Update Message for Arbutus Tax Clients

Hi folks. I hope this email finds you well and in good spirits in these challenging times. 

I was not intending to send out another update but things have changed considerably since the tax season started.The following quote is from the CRA website. 

“New tax filing and payment due dates

The due date for filing individual tax returns has been extended to June 1, 2020. Taxpayers will have until September 1, 2020 to pay any 2019 income tax amounts owed.

You will be able to apply for the new Emergency Support and Emergency Care benefits in My Account or using the dedicated phone line starting April 2020.”

More on doing taxes further down this email.

You may or may not have noticed that the office has been closed down temporarily.  How long I do not know weeks and perhaps months as long as this virus situation remains.  No doubt it is a serious health threat and for some it is deadly.   Especially for those of us with compromised immune systems as well as the age factor. 

It does appear anyone can get it and some even do not know as they have mild symptoms.  So I do not want to risk your life or mine. Everyone’s life is affected by it.

You can follow this on the CBC website as well as others:

https://www.cbc.ca/news/coronavirus-guide-explainer-1.5497009

If you do not want to click on that you can google cbc guide to covid-19 There is some relief coming to certain individuals and industries etc.

Back to the tax situation which is not the essential service like grocers, health care workers and others on the front line.  I am working with a number of clients by email to do what I can to file their taxes.  If you have a printer and scanner that will help. A clear photo also perhaps.

I would like to deal with as little paper as possible and back and forth emails I want to avoid also.  Some things can easily be missed in that situation.

I can access most slips such as T4s,T3s,T5s if they have been posted.  I do not have access to some RRSP contributions, some late filings for T3s and security transactions.   Medical receipts and donations, you would need to total them and only give an amount that you are out of pocket. For rentals and business, I would need you to email me the total income and expenses into categories as shown on the arbutustax.com website under small business or rentals.

If need be, but first contact me, to drop off the limited amount of paperwork to mailbox 2A to the right hand side of the front door to the building. I would need to allow 3 to 7 days before opening them.   

There can be many forms to sign so all of this is time consuming and you should have at least a printer to print what is needed.

Be safe and well!

Cheers

Eugene

Arbutus Tax Hours and Annual Client Update

The following income tax client update was recently sent out but perhaps all did not receive it  Changes continue with income tax deductions and credits, not all items can be detailed here.   Check the Arbutus Tax website for more information as well as the CRA website.  Saturday hours will likely be added in March.  Will be posted on the website later on. 

 

Hi Folks. I hope all is well. Thanks for being a client of Arbutus Tax, it is appreciated.

Efiling is a bit later this year, a number of files are ready to file on Feb.26th. Once you have the slips and forms please come in as soon as you can.

 

We are once again open at 9:30AM to 5:30PM Monday to Friday for drop in/drop off your info. Mornings are usually the best time to drop off or pick up and pay.

 

For payment we prefer debit or cash due to the high fees charged for credit cards and special points cards.

 

With the authorization taken for most we can check online and download them from CRA website. However some slips arrive late. Deadline for sending out T4s, T5s is end of Feb. For T3s and securities end of March. Some file early and some wait until the end. Let us know what slips you have or are waiting for. Best not to miss a slip, I have seen CRA charge a $250 penalty for that.

 

Investments such as sale of securities have to be accounted for. Institutions report any sales and not always do they show the cost or adjusted cost. They report on T5008 the sale amount if they are sharp they will show the cost. They may also issue a statement of realized gains or losses which we can use or perhaps on your annual statement. Check with your security advisor if in doubt.

 

Any sale of residence has to be reported now. Sale price, address and date of purchase required.

 

If you are a first time home buyer let us know.

 

RRSP contributions slips or withdrawals (T4RSP) are also important if you have them.

 

Changes in marital status and address, do you want online mail, are you signed up for it already or want to add this instead of postal mail for CRA notices?

 

You can set up an account at CRA website, MyAccount to view your information online or to make changes for address and direct deposit.

 

Deadline is the usual April 30th and for small business June 15th but tax owing in both cases is April 30th.

 

That is it for now. If you have any questions please let me know. I try to answer emails as soon as possible and if there are only a question or two it is sometimes more convenient than playing telephone tag.

 

Thanks

Eugene

Arbutus Tax Services

250-999-8585

Feb Update Arbutus Tax News

The tax season is now going with Efiling having commenced Feb 20th for the 2016 tax year right back to 2013.  For some reason they dropped Efiling for 2012 and that along with prior years now must be paper filed, which we can do, of course.

 

Thanks to all our clients for continuing to support Arbutus Tax Services, a local small business in Victoria.

 

With each tax year, there are changes to be aware of.

