018. No exceptions and, absent extraordinary circumstances, no extensions.
Perhaps not surprisingly, the CRA tries to make it as easy as possible for taxpayers to remit what they owe, by providing a wide range of methods by which payment can be made. There are, in fact, no fewer than seven separate options available to individual residents of Canada in paying their taxes for the 2017 tax year. The options open to taxpayers who must make a payment to the taxman are set out below.
Pay using online banking
Millions of Canadians do most or all of their banking using the online services of their particular financial institution. The list of financial institutions through which a payment can be made to the CRA is a lengthy one (available at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-online-banking.html), and includes all of Canada’s major banks and credit unions.
The specific steps involved in making that payment will differ slightly for each financial institution, depending on how their online payment systems are configured. What’s important to remember is that the nature of the payment (i.e., current year tax return, as distinct from current year tax instalment payments) must be specified, and the taxpayer’s social insurance number must be provided, in order to ensure that the payment is credited to the correct account.
It is not necessary to access any particular CRA form in order to make an online payment of taxes through one’s financial institution.
Paying at your financial institution
For those who don’t use online banking, or simply prefer to make a payment in person, it is possible to pay a tax amount owed at the bank. Doing so, however, requires that the taxpayer have a personalized remittance form.
Since that remittance is specific to the taxpayer, it’s not possible to simply print that form from the CRA website. However, taxpayers who wish to obtain such a personalized remittance form can do so by calling the CRA’s Individual Income Tax Enquiries line at 1-800-959 8281 and requesting that one be sent to them by mail.
Using the CRA’s My Payment
The CRA also provides an online payment service called My Payment. There is no fee charged for the service, and it’s not necessary to be registered for any of the CRA’s other online services in order to use My Payment.
What is necessary is that the taxpayer have a debit card with a VISA Debit, Debit MasterCard, or InteracOnline logo from a participating Canadian financial institution, as My Payment is set up to accept payment using only those cards. Anyone intending to use My Payment should first confirm that the amount of any payment to be made is within the daily or weekly transaction limits imposed by the particular financial institution.
A list of participating financial institutions for each type of card, and more details on this payment method, can be found at https://www.canada.ca/en/revenue-agency/services/e-services/payment-save-time-pay-online.html.
Payment by credit card
While it is possible to pay one’s taxes using a credit card, such payments can only be made through third-party service providers (that is, payments by credit card cannot be made directly to the CRA), and such third-party service providers will impose a fee for the service.
There are only two such service providers listed on the CRA website, and links to each are available at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-credit-card.html.
Payment through a service provider
There are a number of third party service providers which will accept payments and remit them on the taxpayer’s behalf to the CRA. However, the majority of such services are more oriented toward providing services to businesses, and most of those listed on the CRA website do not handle payments of individual income tax amounts owed.
The full listing of third-party service providers can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-a-service-provider.html.
Payment by pre-authorized debit
It’s possible to set up a pre-authorized debit (PAD) arrangement with the CRA, authorizing them to debit the account for an amount of taxes owed, on dates specified by the taxpayer.
Individuals who make instalment payments of tax throughout the year may already have such an arrangement in place and can certainly use that existing arrangement to arrange a PAD of any balance of taxes owed for the 2017 tax year. However, any such arrangement must be made at least five business days before the payment due date of April 30. A taxpayer who makes a payment of taxes only once a year is likely better off using another of the available payment methods.
This year, there is another option for taxpayers who have their return prepared and E-FILED by an authorized electronic filer. Such taxpayers can have that E-FILER set up a PAD agreement on their behalf in order to make a “one-time” payment for a current year tax amount owed. Details on how to make that arrangement are outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-authorized-debit.html.
Payment by cash or debit card
It is still possible to pay one’s taxes in cash, or by using a debit card. Such payments are made, not at CRA offices, but at Canada Post outlets.
However, while a cash payment may be a low-tech option, the requirements for making a cash or debit card payment are not. In order to do so, the taxpayer will need a self-generated QR (quick response) code. Such code can be created by following a link found on the CRA website at https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/pay-canada-post.html. The QR code created is provided to a clerk at a Canada Post outlet, who uses the information in the code to properly credit the payment made. Service fees are levied for this payment method.
It’s important for all taxpayers to realize that the payment deadline of April 30 requires that the CRA receive payment by that date. The Agency considers that a payment has been made only when it actually receives that payment, or the payment is received by a member of the Canadian Payments Association (which would include most Canadian financial institutions).
The majority of payment options now available to Canadians involve online transactions or the use of third party service providers. Both such methods can mean some delay in receipt of the payment by the CRA, as a result of the time required for processing of the payment by the financial institution or third party. Consequently, taxpayers who make their tax payments online or using a third-party service provider are well advised to consider that time lag in deciding when to make their payment; waiting until April 30 to do so likely isn’t a good idea.
Those who make their payment in person at a financial institution (using a personalized remittance form, as outlined above) can make their payment on April 30, as the date stamped on the remittance form is considered to be the date on which such payment is received by the CRA.
