Time to Gather Our Tax Slips

Here we are again, it’s time to for us to gather our tax slips for the April 30th deadline. For some, this can be a frantic and stressful time. If you’re missing anything, if your accountant is requesting anything or if you just want to do a final check, please call Jennifer at 905 433-0215 or send her a quick email.

Should you or your accountant require any information or documents to be sent, let us know. We would be happy to send the needed information to you by email, however, due to the confidential information enclosed with tax documents, these attachments containing your tax information will be password protected. Once Jennifer sends you the email she will call to provide a password to open these documents. When you forward these documents to your accountants you will need to give them that same password to open the same attachment.

Tax planning is an ongoing process throughout the year and is discussed at our reviews. It is important that we work together with your tax specialist to ensure that your investment objectives and goals are as tax efficient as possible throughout your life whether you are saving for retirement, transitioning to retirement or currently enjoying retirement. At every stage of life, there are ways to minimize, but not completely avoid, taxes.

Currently, we work with many amazing accountants and we asked them to share some helpful tips that we could pass on to you.

Here are two questions I asked them:

1. What tax tip can you offer an individual that you feel most other accountants don’t address?
2. What tax tip can you offer a business owner that can also help with their personal taxes

What tax tip can you offer an individual that you feel most other accountants don’t address?

1. For couples who are married or in a common-law relationship, when planning for retirement it is important to think about what sources of income each spouse will have. Where one spouse has historically had higher income and will have higher income in retirement, spousal RRSPs will be an important tool. The higher income earner could make spousal RRSP contributions to ensure that the lower income earner has a source of income in retirement. To the extent that we can shift income out of the higher income earner’s hands in retirement, there is an overall tax savings. The higher income earner will receive a tax deduction in the year the spousal RRSP contribution is made but the lower income earner will pay tax when the funds are withdrawn in the future.

2. Be sure to ask your accounting professional for a Disability Tax Form if anyone in your family has a disability. Your doctor can complete this form and you can send it into the Canada Revenue Agency and request adjustments to income tax returns for up to the past 10 years. This is especially applicable now as our population ages, and we are seeing an increase in such illnesses as dementia. And please do not use those companies that offer to fill out the application for you and ask the CRA for adjustments. These companies take advantage of taxpayers and charge 30% or more of the refund you get back. Your tax preparer can do this work legitimately and for far less money.

What tax tip can you give to a business owner that can also help with their personal taxes?

1. Business owners often ask whether their vehicle should be owned by their corporation. Unless the vehicle is used 100% for business purposes, there will be a tax impact to the owner. Where a corporate-owned vehicle is used by the owner for personal reasons (including driving to an from the office) the corporation must calculate a taxable benefit based on the value of the vehicle and the amount of personal use. Even where the personal use of the vehicle is relatively low, if the value of the car is high, the taxable benefit to the owner could be significant. Alternatively, the business owner could track their mileage, complete an expense report and be reimbursed by the corporation. In this case, the amount paid to the owner would be considered a reimbursement which is not taxable and the corporation would be entitled to a deduction for the reimbursed costs.

2. Claim everything, and don’t be afraid to show a loss your first year(s) in business. It can cost a lot to start a business (computers, equipment, commercial rent) and any sole proprietorship business loss can be applied to the previous 3 years, or the next 20 years.
I know people dread paying taxes and some are feeling the strain of paying these taxes, however, let’s talk about ways of minimizing this burden the best we can by working with you and/or your tax specialists to find the best strategy to help with this. We cannot avoid taxes but working together we can be more tax efficient.

Budget Canada 2019

Please click here to read a short summary of the 2019-2020 budget produced by our team of experts. This summary highlights the main changes and impacts for individuals, businesses and other measures of interest.

I know people dread paying taxes and some are feeling the strain of paying these taxes, however, let’s talk about ways of minimizing this burden the best we can by working with you and/or your tax specialists to find the best strategy to help with this. We cannot avoid taxes but working together we can be more tax efficient.

If you need a referral to a tax specialist, maybe even one of the helpful professionals who contributed to this newsletter, please give us a call at 905 433-0239.