 

One of the changes is the new rules concerning sale of residence:  http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/rsdnc/menu-eng.html  Check this link for more details.

 

For 2016 you must indicate on the tax return if you have sold or not.  “When you sell your home, you may realize a capital gain. If the property was your principal residence for every year you owned it, you do not have to report the sale on your income tax and benefit return.” But there are special situations such as having rented the property or used it for business income.

 

A change of address is possible when the current tax return is filed.  Make sure that everything is updated including change in marital status and dependents.

 

Yes, you may be able to do your own tax return.  There are software programs for this or you can still paper file. But it can be a challenge to keep up with the changes and also doing it only once a year can have some drawbacks. Knowing all the rules or most of them can be a challenge and sometimes meaningful friends can be helpful or not.  Smile 

 

I have seen quite a few errors being made and have helped with fixing these, but I am sure others have had no issues.  Missing something can be costly as you may be able to save with deductions or credits and have to pay more tax than necessary or face penalties for not reporting something.

 

CRA advises to be careful in not claiming things your are not entitled to, also continuous business losses can result in reassessment and disallowing those losses.   

 

You can also register online to check your details and manage your account with Canada Revenue Agency, CRA : http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/myccnt/menu-eng.html   There is much information to be had there.

 

For many of our clients having completed the form T1013, Authorizing or Cancelling a Representative, gives us access to your account at CRA.  This allows us to complete a return based upon the information on file at CRA.  It is also important to note, not all forms may have been registered yet at the CRA, such as T4s, T3s, T5s, T4RIFs, T4RSPs etc. Other things have to be done manually such as donations, medical expenses, employment expenses and if a small business T2125 must be completed.

 

Some forms are not out until the end of Feb or March.  Investments take longer T3s and if you have sold securities get a statement from you investment company which show sales and purchases, usually a Statement of Realized Gains or Losses.  I am finding more of the T5008 forms being reported by the financial institutions and the client not being aware.  If in doubt ask your financial adviser or institution.  This is very important for accurate reporting to avoid missing reporting this and getting penalties and interest.  For losses you can carry them forward or back. This applies to securities held outside RRSP or TFSA.   

 

For existing clients, we can have most of your return ahead of time also to save time to complete the return and saving you from running back and forth. 

 

Some family credits to be aware of are here: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170214-eng.html

 

First time home buyers may take advantage of t $5000 credit and we assist with this.  Just let us know and we will check this out.

 

It is important to file on time and we suggest doing this as early as possible to avoid the rush and to avoid penalties and interest. 

 

If you want to have the CRA email you for notices and assessments that can be done by providing your email address before Efiling.  However this means signing up at MyAccount on the CRA website and you will need a password.   Register above at the MyAccount link. 

NOTE: By doing so you will NOT receive paper notices and must check your account online for future notices.

 

Keep all receipts and slips for at least 6 years.  For medical receipts if you have many, ask your pharmacy for a printout of the receipt totals for the year.  That will save time and money. 

 

Pension splitting is sometimes missed by seniors filling out their own forms so make sure this gets claimed.  We will do this automatically for the optimized amount.  This can save thousands of dollars.

 

If you have questions please give us a call at 250-999-8585. Also email us, see our contact link on the main page.  It is sometimes quicker by email rather than playing telephone tab.  Smile

 

Okay that is it for now.  I have not covered everything for sure.

 

Cheers

 

Eugene Veinotte

Arbutus Tax Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

More Income Tax Changes That May Affect You Now and in the Future

Taxpayers with children will notice that the family tax cut is gone for 2016.  Enhanced child care tax free benefits (CCB) have been introduced along with increases in UCCB. The family tax cut or split elimination does not affect the pension tax split enjoyed by many seniors. That is still in effect. If you missed the pension split adjustments can be made back 3 years. 

Principal Residence Exemption (PRE)

Home ownership and taxes has just become much more complicated.  Sale of your house or cottage, change in usage such as converting your house to a rental property or from rental property to personal use will result in having to report this on your tax return.  Failure to report this can be costly if you have not done so and adjustments to your previous tax returns would be needed.  Even if your home was used strictly as your principal residence for all the years you have owned it, if you sell or change the usage of it in 2016 and going forward, this has to be reported on Schedule 3 of the tax return.

 

Tax Free Savings Accounts TFSA

For 2016 the contribution amount is $5,500. If you do not use it or the previous amount you may not have contributed you do not lose that and can make up for it in future years. While you do not get a tax deduction for TFSA all gains within the TFSA are tax free and that includes withdrawals. Pay attention to your limit and do not exceed that or you will face penalties and interest. The tax of 1% per month will continue to apply for each month that the excess amount remains in the TFSA. 

