As many Canadians are going through the health and financial crisis caused by COVID-19, Canadian Government has taken following steps to help Canadian Tax Payers. These steps are temporary and more announcements will come in future if this pandemic continues for a long time.
Effective March 18, 2020 all employers facing revenue losses and to prevent lay-offs government is providing wage subsidy of 10% gross wages during the three month period up to a maximum of $1,375 per employee and $25,000 per employer.
For example if an employer will pay 13,750 in wages to an employee during a period of three months starting from March 18, 2020 will be able to deduct 1,375 in total from the payroll tax remittance for each employee and pay the balance to CRA. Maximum subsidy an employer can receive over these 3 months is 1,375 per employee and $25,000 in total considering all employees.
The Canada Revenue Agency will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.
The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.
Dear friends, as our services are classified as essential services we will remain open and continue to help our clients with our services and any questions they may have. However, most of our services are provided remotely with no in- person meetings unless it’s absolutely essential and all precautionary measures are followed. Please be assured our office is following all precautionary measures that are recommended by Public Health Canada including social distancing, use of masks and sanitizers etc. Our clients can drop off their documents and file at the reception or in a drop box with their name on it. Our files are regularly assigned to staff. All the questions and consultations are done via email or phone. We will keep updating our friends and clients with any government announcements and any changes in our operations from time to time until this crisis is over.
Toronto Downtown Office (New)
5700-100 King Street West
Toronto, ON M5X 1A9
Your 2015 Notice of Assessment will only provide you how much is your RRSP deduction and TFSA contribution room is for tax year 2016. But is this the correct amount you should invest. You may be able to minimize your tax owing or refund without maximizing your RRSP contribution. This is the time to contact us to find out how much you should invest in RRSP and TFSA and what are other options to maximize your current after tax dollars and your retirement wealth.
Permanent Insurance under the Old Rules allow greater tax free payout and quicker than under new rules coming effect from January 1, 2017.
We work with Canada’s topmost insurance companies, their Certified Financial Planners, Insurance Advisers and Wealth Management Experts to advise our clients on the tax, insurance and investments matters and help them maximize the wealth for their loved ones. There is no cost for a one on one meeting and no upfront cost. Just give us a call we will come to your office or home and will explain how permanent insurance and its generous tax advantages before Dec 31, 2016 can maximize your wealth and the wealth of your loved ones.
The taxpayers were already required to report the sale of principal residence if it was not a 100 % principal residence from the date owned by the tax payer. Effective 2016 even if sale of a home qualifies as principal residence for all the years from the date owned it MUST be reported on the tax return. Many of our clients consider it as an aggressive action by CRA, however, this action is intended to crack down individuals who don’t report the sale of properties resulting in capital gain tax. CRA has a reassessment period of three years from the date of the initial assessment after which any reassessment for that year can be considered as invalid. This becomes a big issue when a taxpayer does not report the sale of property treating the property as principal residence even though it does not meet the definition of principal residence. However, when CRA audits such type of taxpayers many times the reassessment period gets expired.
In a recent campaign CRA levied some $11.6 million in penalties to 2,500 taxpayers from BC and Ontario who were subsequently found to have demonstrated “gross negligence in failing to report their tax obligations correctly.” So many other tax evaders would have escaped as they were either not audited or were audited but the normal reassessment period of three years was passed. Therefore, to bring the fairness in the tax system and to crack down such tax evaders CRA has implemented this change of reporting the sale of principal residence which was required anyways if it was not a 100% principal residence throughout the period from the date of ownership. But the good thing is that there is no change in the taxation rules of the principal residence. So, yes it is an extra reporting required but eventually this is a step well taken for the good of the taxpayers in general
If a taxpayer was not a resident of Canada at the time of purchase of property and even though an immediate family member was living in that property the principal residence exemption will be disallowed for all the years in which the owner was a non-resident. When making the principal residence designation “1+ rule” is used to determine the principal residence exemption. For example, if a property was owned for 2 years and only one year it was ordinarily inhabited by tax payer then as per “1+rule” the property qualifies for full principal residence exemption even though the owner lived there for one year only. This “1+ rule” will not be available for any disposition by the non-residents after October 3, 2016 Again, this is to promote the fairness in the tax system as many Canadians leave Canada for ever or for a long period of time and subsequently purchase the residential property in Canada with one Canadian immediate family member living in Canada. Under the existing rules the non-resident buyer or owner of the property was allowed principal residence exemption for the years either he was resident of Canada and living in that property or his (her) immediate family member was living in the property while the property owner was non-resident for tax purposes. However, now the non-resident owner will not be allowed to claim principal residence exemption for all the years he (she) non-resident of Canada for any property sold after October 3, 2016.
In August 2016 CRA released a newer version of T183 a form that authorizes tax preparer to file electronically on behalf of the taxpayer. This newer version of the form has fields to provide the bank account number of the tax payer for a one time pre-authorized payment of income tax due. It is a question in the minds of the tax payer as to why this information is required by CRA and raising doubts in minds of taxpayers. Taxpayers are going to be unsure whether to provide the banking information to CRA or not. The good thing is that it is not mandatory but completely optional to provide the banking information on this form.
We hope you liked our blog on recent changes by CRA. We will appreciate your comments and will be glad to answer your questions.
Please note the information contained in this page must not be treated as a tax advice and a consultation specific to your tax situation must be received by either contacting Ish Jindal CPA Professional Corporation or your local Chartered Professional Accountant.
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