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A new program at the Canada Revenue Agency that promises to pay informants who help track down tax cheats — a first in Canada — has generated a flurry of more than 1,000 calls leading to nearly 100 active cases, the Financial Post has learned.

Some 300 of the initial calls were from “informants,” according to the CRA.

“The early call and submission statistics indicate that there is interest on the part of informants to participate in this program and we are actively pursuing a number of files,” said Philippe Brideau, a spokesperson for the tax agency.

The CRA established the incentive-backed program in January to crack down on international tax evasion and “aggressive tax avoidance.”

The Offshore Tax Informant Program, or OTIP, holds out the promise of financial awards for individuals who provide information that leads to the collection of taxes owed due to “major international tax non-compliance.”

No cash awards have been paid so far by the CRA, whose program is the first in Canada to promote financial rewards in exchange for useful tips.

But the early response “sounds quite promising,” said Mark Blumberg, a partner with Toronto law firm Blumberg Segal LLP who has frequent dealings with the CRA on behalf of his clients in the charity and non-profit sector.

He said his one concern is that Canada’s tax agency, which has been the subject of recent cutbacks, won’t have sufficient resources to track down and fully investigate the leads.

“The key is not how many calls come in but how the CRA pursues those,” Mr. Blumberg said, adding that the cases the agency is after are likely to be quite complicated.

Incentive-based “whistleblower” programs like the CRA’s can be expensive and time-consuming to operate because the promise of money tends to bring scores of tips that must be chased down, experts say.

The incentives can even prompt “frivolous claims and induce people to fabricate or exaggerate concerns just to receive a financial reward,” said Jennifer Pacella, an assistant professor at City University of New York, whose focus is whistleblower programs. “The potential for clogging the system may be significant,” she said.

Nevertheless, the practice of paying for tips is well established in the United States.

The U.S. Internal Revenue Service has a similar incentive-backed program to the CRA’s, as do the Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission.

On Monday, the SEC’s director of enforcement announced the regulatory agency would pay out $30-million to a whistleblower, the largest award since the program was introduced in 2010.

“This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement,” the SEC’s Andrew Ceresney said.

The SEC received more than 3,200 tips last year, up 7% from the year before.

Canada’s largest securities regulator, the Ontario Securities Commission, has been considering introducing a rewards-backed whistleblower program since 2010. So far, the initiative has not advanced beyond the study stage.

The OSC plans to publish a “concept” paper this fall and invite input from interested parties that will “inform the direction the commission ultimately takes.”

Source: Financial Post

Parents are generally searching for indicators that their children have the tools to succeed in life. That they’re moving in the ideal direction. That they can take care of themselves.
When it comes to economic understanding and dollars management, there’s a lot to worry about. Ontario students continue to struggle with math, the most up-to-date provincial standardized tests show. Their parents aren’t undertaking so well either. The ratio of household debt to disposable earnings approached a record this spring. It may well make you wonder regardless of whether you’ve been a good teacher.
Right here are five indicators that your youngsters are heading in the proper direction.

They pass the Marshmallow Test: This experiment from the 1960s was all about impulse handle. Four-year-olds had been left in a space with a single marshmallow on the table. If they could hold off and not eat it, they’ll get two at the end of the test.
Some waited less than a minute, others held out. The psychologist who did the study followed the youngsters into their 40s and located the longer they delayed their gratification when they had been four, the superior they did in later life.
If your youngsters can save now to devote later, they’re nicely on their way. It could be an allowance, birthday funds, or cash from a part-time job.
“Saving demands an ability to push off quick reward for future benefit,” says Avidan Milevsky, a psychology professor at the University of Pennsylvania. “Children and teens who are able to delay gratification are much more likely to grow up financially productive.”

They get the massive image: Are they curious and ask concerns? Is there a capacity to step back and wait to see what doors open and close based on their current decision?
Cindy Crean, a senior wealth manager with Sun Life Worldwide Investments, says subtle signs a bigger image is missing are spending on impulse, lacking motivation to get a portion-time job and relying on handouts from parents.
Frank Wiginton, a economic planner and author of How to Consume an Elephant, says asking inquiries about dollar matters is important because it shows the young person is interested in the monetary target and desires to know how to get there sooner.

They’re organized: We’re not talking about a clean space, although that would be good, but the potential to figure out the methods to attaining a purpose no matter if significant purchases, trips, a new laptop, or smartphone.
Financial achievement is closely linked to being able to budget, which needs organization,” says Moshe Milevsky, Avidan Milevsky’s brother. Milevsky has taught finance to undergraduates and graduates at York University for 20 years.
“Scattered and haphazard undergraduate youngsters have a difficult time carrying out that,” he says.

They see how math aids: Individual finance is about uncomplicated math. Some little ones bail out of math in higher school because they’re afraid of it, or see it as disconnected from actual life. Solving quadratic equations doesn’t assist you in realizing credit card interest or inform you which phone strategy is a improved deal.
But closing the math door, cuts off an understanding of a vital life ability. It doesn’t mean arts students can’t succeed just that they’re much less exposed to the fundamentals and could be much less comfy with the ideas.
Not everyone agrees. Patricia White, executive director of Credit Counselling Canada, isn’t sure the arts-math divide is so reduce and dried.
“My little ones are adults and one was superb in math. But they both understood the concept of saving,” she says. “My daughter who was not excellent with math makes use of a spreadsheet to track her spending and has a budget for every little thing. My son is also fantastic with funds but not necessarily mainly because of the math.”

You lead by example: Your little ones know if you struggle to pay the bills, can’t look to save something and are normally scrambling to make ends meet. If your line of credit keeps you afloat and you pay for everything with a credit card, they know that as well.
On the other hand, if you only invest what you can afford and have money for emergencies, you send a different message, says Chris Buttigieg, a senior wealth planning manager with BMO Economic Group.
Talking about investments and exploring the pros, cons and charges of many household expenses also make awareness and generate interest in economic decisions.
In the end, monetary literacy creates the expertise to assist young individuals in making responsible financial decisions with confidence.

Source: The Toronto Star

The average Canadian family spends more on taxes than on food, shelter and clothing combined,a new study released today by the Fraser Institute, a Canadian public policy think-tank that focuses on free markets and government policies targeting consumers.

“If you asked people to name their household’s biggest expense, many would likely say housing, but in reality, the average Canadian family spends more on taxes than all basic necessities including housing,” the report’s author Charles Lammam said of the paper, which tracks the total tax bill of the average Canadian family from 1961 to 2013.

