Canadian Accountant Tips

Ontario Trillium Benefit

noreply@blogger.com (A.N.Rajah) — Mon, 16 Jan 2012 06:00:00 PST

Ontario Sales Tax credit (OSTC), Ontario Energy and Property Tax credit (OEPT) and Northern Ontario energy credit (NOEC) are credits for Ontarians earning low and moderate income. These programs will be combined as Ontario Trillium Benefit (OTB) from July 2012. These benefits are now paid quarterly and will be paid monthly from July 2012.

Ontario Sales Tax Credit

You could get up to $265 for 2011 for each adult and child in your family to help with the sales tax you pay on goods and services. This amount is adjusted for inflation each year.

Ontario Energy and Property Tax Credit

If you pay rent or property tax, you could get up to $917 for 2011 to help with the sales tax you pay on energy and the property taxes you paid and qualifying seniors can get up to $1,044 for 2011.

Northern Ontario Energy Credit

Families living in Northern Ontario can get up to $204 for 2011 to help with their home energy costs, as it is often higher in the North due to more severe winters. If you are single, you can get up to $132.

These amounts will be adjusted for inflation each year.

Eligibility:

You must be eligible to at least one of the benefits (OSTC, OEPT or NOEC) to eligible to receive OTB.

Application:

You must complete Ontario Form ON-BEN which is part of the 2011 T1 General Income Tax and Benefit Return package and file it with the Canada Revenue Agency (CRA). If file your individual tax returns later than April 30th may result in delay in receiving OTB payments.

New 2011 Children's Art tax credit

noreply@blogger.com (A.N.Rajah) — Fri, 13 Jan 2012 16:23:00 PST

You may be able to claim children's art tax credit in 2011 and going forward. Here is a blog post about it from Smart Canadian blog site.
Children's Art tax credit

Federal Budget June 6th 2011- Key measures affecting individuals

noreply@blogger.com (A.N.Rajah) — Mon, 06 Jun 2011 15:35:00 PDT

Finance Minister presented the Federal budget on June 6th 2011. Here is a list of key measures affecting individuals.

Children’s Art Tax Credit: The budget proposes a new 15% non-refundable Children’s Art Tax Credit for eligible expenses up to $500. The credit will be available in respect of a child who is under 16 years of age at the beginning of the year who is enrolled in an eligible artistic, cultural, recreational or developmental activity. This credit will be structured in the same manner as the existing Children’s Fitness Tax Credit. The credit will apply to eligible expenses paid in the 2011 and subsequent taxation years, and will be able to be claimed by either parent, or shared by both parents.
Family Caregiver Tax Credit: A Family Caregiver tax credit is proposed for a caregiver of a dependent person who has a mental or physical infirmity. The credit will be integrated into the existing dependency-related credits and will be based on an amount of $2,000. The credit will apply beginning in 2012.
Medical Expense Tax Credit cap removal: The Medical Expense Tax Credit in respect of a dependent relative (other than a child who has not reached the age of 18 years before the end of the taxation year) is proposed to be amended to remove the current $10,000 limit on eligible expenses that can be claimed. This measure will apply to the 2011 and subsequent taxation years.
Increased Flexibility with Registered Education Savings Plan (RESP) allocations: The budget proposes to allow for greater flexibility with respect to the allocation of RESP assets among siblings by expanding the ability to transfer between individual RESPs for siblings, without tax penalties or triggering the repayment of Canada Education Savings Grants, to individuals who are not connected by blood or adoption, such as aunts or uncles. This proposal will apply to asset transfers that occur after 2010.
Tuition Tax Credit expansion: The Tuition Tax Credit is proposed to be amended to include certain occupational, trade or professional examination fees and ancillary fees and charges as eligible fees for the credit. This amendment will apply to eligible amounts paid in respect of examinations take in the 2011 and subsequent taxation years.
Tuition, Education and Textbook Credits amendment: The Tuition, Education and Textbook Tax Credits, as well as eligibility for Educational Assistance Payments (EAPs) from an RESP, are proposed to be amended to accommodate the fact that many programs at foreign universities are based on semesters that are shorter than 13 weeks. The minimum course duration for these purposes is proposed to be reduced from 13 weeks to three consecutive weeks. This amendment will apply with respect to tuition paid for courses taken in the 2011 and subsequent taxation years and to EAPs made after 2010.
Changes to RRSP rules to limit abuses: The RRSP rules are proposed to be amended to address certain perceived abuses, a number of which involved accessing RRSP without a corresponding income inclusion. Measures similar to those recently implemented in respect of TFSAs are proposed to be introduced for RRSPs. Subject to certain exceptions, these measures are proposed to apply to transactions occurring and investments acquired after March 22, 2011. (For these purposes investment income earned after March 22, 2010 on previously acquired investments will be considered a transaction occurring after March 22, 2010.)
Clarification of Pension Tax Rules for Lump Sum Payments: The Canada Revenue Agency (CRA) will clarify the application of the pension tax rules with respect to the tax treatment of lump sum amounts received by former employees in lieu of their rights to health and dental coverage from employers who have become insolvent and whose underfunded pension plans were wound up. These amounts will not be treated as income for tax purposes in relation to insolvencies arising before 2012.
New Volunteer Firefighters Tax Credit: A new 15% non-refundable Volunteer Firefighters Tax Credit is introduced. This credit is based on an amount of $3,000 and is proposed to be available to individuals who perform at least 200 hours of volunteer firefighting in a taxation year. Volunteer service hours will not qualify if the firefighter also performs non-volunteer services to a particular fire department. An individual who claims this credit will not be eligible for the current $1,000 tax exemption for honoraria paid in respect of firefighting. This credit will apply to the 2011 and subsequent taxation years.
Child Tax Credit modification: Eligibility for the 15% non-refundable Child Tax Credit (based on an indexed amount - $2,131 in 2011) is proposed to be modified to eliminate the restriction that only one credit may be claimed per domestic establishment. This will ensure that where two or more families share a home, each eligible parent will still be entitled to claim the credit. This measure will apply to the 2011 and subsequent taxation years.
Charitable Donations Tax Credit or Deduction clarification: The budget proposes to clarify that the Charitable Donations Tax Credit or Deduction is not available to a taxpayer in respect of the granting of an option to a qualified donee to acquire a property of the taxpayer until such time that the donee acquires the property that is the subject of the option. The taxpayer will be allowed a credit or deduction at that time based on the amount by which the fair market value of the property exceeds the total amount, if any, paid by the donee for the option and the property. This measure will apply in respect of options granted on or after March 22, 2011.
Renewal of Two EI Pilot Projects: The government intends to renew two EI pilot projects for one year. The Working While on Claim pilot project, available across Canada, will allow EI claimants to earn additional money while receiving income support. It will be renewed until August 2012. The Best 14 Weeks pilot project, which allows claimants in 25 regions of higher unemployment to have their EI benefits calculated based on the highest 14 weeks of earnings over the year preceding a claim, will be renewed until June 2012.