The number and variety of tax payment methods available to individual taxpayers can, in and of itself, be somewhat confusing. The CRA provides a chart on its website identifying each possible payment method, and the kinds of payments which can be made through each. That chart can be found at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/determine-your-payment-method.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.
Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues. They can be accessed below.
Corporate:
Personal:
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.
Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.
Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues. They can be accessed below.
Corporate:
Personal:
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
For most Canadians, having to pay for legal services is an infrequent occurrence, and most Canadians would like to keep it that way. In many instances, the need to seek out and obtain legal services (and to pay for them) is associated with life’s more unwelcome occurrences and experiences — a divorce, a dispute over a family estate, or a job loss. About the only thing that mitigates the pain of paying legal fees (apart, hopefully, from a successful resolution of the problem that created the need for legal advice) would be being able to claim a tax credit or deduction for the fees paid.
For most Canadians, having to pay for legal services is an infrequent occurrence, and most Canadians would like to keep it that way. In many instances, the need to seek out and obtain legal services (and to pay for them) is associated with life’s more unwelcome occurrences and experiences — a divorce, a dispute over a family estate, or a job loss. About the only thing that mitigates the pain of paying legal fees (apart, hopefully, from a successful resolution of the problem that created the need for legal advice) would be being able to claim a tax credit or deduction for the fees paid.
Unfortunately, while there are some circumstances in which such a deduction can be claimed, those circumstances don’t usually include the routine reasons — purchasing a home, getting a divorce, establishing custody rights, or seeking legal advice about the disposition of a family estate — for which most Canadians incur legal fees. Generally, personal (as distinct from business-related) legal fees become deductible for most Canadian taxpayers only where they are seeking to recover amounts which they believe are owed to them, particularly where those amounts involved employment or employment-related income or, in some cases, family support obligations.
The first situation in which legal fees paid may be deductible is that of an employee seeking to collect (or to establish a right to collect) salary or wages. In all Canadian provinces and territories, employment standards laws provide that an employee who is about to lose his or her job (for reasons not involving fault on the part of the employee) is entitled to receive a specified amount of notice, or salary or wages equivalent to such notice. In many cases, however, the employee can establish a right to a period of notice (or payment in lieu) greater than the statutory minimum. The amount of notice or payment in lieu of notice which is payable can then become a matter of negotiation between the employer and its former employee, and such negotiations usually involve legal representation and, consequently, legal fees. In that situation, legal fees incurred by the employee to establish a right to amounts allegedly owed by the employer are deductible by that former employee. If a court action is necessary and the Court requires the employer to reimburse its former employee for some or all of the legal fees incurred, the amount of that reimbursement must be subtracted from any deduction claimed. In other words, the former employee can claim a deduction only for legal fees which he or she was personally required to pay and for which he or she was not reimbursed.
In some situations, an employee or former employee seeks legal help in order to collect or to establish a right to collect a retiring allowance or pension benefits. In such situations, the legal fees incurred can be deducted, up to the total amount of the retiring allowance or pension income actually received for that year. Where part of the retiring allowance or pension benefits received in a particular year is contributed to an RRSP or registered pension plan, the amount contributed must be subtracted from the total amount received when calculating the maximum allowable deduction for legal fees. However, where all legal fees incurred can’t be claimed in the current year, they can be carried forward and claimed on the return for any of the 7 subsequent tax years.
The rules covering the deduction of legal fees incurred where an employee claims amounts from an employer or former employer are relatively straightforward. The same, unfortunately, cannot be said for the rules governing the deductibility of legal fees paid in connection with family support obligations. Those rules have evolved over the past number of years in a somewhat piecemeal fashion. The current rules are as follows.
Legal fees incurred by either party in the course of negotiating a separation agreement or obtaining a divorce are not deductible. Such fees paid to establish child custody or visitation rights are similarly not deductible by either parent.
Where, however, one former spouse has the right to receive support payments from the other, there are circumstances in which legal fees paid in connection with that right are deductible. Specifically, legal fees paid for the following purposes will be deductible by the person receiving those support payments:
- collecting late support payments;
- establishing the amount of support payments from a current or former spouse or common-law partner;
- establishing the amount of support payments from the legal parent of that person’s child (who is not a current or former spouse or common-law partner). However, in these circumstances the deduction is allowed only where the support is payable under a court order, not simply under the terms of an agreement between the parties;
- seeking an increase in support payments; or
- seeking an order making child support amounts received non-taxable.
On the payment side of the support payment/receipt equation, the situation is not so favourable, as a deduction for legal fees incurred will not generally not be allowed to a person paying support. More specifically, as outlined on the Canada Revenue Agency (CRA) website, a person paying support cannot claim legal fees incurred in order to “establish, negotiate or contest the amount of support payments”.