In 2013, the study says the average Canadian family earned $77,381 and paid $32,369 in total taxes (or 41.8 per cent of income) compared to 36.1 per cent for food, shelter and clothing combined, the paper found.

By comparison, in 1961, the average family earned approximately $5,000 and spent much more of its income on food, shelter and clothing (56.5 per cent), while $1,675 went to taxes (33.5 per cent).

But not everyone agrees with the Fraser Institute’s analysis. “Those numbers are not directly comparable,” said Peter Dungan, an economist at the Rotman School of Management. “First, in 1961 we did not have medicare,” he said. The report’s starting year baseline begins in 1961, the first year that the federal government started paying for a national health-care plan, first known as medicare and later brought under the umbrella of the Canada Health Act.

Moving the onus of health-care spending from individuals onto the state has put a major cost on the backs of taxpayers along the way, which may be showing up in the Fraser Institute’s report. According to recent numbers by consultancy Mercer, health-care spending was less than $100 per person in the early 1960s, 57 per cent of which was covered by government. But by 2010, per capita health spending had jumped to $5,614, of which 70 per cent was paid for by Ottawa.

Other big ticket items such as the Canada Pension Plan and Old Age Security didn’t even exist in 1961.

Dungan points to higher education as another factor that needs to be taken into consideration. “At that point, many Canadians did not even finish high school, let alone go to university or college.… Part of what’s included in the increase in taxes, is an increase in educational taxes.”

Other criticisms

Canada’s booming oil and gas industry over the past 50 years is also a factor. “Included in those government revenues are royalties on oil and gas, which were not nearly as high then,” said Dungan. He added that in addition to taking inflation into consideration, analysts must also consider the relative price of oil and gas as well as the sheer amount that Canada exports today. “The Fraser Institute counts those as taxes.”

Dungan adds that we should also take into consideration that, relatively speaking, food has become less expensive, and many consumer goods are less-expensive imports.

“The report is very misleading,” said Iglika Ivanova, economist at the Canadian Centre for Policy Alternatives. “It grossly overestimates the tax bill of the average Canadian family because of their methodology. They include things such as business taxes and import duties in the bill of the average family.

“There is lots of research, mainly from the US, that business tax is largely paid by shareholders, little is paid by workers … the average Canadian family is not a large shareholder,” said Ivanova.

Lammam says it is fair to include business taxes because those taxes trickle down to Canadian families in the form of reduced wages, higher prices and lower investment returns.

“Corporations are pieces of paper, but it’s regular people that pay these taxes,” he said in an interview with the CBC on Tuesday.

The Fraser Institute’s measure of an “average Canadian” is also flawed, says Ivanova. “We need to look at the distributional issues as to who is paying for what. Averages are becoming less and less meaningful. What does it mean when you have such large disparity? … We’ve eroded tax fairness. This is a much bigger concern for me versus the size of the tax bill.”

Rising tax burden

All in all, the report’s total tax bill represents both visible and hidden taxes paid to the federal, provincial and local governments. This includes income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel taxes, vehicle taxes, import taxes, alcohol and tobacco taxes, and more.

Since 1961, the average Canadian family’s total tax bill has increased by 1,832 per cent, dwarfing increases in shelter costs (1,375 per cent), clothing (620 per cent) and food (546 per cent).

“Over the past five decades, the total tax bill grew much faster than the cost of basic necessities, so now taxes eat up more income than any other single family expense. With more money going to the government, families have less to spend on things they care about, to save for education and retirement, and to pay down household debt,” Lammam said.

Even after accounting for changes in overall prices (inflation) over the period, the tax bill shot up 147 per cent.

“While there’s no doubt that taxes help fund important government services, the real issue is the amount of taxes that governments take compared to what we get in return. With almost 42 per cent of income going to taxes, Canadians should ask whether they get the best value for their tax dollars.”

Source: cbc.ca

Sales of medical marijuana are subject to federal sales tax even when they fall into a largely unregulated grey area, a judge has just ruled in a case that underscores the legal haziness around pot in Canada.

B.C.’s Gerry Hedges earned as much as $114,000 a year selling a strain of pot he named Po-Chi — after his dog — to a Vancouver “compassion club” for medical-marijuana users. Though the police once raided his operation on B.C.’s Gabriola island and the Harper government has generally discouraged marijuana use, the federal tax department insisted he charge GST on the shipments.

Mr. Hedges refused, arguing his pot was exempt from sales tax because it is akin to a prescription drug.

But tax-court Justice Campbell Miller has ruled that pot is indeed subject to GST, after dissecting the status of a substance that federal law both criminally sanctions and, sometimes, treats as medicine.

He concluded it is more like an over-the-counter drug, for tax purposes, than a prescription medication.

Po-chi, I find, is more akin to an over-the-counter drug than a drug acquired by prescription: one has little or no government control, versus significant government control
The judge complained, however, that legislation on drugs and GST has “twisted itself out of shape,” and needs to more clearly state when levies should be charged on dried marijuana.

“There is understandable confusion in the industry on this point,” said Judge Miller. “I cannot … say with a great deal of enthusiasm that I have clarified the legislation itself: there remain gaps and inconsistencies.”

Mr. Hedges was not available to talk about the case, and a spokesman for the Revenue Agency declined to comment as the decision might still be appealed. He also said there is no way to determine how much, if any, GST the government takes in on marijuana sales.

Hillary Black, founder of the B.C. Compassion Club that bought Mr. Hedges’ product, said she had been advised not to comment on the case while an appeal is still possible.

The whole tax dispute unfolds against the backdrop of an even greyer area in the fast-evolving medical-marijuana universe — pot-dispensing operations like Ms. Black’s.