Courtesy: Deloitte

Ten Basic Facts about Tax Free Savings Accounts (TFSAs)

noreply@blogger.com (A.N.Rajah) — Mon, 16 May 2011 06:30:00 PDT

Tax-Free Savings Account (TFSA) is a new registered general savings vehicle that was introduced in 2008 federal budget that allows Canadians to save money in the account tax-free throughout their lifetime. The income and earnings in the TFSA plan accumulate without any tax implication. The ten basic facts about eligibility, contribution, withdrawals, effects of marriage breakdown and beneficiary designation of the TFSA plan.

Who is eligible to open a TFSA?

An individual who is 18 years or older and has a Canadian Social Insurance Number is eligible to open a TFSA account. Some provinces and territories have age of majority as age 19 (British Columbia, New Brunswick, Nova Scotia, Newfoundland, Northwest Territories, Yukon and Nunavut) and financial institutions in those provinces may not open a TFSA for individuals who not yet 19 years old. But the contribution room accumulation will start at age 18. There is no limit to number of accounts a holder can open but there is a limit how much a holder can contribute

What is the contribution limit and who can contribute?

Contribution limit for TFSA is $5000 each year for 2009 to 2011. But will remain $5,000 in 2012. The limit for the future years will be increased based on inflation and rounded to nearest $500.

Anyone with the contribution room can contribute to TFSA without any penalty or interest. Only the account holder can contribute to the TFSA (i.e. no spousal plans similar to RRSP) but an individual can give money to his\her spouse or common law partner for contribution without any attribution rules. TFSA contributions are not tax deductible.

How is TFSA contribution room determined?

The TFSA contribution room is made up of:

TFSA contribution limit for the year ($5,000 per year plus indexation, if applicable);
any unused TFSA contribution room from the previous year; and
any withdrawals made from the TFSA in the previous year, excluding qualifying transfers or specified distributions.

Example: Rosa opened in TFSA account in 2009 and contributed $2000 and did not make any contribution in 2010. Her contribution room for 2011 is $13,000 (Carry forward of $3000 from 2009 and $5000 from 2010 and $5000 from the current year).

