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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

If you wish to contribute to your RRSP you need to do it right away.  The deadline for RRSP contributions is March 1st.

However, before you make your contribution you need to check your 2009 RRSP limit. You can check your RRSP limit by either calling the CRA at 1-800-959-8281 or by going to http://www.cra-arc.gc.ca/quickaccess/. Just follow the

instructions on the phone or on the website.

You need to make sure you have a copy of your last year’s tax return or Notice of Assessment, as you will need it to answer security questions before you can access your RRSP Limit information.

If you do not know how to invest money into your RRSP, please talk to your financial adviser. You can invest money into a money market fund or a GIC of your choosing.

T4 SUMMARY

If you are an employer you need to file a T4 summary with the CRA and issue T4 slips to your employees.
The filing deadline is February 28, 2010.  The late filing penalty can be quite steep so please hurry.