Source: news.nationalpost.com

A certain amount of folklore has developed over the years around the income tax system and the filing of tax returns, but many of those age-old perceptions are no longer accurate.
Here are some common myths — and the corresponding facts that could mean extra money in your pocket or at least prevent you from running afoul of the Canada Revenue Agency’s rules
Myth 1: The person whose name or social insurance number is on the tax slip is the person who must report the interest in a joint account.
Not necessarily. “Income earned in joint accounts must be reported by the person who earned the capital in the account,” says tax expert Evelyn Jacks in Jacks on Tax. “Where more than one person contributed capital in their own right, then the income in the account must be allocated based on the capital provided by each contributor.”
Myth 2: The CRA completely agrees with the information you submitted in your return if it sends you back a Notice of Assessment that doesn’t dispute what you submitted.
A Notice of Assessment is just the result of a quick assessment that will have fixed mathematical mistakes you may have made, but it doesn’t mean that the CRA has examined and OK’d everything you’ve submitted. “The fact that a particular claim is allowed at this point does not mean that the CRA … is ‘letting’ you claim it,” notes KPMG in its annual tax planning guide. “It merely means that the CRA has not addressed the issue in any detail.” The tax agency generally has three years after the Notice of Assessment is sent to review your file.
Myth 3: Gifts from your employer are never taxable.
Modest gifts from the boss do escape the tax collector’s attention but only within strict limits. Non-cash gifts worth a total of less than $500 a year aren’t taxable if they’re given to mark birthdays, holidays or similar special occasions. Your boss can also give an employee up to $500 in a non-cash gift once every five years to mark long service or an employment anniversary with no tax consequences to the employee. The boss can also provide a tax-free party or social event worth up to $100 per employee. Cash gifts are always taxable.
Myth 4: I should have refused that pay raise because it will bump me into a higher tax bracket.
Canadians face four federal tax brackets and up to six brackets provincially. But “bumping into the next bracket” means just that one’s income in the higher bracket will be taxed at the higher rate – not that the higher rate will apply to all of the person’s income. “All of the money you earned below the new tax bracket remains taxed at the lower rates,” points out Edmonton-based financial educator Jim Yih in his Retire Happy blog. “The bottom line is you should never, ever, ever turn down money. Enjoy every pay increase you receive without tax worries, and remember that those higher paycheques mean more money in your pocket.”
Myth 5: The U.S. does not impose withholding taxes on U.S. investments if they’re held in registered Canadian accounts.
The U.S. does not recognize the registered status of TFSAs so any dividends paid by U.S. stocks will face a withholding tax of up to 30 per cent. Retirement accounts like RRSPs and RRIFs are exempt from U.S. withholding taxes.
Myth 6: Employment insurance income received during maternity leave is not taxable.
Not true. All EI benefits, including maternity benefits, are taxable. “In most cases, Service Canada withholds less than the lowest tax rate so you may have tax obligations at the end of the year,” says Cleo Hamel, a senior tax analyst with H&R Block.
Myth 7: If you file your taxes online, your odds of being audited increase.
Since it’s not possible to file paper receipts or tax slips online, the Canada Revenue Agency does sometimes ask people who file online to send in supporting documents. But the CRA says this is just “routine verification” and not an audit. “When the CRA flags a file for audit, the criteria are broad, complex and not based on filing method,” the agency says.
Myth 8: The Canada Revenue Agency doesn’t pay snitches.
The tax department has always encouraged reliable tips about Canadians who might not be paying what they should. But it has never rewarded tipsters whose information led to recovered taxes — until now. Early this year, the CRA announced it would start to pay people whose tips pan out cash rewards of five to 15 per cent of the extra tax collected. For now, the new snitch line (1-855-345-9042) is just aimed at those whose funneling of money offshore results in unpaid tax revenue of at least $100,000
Myth 9: You can’t take advantage of the RRSP Home Buyers’ Plan unless you have never owned a home before.
Ottawa requires users of the Home Buyers’ Plan to be “first-time buyers.” But it defines this as people (and their spouses) who have not owned a principal residence in the five calendar years up to and including the current year. For those who owned a home more than five years ago, they can still withdraw up to $25,000 tax-free from their RRSPs ($50,000 for a couple) to help them buy a home.
Myth 10: Everyone hates doing their taxes.
Not true, if the pollsters are correct. A survey commissioned by Thomson Reuters and the maker of a tax software program asked 1,009 Canadians last year if they liked filing their taxes. A significant minority — 41 per cent — said yes. It’s worth noting that the survey did not ask if people liked paying their taxes.

Source: cbc.ca

Did you know?
It’s easy to correct your income tax and benefit return if you realize after filing your return that you made a mistake.

Important facts
You will have to wait to receive your notice of assessment from the Canada Revenue Agency (CRA) before you can make a change to your return.

There are three ways to correct your return once you’ve received your notice of assessment:

use the “change my return” option found in My Account at www.cra.gc.ca/myaccount, one of the CRA’s secure online services;
send a completed Form T1-ADJ, T1 Adjustment Request, to your tax centre; or
send a signed letter to your tax centre asking for an adjustment to your return.
If you send a letter, make sure to give your name, address, and social insurance number and tell us which tax year you want to adjust. You will also need to provide any supporting documents for your change. For example, if you want to change the amount you claimed for charitable donations, you have to submit all your charitable donation receipts to support your claim.

My Account
My Account lets you track your refund, view or change your return, check your benefit and credit payments and your registered retirement savings plan deduction limit, set up direct deposit, and more. It allows you to transact with the CRA from the comfort of your home or the convenience of your office 21 hours a day, 7 days a week. To register for My Account, go to www.cra.gc.ca/myaccount.

Source: CRA website

The Canada Revenue Agency (CRA) warns all taxpayers to beware of telephone calls or emails that claim to be from the CRA but are not. These are phishing and other fraudulent scams that could result in identity and financial theft.

People should be especially aware of phishing scams asking for information such as credit card, bank account, and passport numbers. The CRA would never ask for this type information. Some of these scams ask for this personal information directly, and others refer the taxpayer to a Web site resembling the CRA’s, where the person is asked to verify their identity by entering personal information. Taxpayers should not click on links included in these emails. Email scams may also contain embedded malicious software that can harm your computer and put your personal information at risk.

Examples of recent telephone scams involve threatening or coercive language to scare individuals into pre-paying fictitious debt to the CRA. These calls should be ignored and reported to the RCMP (see contact information below).

Examples of recent email scams include notifications to taxpayers that they are entitled to a refund of a specific amount, or informing taxpayers that their tax assessment has been verified and they are eligible to receive a tax refund. These emails often have CRA logos or internet links that appear official. Some contain obvious grammar or spelling mistakes.

These types of communication are not from the CRA. If the CRA does contact you by telephone, there are established processes in place to ensure your personal information is protected. Should you wish to verify the authenticity of a CRA telephone number, contact the CRA directly by using the numbers on our Telephone numbers page. For business-related calls, contact 1-800-959-5525 and for individual concerns, contact 1-800-959-8281.