You can find TFSA contribution room from Notice of Assessment (NOA), calling CRA or by logging in to My Account at CRA. If you have filed tax returns early the NOA may not reflect the correct contribution room and best way find the limit is by calling CRA or logging to My Account.

What happens if I have over contribute for the year?

A penalty will be assessed by Canada Revenue Agency (CRA) of 1% per month on your excess contribution

What investments can I hold in the TFSA?

Cash
Guaranteed Income Deposits
Bonds
Mutual funds
Stocks listed in designated exchange

Can I transfer TFSA from financial institution to another without tax implications?

TFSA in one institution can be transferred to another as qualified transfer without any tax implication.

Example: Edward has a TFSA account with Royal bank and balance of that account $7500 and would like to transfer it to TD bank. He has to go to TD and complete a transfer form requesting the transfer and then TD will request.

Can I withdraw from TFSA?

Funds in the TFSA can be withdrawn without any tax implications and the withdrawal amount will be added to the contribution room of the following year except for certain exceptions.

Example: Hillary contributed maximum to TFSA each year and withdrew $2000 in 2011. Her contribution room for 2012 will be $7500 (contribution room added for replacing the withdrawal $2000 plus contribution room of $5500 for 2012).

Will I receive any tax slips from CRA for income or withdrawals?

There will not be any tax slips for income, withdrawal or transfers except some situations.

What happens if there is a marriage breakdown or common law partnership?

When there is a breakdown of marriage or common-law partnership, TFSA assets can be transferred from the holder to the spouse or common law partner’s TFSA without affecting either holder’s contribution room. To do this, following conditions must be met:

§ you and your current or former spouse or common-law partner are living separate and apart at the time of the transfer; and

§ you are entitled to receive the amount under a decree, order or judgment of a court, or under a written separation agreement to settle rights arising out of your relationship on or after the breakdown of your relationship

Can a beneficiary designated for TFSA?

Beneficiary can be designated in the plan (except in Quebec) or in the will. If the spouse or common law partner is designated as successor holder then after holder’s death spouse becomes holder of the account without any tax implications and it will not affect spouse or common law partner’s contribution room. The transfer must be made directly between the TFSAs.

Here are the other posts I have written about TFSA:

TFSA and tax slips

Contingent beneficiary for RRSP, RRIF and TFSA

Is inheritance taxable?

Being green and saving money on laundry

noreply@blogger.com (A.N.Rajah) — Sun, 08 May 2011 12:29:00 PDT

Image via Wikipedia

My husband is a green freak and I am a frugal person. Some time this combination does not work well but we try our best to be frugal and environmentally friendly. Here is what we have learnt from our experience of being frugal and environmentally friendly in doing laundry.

Buy front-load energy star washing machine: These machines use less water and energy. Front load machines may cost more than top load machines but in the long run, it will save money. If you are replacing your washing machine consider buying a front load energy star machine.

Buy washing machine with auto sensor: These machines sense the load size and adjust the water accordingly. That means less water usage and less heating cost.

Use cold water to wash: When you wash in the cold water you not only save energy but it is also good for the clothes. I use cold water wash for most of the time and but time-to-time wash the whites in warm water.

Use green or environmentally friendly laundry detergents: I use Sunlight Green Clean. This does not have Chlorine or artificial dyes. There are other environmentally friendly laundry detergents available in Canada. Here are few other examples: Green Works laundry detergents, PC Green Laundry detergents and Seventh Generation laundry detergents.

Buy laundry detergent on sale and use coupons: Laundry detergents are expensive but those go sale frequently. Recently, I have seen sales for laundry detergent almost every week. You can keep laundry detergent for 1-2 years and so buy when it is on sale and keep it for future use. Coupons for laundry detergents are available through manufacturer website, flyers, store coupons etc. I have found Sunlight coupons in milk bags recently and used it to buy few bottles of Sunlight Green Glean. The retail price of this detergent (32 loads) is around $7.50 and it was on sale for $4.00 and use $2.50 coupon and bought it for $1.50 (less than 25% of the retail price).

Wash during off peak hour: In Ontario you are charged lowest hydro rate during off peak hour. Do your laundry after 9.00 pm or before 7.00 am on weekdays or weekends and holidays to save money.

Use cloth racks to dry the clothes: I dry our clothes in the cloth racks in side house during winter and outside in summer. It dries in a day.

Clean the dryer vents: Cleaning the vents improves efficiency and reduces fire risk.

Don’t use fabric softeners. Fabric softener contains chemicals. According to Environment Health Association of Ontario, it is the most toxic product produced for daily household use. It has been found to be associated with numerous illnesses and chronic conditions. I use dryer balls instead of fabric softener. I know some people use vinegar but I have heard that it may be bad for rubber parts inside the washing machine.