 

Child Fitness Amount and Children’s Art Tax Credit

Effective for the 2016 taxation year, the maximum eligible amount per child will be reduced to $500 from $1,000 for the children’s fitness tax credit (which will remain refundable for 2016) and to $250 from $500 for the children’s arts tax credit. The supplemental amounts for children eligible for the disability tax credit will remain at $500 for both credits for 2016. 

Effective for the 2017 and subsequent taxation years, both credits will be eliminated.

 

Child-care expenses

The amount parents can claim for child-care expenses has increased by $1,000 annually, per child, to $8,000 for a child under six and $5,000 for a child aged between seven and 16 years old.

 

Canada Apprentice Loan

Students in a designated Red Seal trade program can now claim interest on their government student loans.

 

My Account For Individuals

Log in or register above to check your account at the CRA for assessments, limits, carry forwards and other information.   

 

This is for information only and subject to change at any time.  Canada Revenue Agency, CRA, has this and other tax information posted on their website.

 

 

 

 

 

 

 

 

 

 

Income Tax Changes Child Care Benefits, UCCB and Notes

TAX CHANGES

Significant changes have been made to the child benefits.  The $2000+ tax credit per child has been eliminated. As well the Universal Child Benefit (UCCB) amount has changed. UCCB bonus plus enhanced UCCB payments may result in paying more tax as a result of these changes.  For those with children you may need to complete a new TD1 with your employer.  Complicating matters some of the new changes came in the middle of the tax year.

Changes for UCCB for children under 6 to $160 per month per child, plus UCCB for children ages 6 to 17 in the amount of $60 per month per child. For prior years the amount of UCCB was $100 per month for children under the age of 6 from 2006 onward.

Child Care Benefits, CCB. Under the new CCB, families with children under the age of six will receive as much as $6,400 per child per year. Families with kids between six and 17 will receive a maximum of $5,400 annually under the new plan.  Families with net income below $30,000 per year will receive the maximum and families earning more than $200,000 per year will see their payments eliminated. The CCB is not taxable so this is tax free income. 

 

If you missed claiming benefits in prior years or to discuss your situation give them a call. Phone: 1-800-387-1193. For general enquiries call the CRA at 1-800-959-8281

Additional Information can be found here. 

Child and family benefits

In most cases once you are in the system and receiving benefits they should continue if you make sure your taxes are filed each year.  Failure to file a tax return usually results in your benefits being cut off until you do file. Then you should get catch-up payment.  But do not wait too long.  Each year you will need to update your dependant information on your tax return.

If you receive a call from anyone at CRA I suggest you note the phone number and call the general enquiry number before giving out any information to avoid any of the scams going around.    

 

 

 

 

 

 

 

 

 

 

 

Missing Income Tax Information Very Important

NOTE:  Missing Tax Information Very Important

Every year there are changes at the CRA and potential tax filings.  This year there is a great deal more information being reported on the CRA website. I imagine this is going to lead to a crack down on things that have not been reported in the past as the CRA endeavours to collect more tax revenue.  They can go back and reassess files for previous years.

Please ensure you have all your slips (T4s, T4A, RRSP, T3s, T5s and such tax information.  If you signed a T1013 with me I can access most of your information that has been reported to CRA. But not all information is shown or not the complete information. So everything still must be checked.  Even with the new auto-download feature, not all information is showing up.

Securities Disposed of:

This year I am finding a lot of this with many clients not being aware of any securities being disposed of. There appears to be some communication issue but ultimately you are responsible to provide the information for securities disposed of.  Securities include stocks, bonds, mutual funds etc. If you have a managed account with a broker or financial institution this may apply to you even if you are not aware of it. They may be trading securities in your account. That can result in capital gains or losses.

If you deal with anyone who provides advice or manages your finances there is a good chance that this may apply to you.  Please talk with your financial advisor.  Some financial institutions provide better information than others.  If you do your own trading you will need to come up with the information yourself.

Banks and financial institutions must report to the CRA any securities disposed of shown as a form T5008.  If they only show the amounts sold you will pay 100% tax on that amount.  You may need to get a Statement of Realized Gains or Losses sometimes called Securities Disposed of or find all the slips when the securities were bought for the cost/book value, that could go back years. Sometimes it will show on an annual statement.  They may give you a song and dance about the form number or name but they do know what this means and that you need to disclose it to Canada Revenue Agency. If they do not know, then you are likely dealing with a novice and perhaps you should consider asking to speak with someone senior who does know. 


These firms make a great deal of money and must notify the CRA for anything sold.  But for some reason they do not have to provide the cost or book value details.  They should at least do the same for you including a providing a statement showing the cost or book value.

Failure to report this can result in fines and interest costs being levied by the CRA.  This must be part of their mission statement these days.  Crying face