To better equip taxpayers to identify possible scams, the following guidelines should be used:

The CRA:

NEVER requests information from a taxpayer about a passport, health card, or driver’s license.
NEVER divulges taxpayer information to another person unless formal authorization is provided by the taxpayer.
NEVER leaves any personal information on an answering machine or asks taxpayers to leave a message with their personal information on an answering machine.
When in doubt, ask yourself the following:

Am I expecting additional money from the CRA?
Does this sound too good to be true?
Is the requester asking for information I would not include with my tax return?
Is the requester asking for information I know the CRA already has on file for me?
How did the requester get my email address or telephone number?
Am I confident I know who is asking for the information?
Is there a reason that the CRA may be calling? Do I have a tax balance outstanding?
The CRA has strong practices to protect the confidentiality of taxpayer information. The confidence and trust that individuals and businesses have in the CRA is a cornerstone of Canada’s tax system. For more information about security of taxpayer information and other examples of fraudulent communications, go to www.cra.gc.ca/security.

Anyone who receives a suspicious communication should immediately report it to info@antifraudcentre.ca or to the institution that the communication appears to be from.

For information on scams, to report deceptive telemarketing, and if personal or financial information has been unwittingly provided, go to the Royal Canadian Mounted Police Web page at: www.rcmp-grc.gc.ca/scams-fraudes/phishing-eng.htm.

Source: CRA website

Editors Note: This story has been revised to say that CRA opinion on collecting IRS penalties was offered in 2012.

The Canada Revenue Agency has confirmed that it will not help the U.S. Internal Revenue Service collect penalties imposed against dual citizens (or any Canadian citizens) for failing to meet financial information filing requirements under U.S. tax laws.

The ruling means that dual citizens who do not enter the U.S. (or U.S. airspace) and have no assets in the U.S. will be shielded from these penalties.

The opinion, written in 2012 on behalf of the Director of the Income Tax Rulings Directorate of the CRA’s International Division, came in response to a request from Vitaly Timokhov of TaxChambers LLP, a Toronto tax law boutique, on behalf of a “hypothetical situation” involving a client who was a U.S. citizen by birth, a Canadian resident under the Canada-United States Tax Convention, and a naturalized Canadian citizen for at least two decades.

The CRA opinion points out the terms of the Convention state specifically that Canada will not assist the U.S. with a “revenue claim” against a Canadian citizen.

The U.S. Bank Secrecy Act requires all U.S. citizens abroad who have assets beyond a specified amount to file an information return known as an FBAR (Report of Foreign Bank and Financial Accounts). Willful non-compliance draws severe penalties up to the greater of $100,000 or half the balance in the account at the time of violation.

The advent of FATCA (U.S. Foreign Account Tax Compliance Act) and the intergovernmental agreement requiring Canadian banks to disclose the names of all U.S. citizen depositors to the CRA, which has an obligation to turn the information over to the IRS, has now greatly increased the risk of discovery.

“The hand-over of information is punitive as many of these individuals most likely have never filed a U.S. tax return but will now be exposed to FBAR penalties,” says Sunita Doobay, also a lawyer at TaxChambers. “This is harsh where the only connection these individuals have with the U.S. is that they were born there.”

Source: Financial Post

Did you know?
The Canada Revenue Agency (CRA) has tax credits, deductions, and benefits to help students. All you have to do is file your income tax and benefit return and claim them.

Important Facts
Here are the top ways to save at tax time:

Claim your eligible tuition fees – An eligible tuition fee is a fee you paid to attend your post-secondary educational institution for the tax year in question. Enter the amount of your tuition on line 320 of Schedule 11, Tuition, Education, and Textbook Amounts.
Claim the education amount – If you are a full-time student (or a part-time student who can claim the disability amount or has a certified mental or physical impairment), you can claim $400 for each month you were enrolled in an educational institution. If you are a part-time student, you can claim $120 for each month you were enrolled.
Claim the textbook amount – You can claim this amount onlyif you are entitled to claim the education amount. You can claim:
$65 for each month you qualify for the full-time education amount (total of Box C times $65). Enter this amount on line 7 of Schedule 11; or
$20 for each month you qualify for the part-time education amount (total of Box B times $20). Enter this amount on line 4 of Schedule 11.
Claim the interest paid on your student loans – You may be able to claim an amount for the interest paid on your loan in 2013 for post-secondary education. You can also claim interest paid over the last five years if you haven’t already claimed it. Only interest paid on loans received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or a similar provincial or territorial government law for post-secondary education can be claimed.
Claim the public transit amount – If you use public transit, you may be able to save by claiming the cost of your transit passes. Keep your transit passes for local buses, streetcars, subways, commuter trains, and local ferries, and enter your total public transit amount on line 364 of Schedule 1, Federal Tax.
Claim your eligible moving expenses – If you moved for your post-secondary studies and you are a full-time student, you may be able to claim moving expenses. However, you can only deduct these expenses from the part of your scholarships, fellowships, bursaries, certain prizes, and research grants that is required to be included in your income. If you moved to work, including summer employment, or to run a business, you can also claim moving expenses. However you can only deduct these expenses from the income you earned at the new work location. To qualify, your new home must be at least 40 kilometres closer to your new school or work location.
Claim the GST/HST credit – If you have low or modest income, and you are a resident of Canada, you may be able to claim the goods and services tax/harmonized sales tax (GST/HST) credit. Apply for this quarterly payment by filling out the application on the first page of your income tax and benefit return.
Claim your child care expenses – If you have to pay someone to look after your child so you can go to school, you may be able to deduct child care expenses.
The CRA has videos geared toward students. Check them out at www.cra.gc.ca/videogallery.

Do you need help filing your tax return? If you have modest income and a simple tax situation, volunteers from the Community Volunteer Income Tax Program may be able to file your tax return for you and make sure you receive all the credits and benefits you are entitled to. For more information, go to www.cra.gc.ca/volunteer.

Source: CRA website

The Canada Revenue Agency (CRA) is reminding Canadians who earn tips and gratuities that they represent taxable income and must be reported on annual income tax and benefit returns. Restaurant servers, hairdressers, valets, taxi drivers, and others who earn tips may not have all of their income recorded by their employers, which means that their T4 slips may not include all of their income.