Double Savings - Use coupons on sale items

Price Matching

Scanning Code of Practice (SCOP)

Spousal RRSP withdrawal Rules

noreply@blogger.com (A.N.Rajah) — Sat, 07 May 2011 15:45:00 PDT

When you withdraw funds from your RRSP, the amount is taxable income for you for that year and the financial institution that is holding\held your RRSP will issue T4RSP in your name and you will include in your income for that year. But the rules are different for spousal RRSPs. The income may be attributed to the contributor in certain scenarios.

o If a contribution is made in the year the annuitant of the withdrawal, or in the two years prior years before the withdrawal, the contributing spouse is required to include in his or her income the lesser of,

· The amount withdrawn, or

· The amount contributed by the contributing spouse for those years (that is, the year of withdrawal plus the two preceding years).

o the same rule applies if the withdrawal and contribution are made in the same year but the contribution is made after the withdrawal.

o If the contributing spouse made no contributions in the year of the withdrawal or the preceding two years, the withdrawal is taxable in the hands of the annuitant.

o The attribution does not apply in the event of:

· Marriage breakdown

· Death of the contributing spouse

For example David and Hilary are married couple and opened a spousal RRSP in Hilary’s name (Hilary is the annuitant and David is the contributor) in 2010 at TD bank. David contributed $2000 in 2010 and Hillary withdrew $1500 in 2011 March. TD bank will issue T4RSP slip in Hilary’s name in early 2012 for year 2011 for $1500. Even though, the T4RSP tax slip will be issued in Hilary’s name the amount is taxable income for David and should be included in David’s 2011 income.

How to get better mortgage rate?

noreply@blogger.com (A.N.Rajah) — Fri, 06 May 2011 06:30:00 PDT

A good friend of mine asked whether I knew how to get better mortgage rates. Here is what I did when I applied for mortgages.

I usually call couple of banks and couple of mortgage brokers and get a quote. I was up front and told them that I was shopping around. I don’t provide any personal details for them to make an application or do a credit check But give them the mortgage amount and ask what would be their best rate and terms of the mortgage (prepayment limits, penalty calculation for breaking the mortgage). There will be some who would say that they can’t give you exact without the application, I exclude them because there are plenty of choices in the market. I also read the forums to find more information.

Here are few tips I have found:

You can get a mortgage even from a bank branch in a different town. When I bought my first home I found from my sister that a Scotia bank branch in different town was offering better rate. I spoke to the officer faxed application form and she sent the documents to a branch in my town to sign the documents.

When I bought my current house, I found a broker who said he will the beat the rates offered by any other bank. But I made a better deal with him because my sister and I bought new houses at the same time. So I asked him to give better deal since he will be getting commissions on two mortgages. We both applied separately and got our approvals separately but we got better rate. So if you have a family member or friend looking for a mortgage at the same time you may be able to negotiate better rate with your mortgage broker.
When it was time to renew the mortgage again, I found that I can actually have mortgage under the secured line of credit. That means no application, no discharge fee etc. I currently have my mortgage at TD bank under secured TD line of credit at 2.45 % even though my line of credit interest rate is prime+1%.

Consumer Rights

noreply@blogger.com (A.N.Rajah) — Fri, 15 Apr 2011 06:30:00 PDT

I came across the Canadian Consumer Handbook website. This was produced by joint collaboration of federal and provincial governments. It has lot of useful information for the consumers..

Your rights as consumer are protected under provincial Consumer Act. For example, your rights as a consumer in Ontario are protected under Consumer Protection Act of Ontario. The Consumer Protection Act governs most common consumer transactions in Ontario. But there are other legislation that provide protection to the consumers as well. For example if you are buying a motor vehicle , your rights are covered under Motor Vehicle Dealers Act in Ontario as well.

Ontario Ministry of Consumer Services website provide lot of information. It has information on consumer rights and how to report complaints etc. Here are some of the interesting points that may be useful.
.

Door to door sale

§ If you sign a contract in your home, you may cancel within 10 days by giving notice of cancellation. Provide this notice by e-mail, fax or registered letter or by hand delivering it (try to obtain a signature upon delivery). Be sure to keep a copy of your letter. The company has 15 days to return your money and is responsible for picking up the product or paying for the cost of sending it back if the company wants its product returned.

§ If your agreement contains an estimate, the final price cannot be more than 10 per cent above it, unless you agree.