Finally, where the CRA reviews or challenges income amounts, deductions, or credits reported or claimed by a taxpayer for a tax year, any fees (which in this case includes accounting fees) paid for advice or assistance in dealing with the CRA’s review, assessment or reassessment, or in objecting to that assessment or reassessment, can be deducted by the taxpayer. A deduction can similarly be claimed where the taxpayer incurs such fees in relation to a dispute involving employment insurance, the Canada Pension Plan or the Quebec Pension Plan.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
How to check: At the home page press “F2”. Just below “Product Information” you’ll see “Product” and the type of Quickbooks you are using. If at the end of the product type it says Release R5P that tells us that you are using the 2010 version and if it says R7P then it’s 2009.
FOR QUICKBOOKS “2009”
1. Go to “Lists” (at top of page) – then select “Sales Tax Code List” add new code H
2. Under “Sales Tax Code” (bottom) select “New”
3. Sales Tax Code would be “H” – Description would be “HST” – check off “Taxable” – under Taxable information in the “Tax Item for Purchases” type in HST on Purchases (ITC)
4. A box will come up “Item Not Found, Quickbooks does not have sales information for ‘HST on Purchases’. Would you like to add it now? If not, please go back and select an existing sales tax. – Choose “Yes”.
5. The a new box will come up “New Item”. The “Type” should be Sales Tax Item – under the Sales Tax Name, type in “HST on Purchases (ITC)” and in the “Description” box the “HST on Purchases (ITC) should automatically pop in. Under “Tax Rate (%) or Amt” change the “0.0%” to 13%, and under “Tax Agency (vendor that you collect for)” choose “Receiver General”. Then where it has “Sales Tax Line” choose the pull down and select “Line 106 Input tax Credits (ITCs) “. Then select “OK”
6. The “New Item” box will close and you will have the box “New Sales Tax Code” box showing. At the bottom where it says “Tax Item for Sale” choose the pull down and select “Add New”. Follow the instructions in #5 above with the following exceptions “Sales Tax Name” should be “HST on sales”, the Description should be “HST on sales” and the “Sales Tax Return Line” in the pull down you should select “Line 103 GST/HST collected or collectible” then select “OK”
7. The “New Sales Tax Code” box will now be visible, just select “OK”. Then you’ll see the “Sales Tax Code List” just exit from that.
8. On July 1, 2010 you must go to “Lists” – “Item List”, double click on the name of the 1st item. An “Edit Item” box comes up. Down near the bottom right you’ll see “Tax Code”. Change that to “H” as in “HST”. You will need to do this to each item in your Item List.
NOTE: If you have customers you sell to, who do not have the 13% HST as Ontario/BC you then need to create additional tax codes i.e. 0% (exempt). Then when you edit the “Item List” you would put the appropriate tax code with the item name.
FOR QUICKBOOKS “2010”
1. Go to “Sales Tax” (at top of page), select “Manage Sales Tax”
2. Click on “Change Tax Setup” on the right side under “Sales Tax Setup”
3. In the “Sales Tax Code Setup Wizard” tick on the last item “Set up for British Columbia and/or Ontario”. Select Finish
4. The “Convert your sales tax to HST” box will come up. Beside (1) Set up HST British Columbia , look down just a bit and you’ll see “Set up HST for Ontario” – click and a box “Sales Tax Code Created – A new sales tax code H, has been created for HST in ON.”, click on OK
5. Under #2 “Update default sales tax code, select the “H” from the pull down
6. Do not perform Item #3 “Change the sales tax codes for lists and accounts” if prior to July 1st. If it is July 1st then continue onto Step 7 below.
If Steps 2 to 5 was performed prior to July 1st then go to “Sales Tax”, “Manage Sales Tax”, click on “Assign Tax Codes” on the right hand side. Continue on
7. Select “Change the sales tax codes for lists and accounts”.
8. You’ll see “Items” beside “change tax codes for:” If you go to the pop down you’ll also see Vendors, Customers and Accounts. In each category you can change each listing individually or you can do a “Bulk Change”. If you are going to be using strictly HST you can do everything in bulk, but you may have to do it more than once in each category if you had previously used “S” Standard, “E” Exempt, or “P” PST. Even after the bulk change you can go and change an individual item. To perform the assigning of the tax codes, under “Items” press “Bulk Change”. A “Backup Company” warning will come up. We highly recommend that you create a backup at this point (Note this warning will come up each time you wish to perform the bulk change. It is your choice whether to do another backup or not). Click “Yes” if you wish to make that backup.
After back up is complete you’ll get a box called “Sales Tax Code Bulk Assignment”, with each listing of what needs to be changed. Recommend that you do each listing individually so that you can follow what is happening. Tick the first box “Sales Item”. If previously, you had a lot of “G”s for GST then pick G in the pull down and then select "H" for HST for the going “to”. Click “Next”. You’ll then get a warning telling you what you are about to do, with what and with the number of changes being made. You can then go back to review if you wish or press “Next”. If press next the changes will be made. You can then go and make additional changes to the “Sale Tax Code” or you then go on to the other listings: Purchase Tax Code, Vendors, Customers and Accounts.
9. When all have been performed, press “Close” and “Close”.