How do I report my tips?
In preparing to file your tax return, you may have to contact your employer to find out if any or all of your tips will be included on your T4 slip. If you do not get a T4 slip to show your income from tips, you still have to report all tips received in your work on line 104 of your return. It is your responsibility to keep track of any earnings that are not reported on your T4 slip (such as tips and gratuities).

Why should I report my tips?
The Income Tax Act is clear about income from tips: tips are taxable and it is your responsibility to report any that you receive. When you earn tips and do not report them, you are participating in the underground economy—you are increasing the tax burden on your friends, family, and neighbours, who have all of their income reported by their employers on their T4 slips.

Deliberately deciding not to report your tips is also illegal. If CRA auditors and investigators find that you are not reporting all your sources of income, you may be audited, face fines, penalties, or potential jail time.

It’s not too late to report your income
If you have ever made a tax mistake or omission on a previous tax return, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP). If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest. More information on the VDP can be found on the CRA website at www.cra.gc.ca/voluntarydisclosures.

Source: CRA Website

What is digital currency?

Digital currency is virtual money that can be used to buy and sell goods or services on the Internet. Bitcoins are an example of digital currency. Bitcoins are not controlled by central banks or any country, and can be traded anonymously. Bitcoins can be bought and sold in return for traditional currency, and can also be transferred from one person to another.

Do tax rules apply when digital currency is used?

Yes. Where digital currency is used to pay for goods or services, the rules for barter transactions apply. A barter transaction occurs when any two persons agree to exchange goods or services and carry out that exchange without using legal currency. For example, paying for movies with digital currency is a barter transaction. The value of the movies purchased using digital currency must be included in the seller’s income for tax purposes. The amount to be included would be the value of the movies in Canadian dollars.

More information on the tax implications of barter transactions is available by consulting the Canada Revenue Agency’s Interpretation Bulletin IT-490, Barter Transactions.

Digital currency can also be bought or sold like a commodity. Any resulting gains or losses could be taxable income or capital for the taxpayer. Paragraphs 9 to 32 of Interpretation Bulletin IT-479R, Transactions in Securities, provide information that can help in determining whether transactions are income or capital in nature.

Should I be concerned about reporting requirements when using digital currency?

Not reporting income from domestic or foreign sources is illegal. Canadians should know that the Canada Revenue Agency (CRA) is very active in pursuing cases of non-compliance, in order to ensure that the tax system remains fair for everyone.

Source: CRA website

Before you decide to hire a contractor to do construction, renovation, or repair work on your home, ensure they are reputable and insist on getting a written contract and receipts. Be sure to ask a lot of questions, and ask for proof of workers’ compensation or equivalent private liability insurance to cover injury and any damage that could occur in your home. This will protect you from being liable for an injury in your home or on your property, as well as damage to your home or the suppliers’ equipment. Information is key. Know the businesses and individuals that you are dealing with. Recognize those that are participating in the underground economy and don’t do business with them.

You are putting yourself at risk if you pay for a job “under-the-table” without a written contract. You may think you are getting a deal by paying cash and avoiding taxes, but it can leave you with no warranty, no recourse for poor workmanship, and the added risk of liability if an injury takes place on your property. If you are caught evading taxes, you may face fines, penalties, or potential jail time.

Save yourself the trouble — don’t participate in the underground economy. Under-the-table deals undermine the integrity of Canada’s tax system. They deprive the Government of funds for vital programs that benefit all Canadians, including children and seniors. They also provide certain contractors with an unfair, illegal advantage over those who follow Canada’s tax laws.

Source: CRA website

New tax relief will save small businesses more than half a billion dollars over two years
September 11, 2014 – Toronto, Ontario – Department of Finance

Minister of Finance Joe Oliver today announced more action by the Harper Government to create jobs, growth and long-term prosperity: the introduction of the new Small Business Job Credit which is expected to save small businesses more than $550 million over the next two years.

The Small Business Job Credit will effectively lower small businesses’ Employment Insurance (EI) premiums from the current legislated rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. Any firm that pays employer EI premiums equal to or less than $15,000 in those years will be eligible for the credit. Almost 90% of all EI premium-paying businesses in Canada will receive the credit, reducing their EI payroll taxes by nearly 15%.

The Canada Revenue Agency will automatically calculate the credit on a business’ return, ensuring no new paper burden will be imposed on business owners.

In addition, all employers and employees will benefit from a substantial reduction in the EI premium rate in 2017 when the new seven-year break-even rate-setting mechanism takes effect. This will ensure that EI premiums are no higher than needed to pay for the EI program over time.

Quick Facts
Canada has created more than 1.1 million net new jobs since the height of the recession—one of the strongest job creation records in the Group of Seven (G-7).
In 2013, Canada leapt from sixth to second place in Bloomberg’s ranking of the most attractive destinations for business.
According to KPMG, total business tax costs in Canada are the lowest in the G-7 and 46% lower than those in the United States.
In September 2013, the Government announced a three-year freeze of the EI rate at its 2013 level of $1.88 to prevent it from rising to $1.93 in 2014, saving employers and employees an expected $660 million in 2014 alone.

Source: Department of Finance Website

Kamloops, British Columbia, September 5, 2014… The Canada Revenue Agency (CRA) announced today that a contractor from Kamloops was sentenced on September 3, 2014, in Kamloops Provincial Court, after pleading guilty to two counts of income tax evasion and one count of excise tax evasion. He was fined a total of $222,504, and was ordered to serve an 18-month conditional sentence.

A CRA investigation determined that from 2007 to 2009 the contractor paid $527,372, for the renovation and construction of his personal residence and the homes of his children. These costs were then claimed as business expenses, which resulted in the taxpayer evading $24,772, in federal income tax for the 2007 and 2008 taxation years. Input tax credits totaling $36,779 related to these personal expenditures were also falsely claimed. As a result, the company failed to remit $30,517 in Goods and Services Tax (GST) and received a GST refund of $6,262, to which it was not entitled. By claiming these benefits as expenses of the corporation, the taxpayer failed to report $564,151, in taxable income on his personal income tax returns for the 2007 to 2009 taxation years, evading $160,953, in federal income tax.

The preceding information was obtained from the court records.

When taxpayers are convicted of income tax evasion, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA. In addition, the court may fine them up to 200% of the taxes evaded and impose a jail term of up to five years.

If you have ever made a tax mistake or omission, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP). If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest. More information on the VDP can be found on the CRA’s website at www.cra.gc.ca/voluntarydisclosures.