Big ticket items;

§ Deliveries must be made on time. If the company doesn’t make delivery or start service within 30 days of the date stated in the agreement, you can cancel the agreement at any time before delivery or start of service. You lose the right to cancel if, after the 30-day period has expired, you agree to accept delivery or allow the company to start services. If the agreement does not state a date, the 30 days run from the date the agreement was signed. Again, you lose that right if you accept delivery or start of service after the 30 days

T4A for Registered Education Savings Plan (RESP)

noreply@blogger.com (A.N.Rajah) — Thu, 07 Apr 2011 07:34:00 PDT

Here is a question from Pam.

I contributed to my daughter’s RESP for 10 years and I was told RESP contributions are not tax deductible. My daughter started college in 2010 Sept and she withdrew some money from RESP for college expenses. She has received a T4A. Why does she has to pay taxes on the withdrawal as I did not get any deduction when we contributed?

Answer: Yes, you are correct that RESP contributions are not tax deductible. She is not paying taxes for withdrawing the contribution you made. She is paying taxes on withdrawing Canada Education Savings Grant(CESG) and income earned (income earned on grant and contribution) over the years.

Lets look at a simple example. Father contributed $2,000 to son’s RESP and received $400 CESG. Over the years that contribution and grant earned $500 income. When the son decided to withdraw funds from the plan, the balance was $2,900 ($2,000 contribution+$400 CESG +$500 income). Son withdrew the full balance and he will receive a T4A for $900.00 (CESG+ income earned). Usually beneficiary’s income level is low and in addition beneficiary will have tuition and education credits and will not pay any tax on the income from T4A.

Which tax package should I use?

noreply@blogger.com (A.N.Rajah) — Mon, 04 Apr 2011 06:30:00 PDT

I received a question from one of my friends last week and thought of sharing my response here. He has worked in two provinces during the year and wanted to know which tax package he should use.

In general you determine the tax package of the province or territory you lived on Dec 31st of the year. But if you had residential ties in more than one province or territory on December 31^st, you should use the province or territory where you had most important residential ties.

Residential ties include where your home (owned or rented) and personal property are and where your spouse or common-law partner or dependants reside. Other ties that may be relevant including social ties, driver's license, bank accounts or credit cards, and provincial or territorial hospitalization insurance.

Here are some other exceptions.

§ If you are filing a return for a person who died in during the year, use the package for the province or territory where that person resided at the time of death

§ If you emigrated from Canada during the year, use the package for the province or territory in which you resided on the date you left.

§ If you lived outside Canada on December 31, but maintained significant residential ties with Canada, you may be considered a factual resident of Canada. Use the package for the province or territory where you kept your residential ties.

Dissolution of Parliament: what happens next?

noreply@blogger.com (A.N.Rajah) — Thu, 31 Mar 2011 13:33:00 PDT

I thought of sharing what I read from Deloitte weekly highlights:

As a result of the dissolution of Parliament on March 26, 2011, all incomplete business in both the House of Commons and the Senate was terminated, including government bills. There were no government tax bills on the order paper at the time of dissolution. The legislative proposals contained in the March 22, 2011 budget also “died”, but they may be reintroduced by the next government. It is noteworthy that the future federal corporate tax rate reduction to 15% as of January 1, 2012 remains intact at this time as this amendment was already enacted at dissolution. Outstanding draft tax amendments published by the government but not yet introduced into the House of Commons are not affected by the dissolution of Parliament. However, the decision as to whether to proceed with those proposals (as well as with the corporate rate reduction) will be made by the next government.

Courtesy: Deloitte weekly tax highlights

Tax deduction for qualified home buyers - Home Buyer’s amount

noreply@blogger.com (A.N.Rajah) — Mon, 21 Mar 2011 21:23:00 PDT

Image via WikipediaAre you a first time home buyer? You may be able to get a non refundable tax credit for 5K for your home purchase.

If you meet the following qualifications, you can claim the 5K tax credit in your tax return.

you or your spouse or common-law partner bought a qualifying home; and
you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).

The amount can be claimed in Schedule 1 (line 369) of your tax return. The amount can be shared but the total amount cannot exceed $5K.

Here is the definition of Qualifying home from CRA website

A qualifying home must be registered in your and/or your spouse's or common-law partner's name in accordance with the applicable land registration system, and must be located in Canada. It includes existing homes and homes under construction.

The following are considered qualifying homes:

single-family houses;
semi-detached houses;
townhouses;
mobile homes;
condominium units; and
apartments in duplexes, triplexes, fourplexes, or apartment

OOPs Over Contributed to RRSP.....

noreply@blogger.com (A.N.Rajah) — Tue, 15 Mar 2011 06:52:00 PDT

If you have over contributed to your RRSP or spousal RRSP, then fixing it faster will reduce interest and penalty charges. But before panicking… get the all the relevant information.

