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Canadian taxes

Taxes

Self Employed? Your Tax Deadline Is Coming

Here are some of the most common questions:

  • Do I need a business number? – You do not need a business number to report business income on a T2125 Form. This form records your business income and expenses as part of your personal return. And you need to pay CPP premiums if you earned more than $3,500.
  • Can I have losses? – You can have losses on your business that can be used to offset other income. If the losses exceed your income from other sources, you have a non-capital loss which can be carried forward to years when you have more income.

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May 20, 2011
Taxes

Last Minute Tax Tips

  • Avoid the late filing penalty: Even if you can’t pay your balance owing, file your tax return by the deadline. It will save you the late filing penalty.
  • Both spouses should file: Make sure you or your spouse or common-law partner file a tax return on time if you want to begin or continue receiving the Canada Child Tax Benefit payment.

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April 27, 2011
Taxes

Top 7 Ways To Trigger A CRA Review

Forget a T slip: You are required to report all your income. The Canada Revenue Agency (CRA) receives copies of all the T slips issued, so if you forget, misplace or hide a T slip, it will inevitably be uncovered by their matching program and result in a reassessment. Do this twice in a two-year period and you will be looking at substantial penalties.

Your business looks like a hobby: The CRA does not expect every new enterprise to make a profit their first few years in business. However, you cannot create a business for the purpose of creating losses. There must be some reasonable expectation of profit in future years. If you claim year after year of losses, you may be answering questions about your business plan from a CRA auditor.

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March 16, 2011
Taxes

Three Out Of Four Canadians Fail The H&R Block Tax Quiz

Lack of tax knowledge could mean missed credits and money left on the table

Canadians may be leaving money on the table at tax time because they do not have a good understanding of what can be claimed on their tax returns. Less than 25 per cent of Canadians provided the right answers when asked questions about their tax returns, according toa recent survey by Leger Marketing for H&R Block Canada.

“No matter how you decide to prepare your tax return, you need an understanding of which credits and deductions you can claim and how to report them accurately,” says Cleo Hamel, Senior Tax Analyst, H&R Block Canada. “No one wants to pay the government more tax than absolutely necessary, so Canadians should make sure their return includes all their deductions and credits.”

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March 1, 2011
Taxes

Read Smart Tax Tips Before Filing Your Taxes

Smart Tax Tips: Winning Strategies To Reduce Your Taxes by Grant Thornton

Before you file your taxes for 2010, I would recommend that you skim through Grant Thornton’s book titled Smart Tax Tips. The book is chock full of ways you can maximize your tax savings.

A major benefit to reading this book is to help you understand what tax credits and tax deductions are available for Canadians.  The book includes information about the Child Tax Credit, Disability Tax Credit, the Eligible Dependant Credit, and many more.   By reading this book you may discover a way to save a lot of money in taxes that you didn’t even realize was available to you.

The book also contains a lot of important information about Registered Retirement Savings Plans (RRSPs), including what happens if you overcontribute, how the carry forward rules work, etc.

There is also information about Old Age Security clawbacks, pension income splitting, and tips on how to effectively use a Tax Free Savings Account (TFSA).

If you have children, you will benefit from reading about what childcare expenses are eligible for tax deductions.  You might be surprised at how many expenses are actually eligible, even including some after school recreational activities if the fees are incurred in order to allow a parent to work.  It is worth your time as parents to dig deeper and minimize your tax bill.

This book is written to help out both young and old in managing their tax bill.  I would recommend this book to anyone interested in learning how to reduce their taxes and who wants to have a better understanding of our complicated tax system.  Be sure to select the most updated version of this book so you are reading the most accurate and up to date information, the cover will say that it has been updated for 2010.

January 18, 2011