Source: CRA Website

Vancouver, British Columbia, September 3, 2014… The Canada Revenue Agency (CRA) announced today that a Vancouver resident was sentenced on August 29, 2014, in Robson Square Provincial Court. The “taxpayer” pleaded guilty to one count of failing to comply with a Compliance Order to file personal income tax returns for 2005 to 2011. He was ordered to serve a 45-day conditional sentence, including a curfew, and was fined $1,000, payable by October 1, 2014. All outstanding returns have been filed.

The preceding information was obtained from the court records.

When taxpayers are convicted of failing to file tax returns, in addition to any fines imposed by the courts, they must still file the returns and pay the full amount of taxes owing, plus interest owed, as well as any civil penalties that may be assessed by the CRA.

If you have ever made a tax mistake or omission, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP). If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest. More information on the VDP can be found on the CRA’s website at www.cra.gc.ca/voluntarydisclosures.

Source: CRA website

The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, spoke today at the 89th Annual General Meeting and Luncheon of the Richmond Chamber of Commerce in Richmond, British Columbia. Minister Findlay highlighted the Government of Canada’s actions to reduce red tape for small and medium businesses, including those introduced in Economic Action Plan 2014, as well as new enhancements to the Canada Revenue Agency (CRA) online services for businesses.

Since 2006, the Government of Canada has introduced dozens of measures to reduce the red tape burden on small businesses and improve services.

Most recently, in April 2014, the CRA introduced new services that allow corporations to file amended T2 income tax returns using commercial tax preparation software, and taxpayer representatives to submit an authorization request online on behalf of the businesses they represent. In October 2014, the CRA will launch another new service to allow businesses to manage their banking and direct deposit information online using the My Business Account secure online service. More and more businesses are registering to use the CRA’s online services because of all the service options—and new ones continue to be added.

Economic Action Plan 2014 introduced proposals that also target red tape, including revising remittance thresholds for employer source deductions to reduce the maximum number of payments that businesses are required to prepare and submit to the CRA. In addition, the CRA continues to build partnerships with the small business community and provincial and municipal governments on initiatives such as the business number. Based on the idea of “one business, one number”, the business number is a common identifier for businesses that allows them to simplify their dealings with federal, provincial, and municipal governments. The Liaison Officer Initiative, a recently announced pilot project, will also focus on improving compliance and avoiding red tape by providing businesses with in-person support and information at key points of their business cycle, when they most need it.

Quick facts
The Richmond Chamber of Commerce was formed as a society in 1925, originally as a Board of Trade and then later as a Chamber of Commerce. It counts roughly 1100 members today.
Close to four million log-ins were made to the CRA’s My Business Account between April 2013 and March 2014. The number of businesses that are enrolled in My Business Account and have a business number has almost doubled in the last three years.
Increasing the remittance thresholds for employer source deductions will eliminate more than 800,000 payroll remittances for over 50,000 employers of small and medium-sized businesses, saving them time and money.
In October 2014, the first free online option for paying taxes will be available for business owners registered with My Business Account. A detailed payment history for all of their accounts will also be available in one secure and convenient place.
Economic Action Plan 2014 will simplify the tax rules for the lifetime capital gains exemption for certain individuals who operate farming and fishing businesses, to allow for more consistent treatment.
Source: CRA Website

The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, today highlighted pilot projects to help small and medium enterprise (SME) compliance. The Liaison Officer Initiative (LOI) focuses on providing in-person support to businesses as their operations grow. The CRA initially launched two LOI pilot projects in March 2014, one in Ontario, and the other in Quebec. The LOI is based on a “right from the start” approach which allows the CRA to address non-compliance in a more efficient and effective way by focusing on educating, informing and supporting small and medium businesses.

In the fall of 2014, the Canada Revenue Agency (CRA) will expand the Liaison Officer Initiative (LOI) pilot project to British Columbia, the Prairies and Atlantic Canada. Through these pilot projects, the CRA is providing information and guidance at key points in the lifecycle of a business so that businesses can avoid mistakes that would be more costly to correct down the road. Such an approach translates into fewer audits, re-assessments, and potentially fines, which in turn means less red tape and lower costs for both the taxpayer and the CRA.

As part of the pilot project, businesses in the industry sectors selected for the pilot will be contacted by the CRA and a Liaison Officer will offer a voluntary face-to-face visit that will focus on educational and preventative measures to improve voluntary compliance. Businesses that accept the CRA’s offer will benefit from one, two or all of the following activities: small business support visits; books and records reviews; and compliance support arrangements. These educational and preventative measures should not be confused with CRA audit activities.

The Minister’s visit today is part of a three-stop tour to Kitchener-Waterloo, London and Mississauga where she is holding round-table discussions with stakeholders to discuss the CRA’s red-tape reduction initiatives, including the LOI.

Quick Facts
The CRA wants to help Canadian businesses reduce red tape and avoid tax-related problems by ensuring they understand their tax obligations. By meeting their obligations, SMEs can potentially avoid time-consuming audits in the future.
LOI pilot projects are taking place from March 2014 to December 2015 in the Ontario and Quebec regions. New pilot projects will get underway in B.C, the Prairies and Atlantic Canada in the fall of 2014.
The LOI is built on the “right from the start” approach that has been identified as an international best practice by other tax administrations.

Source: CRA Website

Harper Government launches first-ever CRA mobile app for small and medium-sized businesses.

August 21, 2014 – Vancouver, British Columbia – Canada Revenue Agency

The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, today took part in a roundtable with businesses to launch the first-ever mobile app for small and medium-sized businesses from the Canada Revenue Agency (CRA). The new Business Tax Reminders mobile app is another example of our Government’s client-focused and technology-driven approach to reducing red tape for businesses.

The new app lets business users create custom reminders and alerts for key CRA due dates related to installment payments, returns, and remittances. Our Government developed the app following feedback from consultations with small and medium-sized businesses on how to improve the CRA’s services while reducing red tape and making it easier for businesses to fullfil their tax obligations.

This is just one example of how our Government is improving service options to meet the needs of Canada’s entrepreneurs. As part of the Government of Canada’s Red Tape Reduction Action Plan, a growing number of service enhancements and measures have been launched to reduce red tape for businesses, including several introduced in Economic Action Plan 2014, which the CRA is implementing this year. For example, since April, corporations have been able to file amended T2 income tax returns using commercial tax preparation software, and taxpayer representatives have been able to send an authorization request (Form RC59), electronically to the CRA on behalf of the businesses they represent. These are specific examples of the real results we are delivering for small and medium-sized businesses across the country.