Contribution made in the first 60 days:

You may not need anything if you have contribution room for the current year. If you have contributed 5K in Feb 15^th 2011 and realized that you only have 2K contribution room for 2010. Don’t panic. You can use it for 2011 tax year without any penalty if you have contribution room for 2011. You have to ensure you have room in the current and you don’t exceed current year’s contribution room.

Contributions made from March to December and realized over contribution in the following year.

If you have contributed 2K or less over the limit and you meet following conditions, then you are allowed one time over contribution up to 2K

1. You are over age of 19 in the year you made the contribution and

2. You have never had excess contribution before

You won’t be able deduct contribution in your 2010 tax return but you can use it for 2011 or any future years provided you have contribution room in those years and there will not be any penalty or interest assessed for the over contribution.

If you have contributed more than 2K or already used the 2K provision previously, then you have to file T1-OVP form and pay the interest. If you pay the interest by March 31^st 2011 you will not be assessed penalty. It is your duty to complete the form and remit the funds to your tax centre. The interest will be 1% for each month and penalty will be 5% of the balance due.

You can also check with your financial institution whether they will reverse the contribution. If it is within a month or so they may reverse it but if it is longer than that time they may not be inclined to do that.

TFSA and tax slips

noreply@blogger.com (A.N.Rajah) — Thu, 10 Mar 2011 06:30:00 PST

I received a question from a reader whether he would receive tax slip for his TFSA contributions or withdrawals or income earned in TFSA. No there will not be any tax slips for TFSA except for some estate beneficiary scenario. Any contribution to TFSA is not tax deductible either. That means you will not get a contribution receipt. Any growth within the plan is tax exempt and withdrawals are not taxable either.

Summary

1.TFSA contributions are not tax deductible.

2. Income earned in the TFSA plan is tax exempt (except certain estate beneficiary scenario).

3. TFSA withdrawals are not taxable.

If your spouse is successor holder of your TFSA, your plan will be changed to your spouse’s name after your death. No tax consequence to you , your estate or your spouse and it will not affect your spouse’s contribution room. But if you have named a beneficiary in the plan other than successor holder then any income earned after the date of death is taxable to the beneficiary and beneficiary will receive a T4A. If the beneficiary contributes to his or her TFSA it will use up his or her contribution room (except for spouse as beneficiary and not successor holder). You can read about what happens to your TFSA at death here.

Are you planning to Net File your income tax return for 2010? – Here are the software options

noreply@blogger.com (A.N.Rajah) — Mon, 07 Mar 2011 06:30:00 PST

CRA each year publishes the certified softwares available for each year. When you click the each tax software product, it lists restrictions as well. It helps you to choose the proper software for your needs. The list has different sections fo Windows, Mac and web applications.

Windows:
AceTax, eTaxCanada, FutureTax 2010, GenuTax Standard, H & R Block At Home, Impôt Professionnel, myTaxExpress, StudioTax 2010, TaxFreeway, Taxnic, Taxtron, TurboTax (previously QuickTax), UDoTaxes 2010, UFile

Web applications: (for Windows and Macintosh)
5dollarTax, AceTax Online, EachTax.com, easyCTax, eTaxCanada Online, FileTaxOnline.ca, H & R Block At Home, TaxChopper 2010 from CuteTax, Taxnic.ca, TurboTax (previously QuickTax), UFile Online, WebTax4U.ca

Macintosh:
TaxFreeway, TaxTron

iPad:
TaxFreeway

Here is some the recents blog posts about Canadian Personal Tax Softwares available

TurboTax Review by Canadian Finance blog

Top Canadian Tax Software Reviews by iSoftwareReviews

CD & Download Tax Software by Canadian Tax Resource Blog

Twitter Contest winner

noreply@blogger.com (A.N.Rajah) — Mon, 07 Mar 2011 06:25:00 PST

Winner of the Twitter contest is Chrissie123123.

Double dip on the promotional offer – MBNA Platinum Plus Smart Cash Card and Great Canadian Rebates

noreply@blogger.com (A.N.Rajah) — Thu, 03 Mar 2011 18:21:00 PST

Update May 7th : Great Canadian Rebates is now running a new promotion for this card with rebate of $60.00 again.
Incase you are looking for a referral here is my referral link.

I was in the market for a credit card and decided to do some research. I wanted to get MBNA Platinum Plus Smart Cash Card. My husband got this card last year and we really enjoy the card but problem is that I have to go for groceries with him or he has to get second card on his account. There is no additional incentive for spending higher amount on that card so I decided to get my own card.