For more information on the Business Tax Reminders mobile app, go to www.cra.gc.ca/mobileapps

Quick Facts
The Business Tax Reminders mobile app is now available free of charge on Apple iOS, Google Android, and BlackBerry mobile platforms, and will have a similar look, feel, and functionality across each platform.
To download the mobile app, go to your favourite app store and search “Business Tax Reminders”, or visit the CRA Business Tax Reminders mobile app page, and follow your app store’s download instructions.
The mobile app lets users customize their reminder system with different methods of alert, either calendar or pop-up messages, to meet their business needs.
The Business Tax Reminders mobile app is recommended for small and medium-sized businesses. Large businesses can use the app at their discretion if they do not have a complex tax situation.
The app is designed to benefit businesses. It is not intended for individual use.

Source: CRA Website

Discussion and Interpretation
¶ 1. Subsection 18(12) provides that a self-employed individual, in computing income from a business for a taxation year, is not entitled to any deduction for expenses otherwise deductible under the Act related to any part (hereinafter referred to as “work space”) of a self-contained domestic establishment in which the individual resides, except where the work space is either

(a) the principal place of the business of the individual, or

(b) used exclusively to earn business income and on a regular and continuous basis for meeting clients, customers or patients of the individual in respect of the business.

The expression “self-contained domestic establishment” is defined in subsection 248(1) as a dwelling house, apartment or other similar place of residence in which place a person as a general rule sleeps and eats. Where an individual’s income for a taxation year includes income from a business the fiscal period of which does not coincide with the calendar year, a reference in this bulletin to a taxation year should be read as a reference to a fiscal period of the business ending in the taxation year.

Principal Place of Business
¶ 2. Where an individual has two or more places of business in respect of the same business, the work space must be the principal place of business in order to meet the requirement in 1(a) above. The word “principal” is not defined in the Act but it is considered that the words “chief” and “main” are synonymous to it. Where, for example, a room in a contractor’s residence is used to accomplish the functions relating to a contracting business, such as, receiving work orders, bookkeeping, purchasing and preparing payrolls while the remaining activities of the business, the performance of the contracts, are carried out at the customer’s location, the room would be considered as the contractor’s principal place of business. Similarly, the work space in a farmer’s home utilized to operate the farming business would normally be the farmer’s principal place of business. The room used by the contractor and the farmer’s work space could also be used for personal purposes since they need not be used exclusively for the business in order to meet the 1(a) requirement.

Regular and Continuous Basis
¶ 3. The first requirement of 1(b) above is that the work space must be used exclusively to earn business income. This requirement is met if a segregated area, such as a room or rooms, is used in a business and for no other purpose. The second requirement is that the work space must be used for meeting clients, customers or patients on a regular and continuous basis. The regularity and frequency of meetings in a work space to meet the requirement of being on a regular and continuous basis will depend on the nature of the business activity and is determined on the facts of each situation. However, a work space in respect of a business which normally requires infrequent meetings or frequent meetings at irregular intervals would not meet the requirement. A home office used by a doctor to meet one or two patients a week is an example of a work space which would not be considered used on a regular and continuous basis for meeting patients. On the other hand, a work space used to meet an average of 5 patients a day for 5 days each week would clearly be used for that purpose on a regular and continuous basis. Unless 1(a) above applies, both requirements in 1(b) above must be met in order to deduct expenses relating to a work space.

Restriction on Deduction
¶ 4. An individual who carries on a business in a work space, and has met the test in either 1(a) or (b) above, will be able to deduct only the expenses related to the work space to the extent they are otherwise deductible and do not exceed the income from the business for the taxation year, carried on in the home or elsewhere, determined prior to deducting the expenses related to the work space. Thus, such expenses for a taxation year cannot create or increase a loss for income tax purposes from the business for which the work space is used. The expenses related to the work space could include, for example, the prorated portion of rent, capital cost allowance, property insurance, property taxes, mortgage interest or operating costs such as heating and lighting. The expenses should be apportioned between business and non-business use on a reasonable basis, such as, square metres of floor space used. However, the reasonable basis should also take into consideration the personal use, if any, of a work space that is an individual’s principal place of business as described in 2 above. The capital gain exemption in respect of principal residence does not apply to a work space in home for which capital cost allowance has been claimed (see the current version of IT-120).

Although telephone, consumed supplies and other similar expenses may relate to the business, they do not relate to the work space and, accordingly, are not subject to the conditions and restrictions of subsection 18(12).

Carry Forward of Undeducted Expenses
¶ 5. The portion of the otherwise deductible expenses related to a work space that cannot be deducted in a taxation year by reason only of 4 above will be considered an expense related to the work space in the immediately subsequent taxation year. Where in that immediately subsequent taxation year the test in 1(a) or (b) above is met, the portion of the expenses carried forward and any further actual expenses incurred in that year may be deducted to the extent permitted by 4 above, and any excess is carried forward to the next year. Thus an indefinite carry forward is provided as long as either 1(a) or (b) above is met on a continuous basis.

Source: CRA Website

Minister Findlay meets with local businesses to discuss new civil and criminal sanctions for possession or use of electronic suppression of sales software

August 13, 2014 – Saskatoon – Canada Revenue Agency

The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, joined by Minister Lynne Yelich, Member of Parliament for Blackstrap, and Kelly Block, Member of Parliament for Saskatoon-Rosetown-Biggar, today took part in a roundtable discussion with business owners to discuss new sanctions introduced earlier this year to combat the use of electronic suppression of sales (ESS) software and its contribution to the underground economy.