I applied through the Great Canadian Rebates. They have a promotion of $60 rebate for MBNA cards approved up to March 31^st 2011 and I received the promotion through MBNA that I can earn 5% rebate on groceries and gas for next 6 months and after that it will be 3% rebate and all the other purchases will get rebate of 1%.

Here is the list of merchants (post 395) you would get 3% rebate (5% during the promotion). Please note some users have confirmed receiving 3% rebate. for Walmart Supercentre purchases as well.

What I like:

It has no fee but some insurance coverage (one of the best among the no fee credit cards).
Account is updated real time. If you purchase something you will see the purchase as a temporary authorization. This helps to monitor your purchases and prevent errors posted in your account.
24 hr customer service. I had called them midnight to resolve issues.
Can buy gift cards from grocery stores or Gas bars and use it at the other stores to get rebate.

What I don’t like:

Some times you have to be on hold for long time to get customer service person. (This rarely happens)
Most of the customer service staff are knowledgeable but some are not. To resolve the issue you have to call again or request it to be escalated to a supervisor (I have used MBNA card for few years and this has happened twice).
Rebate is issued as cheque instead of posting it to the account. There will be a time lag to get the rebate.

image of credit card from mbna.ca

Common mistakes made in the personal income tax returns

noreply@blogger.com (A.N.Rajah) — Mon, 28 Feb 2011 16:14:00 PST

Small income amounts not included in the income

Some financial institutions will not issue T3 or T5 slips, if the income amount is small but you still have to include it in your income tax return. Example: BMO will not issue T3 if your income from the fund is less than $50.00 and the income is other income. Some times you will not get T5 slips for interest earned in your savings accounts but those need to be added to under interest income in your tax return.

Joint account income not allocated according to contribution

Usually joint account incomes are allocated equally but it should be allocated according to the contribution made by each person. For example David and his dad opened a GIC and dad contributed $8K and David contributed 2K and they earned $200 income for 2010. David’s portion of the income is $40 (20% of the income) and dad’s portion of income is $160.00 ( 80% of the income). David should only include $40.00 in his income.

Allowable deductions or tax credits not claimed

There are some expenses that can be claimed as deduction from your income.

Here are some examples (I have provided summary description but there are detailed rules regarding deductions.):

Childcare expenses - Incurred due to parents working or going to school. Spouse with lower income must claim the amount unless it meets the exception rules.

Moving expenses – You moved more than 40 Km to be closer to your new work. Business. You can deduct certain expenses related to moving against the income earned in the new location. The amount that can’t be deducted can be carry forward to the next year.

Carrying charges and interest expenses – Fees paid to management of investment, interest paid on investment loan (provided investment income is not 100% capital gains) and safety deposit box charges.

There are some tax credits that can be claimed. Here are some examples:

Public transit amount – You can claim the amount if you have purchased monthly pass, weekly pass or electronic payment cards that meets the CRA requirement.

Children’s fitness amount - Amount paid for eligible fitness programs can be claimed up to maximum amount $500/ child.

Any info received after filing the income tax return not adjusted

If you receive any tax slips for income that you did not include in the income tax return the return can be adjusted by filing T1 Adjustment Request.

Follow me on Twitter to enter to contest to win $10 Pizza card

noreply@blogger.com (A.N.Rajah) — Sun, 27 Feb 2011 13:47:00 PST

Follow me on Twitter to enter to a contest to win $10 Pizza card (valid Pizza Pizza or Pizza 73). Contest ends March 5th 2011 at 9.00 pm EST.

Don't lose reward points to inactivity

noreply@blogger.com (A.N.Rajah) — Sun, 27 Feb 2011 09:01:00 PST

Here is an interesting article on Moneyville by Ellen Roseman -- Don't lose reward points to inactivity

Yes you can lose value of hard earned points if you don't follow the rules. I have personal experience with Sears Club points. I did not lose a lot but lost few points. But when I called they were able to reinstate the points expired in the last 3 months.

Some times there are easy ways to keep your points active.

1. Buy small purchase to keep the account active

For example Aeroplan Miles, you can just buy Quacker or Tropicana products with Miles code and use that to keep your Aeroplan points active.

2. Transfer to different reward points. For examples Sears Club points can be transferred to Petro-Points.

RRSP contribution refund calculator

noreply@blogger.com (A.N.Rajah) — Sat, 26 Feb 2011 16:43:00 PST

A friend of mine called last week and wanted to know how much refund she would get for RRSP contribution. She needed the information to decide on how much RRSP loan she is going to apply for. The refund one would get will depend on the marginal tax rate of that person. But it is not a simple answer as the marginal tax rate will go down when your income less (that is when you RRSP contribution reduces your income). Therefore you may get less refund that what you calculated based on marginal tax rate.