Economic Action Plan (EAP) 2013 proposed new administrative monetary penalties and criminal offences under both the Excise Tax Act and Income Tax Act targeting those participating in the use, possession, sale or development of ESS software. Those EAP measures took effect on January 1, 2014.
Earlier this year, the Canada Revenue Agency (CRA) began an awareness campaign to ensure that businesses were aware of the new sanctions. The awareness activities will conclude this summer.
As of September 1, 2014, the CRA will begin to impose these new civil penalties and criminal sanctions for participating in the use, possession, sale or development of ESS software.
Quick facts
ESS software (commonly known as “zapper” software) selectively deletes or modifies sales transactions in point-of-sale systems, electronic cash registers and business accounting systems, leaving no record of the original transaction behind. The software allows businesses to underreport their revenue and avoid paying taxes.
Under the new measures, businesses that use, possess, or acquire ESS software will face a fine of $5,000 for the first infraction and $50,000 on any subsequent infraction. Anyone who participates in manufacturing, developing, selling, possessing for sale, offering for sale or otherwise making available ESS software will face a fine of $10,000 for the first infraction, and $100,000 on any subsequent infraction. They may also face criminal charges of up to $1 million in fines, up to a five year jail term, or both.
Quotes
“Our Government is serious about cracking down on tax cheats—including those who manufacture or use electronic suppression of sales software. We now have the tools to penalize these tax cheats with stronger civil and criminal consequences, including fines and even jail time. Participation in the underground economy hurts all Canadians.”

The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue
“The severity of these sanctions speaks to how serious a crime this is. We are committed to rooting out tax cheats and making sure they are punished accordingly. In keeping with our commitment to reducing red tape, we have enacted these measures without creating additional reporting requirements for compliant businesses.”

SOURCE: CRA WEBSITE

Between the tax season busyness around the office and our beloved Canucks clinching the Western Conference Championship outside the office, this contract employee has yet to file his taxes. I thought this morning: “How can I rightfully chide my audience if they choose to take the typical tardy approach to doing ones taxes, when I myself have fallen victim to the same game of procrastination?” I can’t. So with 31 days to file your taxes, my repentance to you is to introduce you to the basics of Employment Expenses as referenced by the CRA; and recommend you find an accountant as educated on the (often complex) aspects of Employment Expenses as my coworkers here at Tax Team.

To claim employment expenses, your employer must sign a T2200 form!

Work-space-in-the-home expenses
You can deduct expenses you paid in 2010 for the employment use of a work space in your home, as long as you meet one of the following conditions:

* The work space is where you mainly (more than 50% of the time) do your work.
* You use the work space only to earn your employment income. You also have to use it on a regular and continuous basis for meeting clients or customers.

CRA Interpretation Bulletin on Employee’s Expenses, Including Work Space in Home Expenses

Motor vehicle expenses
The types of expenses you can deduct include:

* fuel and oil;
* maintenance and repairs;
* insurance;
* licence and registration fees;
* capital cost allowance ;
* eligible interest you paid on a loan used to buy the motor vehicle;
* eligible leasing costs.

Enter these amounts in the “Calculation of Allowable Motor Vehicle Expenses” area of Form T777.

CRA Interpretation Bulletin on Vehicle, Travel and Sales Expenses of Employees

Having now fully recovered from our pi(e) day hangovers and with the kids all on Spring Break, things around Tax Team are more abuzz than the seasonally stressed elliptical machines at your local fitness centre.

While the glimmer of the Springtime sun sends me to the gym along with the frenzied masses, it also rekindles memories of summers passed and excites the desire for a quick get-away to one of my favourite spots in the sun. Now for someone like me, who is just getting a footing in the “real” job world, a spot in the sun usually consists of a (seasonally heated) patio. But perhaps you, my financially established readers, have a spot South of the 49th and perhaps you collect foreign income off of it when that desire for a get-away just isn’t in the cards. So if you’re lucky enough to make some money off the sunshine South of the border when you’re not fortuitous enough to personally enjoy it, today’s tax tip is for you.

If you as a Canadian have had withholding taxes deducted from your foreign non-business income you may claim a foreign tax credit. But beware because not all tax software programs automatically calculate this non-refundable tax credit, if it is non-business income and not reported on a T-slip. When the withholding tax on foreign property income exceeds 15% the difference may be deducted from income on line 232 of your T1 tax return. In other words, only the 15% tax amount is used in the calculation of the foreign tax credit, with the remainder available to reduce the amount of foreign non-business income.

For further clarification from the CRA please follow the link here

As you already know HST in British Columbia will come in effect on Canada Day.

If you are already collecting GST or PST or both as of July 1, 2010 you will start collecting HST.

Please make sure that your invoices clearly state amount  of  HST collected.

You will collect and remit HST based on your current GST filing frequency (i.e. quaterly, annually etc).

For more in formation on filing HST returns  and rules and regulations  please visit official CRA website

http://www.cra-arc.gc.ca/gsthst/

For  a list of  products and services that are taxable under the HST please see the following links

http://hst.blog.gov.bc.ca/wp-content/uploads/2010/05/GST_PST_HST_List_v04.pdf

http://hst.blog.gov.bc.ca/2010/03/27/rebates-exemptions/

The self-employed tax deadline is getting closer and closer in Canada. For help completing your tax return call us.

The deadline for tax returns is closing in fast, and a rushed return can cost you thousands of dollars. Tax Team Canada has hundreds of tips which can help reduce your tax burden, but time is running out so we have filtered them down to 8 quick and easy tax return tips that could save you time, stress and a lot of money.

1 – Homeowners who renovated their property in 2009 can claim a non-refundable tax credit of up to $1,350 for renovation goods and services. First-time buyers can also claim up to $750 for the purchase of a qualifying home.

2 – Medical Expenses like nursing, therapy and private health care services can be eligible for a tax refund. It is also possible to claim for contact lenses, computer peripherals and travel expenses if you had to travel over 40km from your home for treatment.

3 – Students may be able to claim up to $400 ‘Education Amount’ and $65 ‘Textbook Amount’ for every month they were enrolled in a qualifying education program. Tax credits are also available for student loan interest, public transit and tuition fees.

4 – Seniors over 65 with annual income up to $75,000 can claim an ‘Age Amount’ of up to $6,408. They can also receive tax credits for public transit.

5 – People with disabilities or parents of children with disabilities can claim various credits, including a ‘Disability Amount’ available to people with prolonged physical or mental impairment.

6 – Parents can claim over $2,000 for each of their children, if that child lived with them and was under 18 in 2009. Deductions are also available for child care expenses and medical expenses.

7 – Tradespeople can claim up to $500 for tools and GST/HST for expenses incurred in the course of employment. They can also deduct certain expenses they paid to find employment.

8 – Northern residents who live in zones assigned by the federal government for over half the year can claim certain travel and living expenses.

To find out more on any of these points, or for free tax return information, visit taxteamcanada.com. Based in Vancouver, Tax Team staff are certified tax accountants who can help reduce your taxes. Every new client that books an appointment before April 15th will receive a complimentary Financial Planning Session and Portfolio Review.