Here is a calculator by Ernest & Young that can calculate the RRSP refund (please these are approximate number).

If you need actual number you need to do the tax return for both scenarios (without RRSP contribution and with RRSP contribution)

Please note the deadline for RRSP contribution for 2010 is March 1^st 2011.

Daycare business – How to do the Personal Income Tax Return?

noreply@blogger.com (A.N.Rajah) — Mon, 21 Feb 2011 16:33:00 PST

I have seen many home daycare providers do not know how to report their income and expenses. Gross income has to be reported in line 162 and net income in line 135 of T1 General Return (I have chosen Ontario Link). Make sure the software you buy has T2125 form. You can deduct business related expenses to arrive at net income.

Image by neuroskeptic.blogspot.com

Here is a list of some expenses that can be deducted:

Supplies

Kids meals

Business use of home office

Field trip expenses

Professional fees (accountant, lawyer etc)

Office expenses

Salaries.

Keep your receipts incase CRA comes for audit.

CRA site has wealth of information on this

Upcoming Canada Pension Plan (CPP) changes

noreply@blogger.com (A.N.Rajah) — Wed, 09 Feb 2011 17:15:00 PST

There are several changes that are coming to effect in 2012 for CPP. Here are some of the links that provide details on the changes.

http://www.hrsdc.gc.ca/eng/oas-cpp/changes.shtml

http://www.moneyville.ca/article/935873--how-cpp-changes-may-affect-you?bn=1

http://www.moneyville.ca/article/915043--retire-now-or-later-how-cpp-changes-affect-you

https://dir.rbcinvestments.com/pictures/account-tom.caldwell/cpp%20changes.pdf

http://www.hrsdc.gc.ca/eng/oas-cpp/changes.shtml

Personal Tax software- Studio Tax

noreply@blogger.com (A.N.Rajah) — Sun, 30 Jan 2011 16:40:00 PST

There are many personal income tax software packages available in the Canadian market. In my opinion the best overall software is Studio Tax. I have tested it for the last two years. It worked very well and it is free. The link is given below.

http://www.studiotax.com/en/main.htm

This year, they are also providing a trial version for professionals. You can prepare first 20 returns free and use e-file facility as well. Since I am starting a part-time tax practice 2011, it will be an opportunity for me to test the software and try e-filing. I will post my review comments once I have used the professional version of the software. Here is the link for the professional version.

http://www.studiotax.ca/Default.aspx

Warranty and after Sales Service - Personal Experience

noreply@blogger.com (A.N.Rajah) — Wed, 15 Dec 2010 17:14:00 PST

I bought a Samsung Galaxy Vibrant in Sept from Best Buy and the service is through Bell. It was working fine except few times it froze. No big deal. But then it stopped working last night. I could not “ON “it or charge it. Ok first call to Best Buy where I bought the phone. The rep asked whether purchased a replacement plan and I said “no” then he said you have to go to Bell for service.

Ok then went to a Bell store on my way to work and the sales rep said that I have to go to a Bell store with repair centre. Ok then went to a Bell store with repair center and the rep said they have to send it to Samsung and it will take 6 weeks. If I pay monthly $25.00 they will give a loaner phone. He said he is aware there are problems with the Samsung Galaxy Phones. So I asked why I have to pay $25 for loaner where as they are already aware the model has problems. He asked me to call the customer service. Then I called the customer service and got a rude customer service person and she said it is our standard policy you have to pay $25 for loaner phone. We will not waive the fee and it will take 3-6 weeks. Then I called Samsung and the rep said they need long timebecause they have to ship the phone to the repair centre which is very far but he does not know the location of the repair center ( I am not sure how he knew it is far away). They can't provide loaner and I should check with Bell.

So each company put the blame on teh other company but none did care about their service or ulitmate customer.

I asked few of my coworkers and friends for their experience. One of my coworkers had a similar problem with a phone purchased at Costco (service through Bell) but Costco provided a loaner without any question.

Another friend bought a smart phone from Rogers and it did not work and they tested it and replaced it immediately. All these days, I thought Rogers provides crappy service but seems Bell is worse. I do understand phones do break and they need to repair but Bell could at least give a basic loaner phone for its clients.

I did not except them to repair the phone in 2 days But what I expected is to repair it 2 weeks or give a basic loaner phone for the time.

When you purchase goods and service check about after sales service.