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Marry an Accountant... Or Buy these Videos (if you can't find an accountant to marry that is)

Marry an Accountant...Or Start a Spousal Makeover (these videos are that powerful, they will turn your spouse into an accountant)

Rotary Auction on Delta Cable this weekend: Are you an auction fan? You'll find the Master QuickBooks Video Series is being auctioned off in the Delta Cable Rotary Auction on December 3, this Saturday coming up, with proceeds to my favorite local not for profit organization, Earthwise Garden.

Life events, transitions, times when things change, click here for a useful list with links to information that might benefit you or someone you know

Did you know there's a CPP Child Rearing Drop Out Provision?

Employers are invited to a free webinar on CPP changes December 7, 2012

Changes to CPP for contributors ages 60-70

Click on the title above or here to: open the video.  This link is for a one hour meeting hosted on GoToMeeting this morning, to review the latest release. We found about 20 new features, some of which could be declared to be things we could get ecstatic about!  The new batch invoicing (as long as you aren't using Multi-currency, at least at the moment, stay tuned for upgrades) and Balance Sheets by Class are just two of the many improvements and new features.

If you like this video, you might also like Mastering QuickBooks Software, 10 videos, 2 hours each, which take you through best practices for using the software from a new company to reporting and security.  Why? Because you need information for making important decisions about your business.

Just posted on the CRA Website!

So who thinks they can persuade their doctor to certify in writing the infirmity for one or more of your dependent relatives?  Who might that be?  Any one of these five categories of dependent for whom you currently claim a personal tax credit on your tax return:
Your Spouse
Your Child (multiple)
Your Eligible Dependent (can't double dip here with child though)
Someone who you claim as Infirm over 18
Someone you claim under the Caregiver Amount

For an explanation of these credits, see RC4064 or the TD1 federal, (you'll have to wait for 2012 form in mid December) which should provides amounts and limits.

Each of these credits will get a $2,000 federal tax credit boost, worth $300 per dependent for 2012, that is, if you can persuade a qualified medical practitioner to certify infirmity.

If you can certify this early in 2012, watch the TD1 form, as you may be able to pay less tax at source, and have the $300 during the year, instead of having to wait until April 2013 for this amount.

Of course Wall Street gets it, they'll even tell you, it's right in this article. It's our tax code and the choices we make about how we arrange our affairs to cope with those rules.  Our tax system is not only so complex, it's designed to shape our choices. The people who draw up the rules will even tell you that's what they are doing. 

Why do you think we in Canada were introduced to a new tax credit this year called the Family Caregiver Amount?  It's designed to bolster up the perception that we're going to care for our family at home. This credit is designed to make sure we're making looking after family members a priority as are most of the other tax credits, designed to guide us because they know something we may not have figured out.  The message is that we can't afford to keep all those boomers in care facilities.  There aren't enough beds.

If I'd known as a teen what I know today about tax, I probably would have made completely different choices about how I arranged my life.

Our education system, at least here in BC, not sure about the rest of Canada, but ours doesn't provide teens with the opportunity to learn about tax.  Not saying that what they learn in school isn't valuable, but it sure isn't practical in terms of life skills if it doesn't include a healthy dose of how tax is going to affect the rest of your teens life.  Remember, tax free day isn't until when? June or something?  A huge chunk of what we earn goes to taxes.  Doesn't that deserve airtime?

We don't shares with teens how to complete a TD1 and why, so they can ask their employers to reduce the tax taken at source when they first start to work.

I doubt we talk about the long term dangers of the underground economy and how the choice to work for cash can influence a person's ability to ever even get a mortgage to own a home. Just ask any banker, and they'll tell you sad stories about people who only report $30,000 as income and now want a mortgage. The banks want nothing to do with them.

Why? Qualifying for a home in Vancouver, not on $30,000 income, unless there is a stash of cash for a huge down payment.  And the potential of questions by CRA...where did the money come from for you to afford that address?  Think they aren't watching? Hah.  CRA has a program that compares addresses and last names for who lives with who to find rental suites. It's only a short step from there.

Why do only commerce students and accounting students study tax?  Tax influences how all of us make choices, the least we should do is to expose our teens to how the system works, let them use their imaginations to find ways to use the system to their advantage.  After all, if you want to give them a leg up, studying tax code, that's what the folks on Wall Street did.

This announcement precedes more technical documentation to follow. 

It will be interesting to see if this is something I'd pursue given my age and income and aversion to risk.

Does the title make you want to buy the book?

Please tell me what you think. eileen@taxdetective.ca

My book is going to be published soon, and we need a short, sexy, two or three word at most, title:

Does this make you want to buy?

Intimate Details

Your Guide to Taking Control of Personal Finances

If spouses are involuntarily separated as one is in a care home for example, reversing spousal CPP split to the spouse in the care home when that was advantageous could increase the GIS by about $200 a month. 

Watch to make sure that not splitting the CPP doesn't increase the tax beyond what you'd expect, about 10%, in my example, their tax went up $500, in exchange for $4,800 of GIS...and definitely watch out for the potential for OAS repayment on line 422 of your tax return. 

If you want to try out your numbers, use TurboTax Online for free, just use SIN # 000000000 to run a trial return for both spouses for free.  You don't pay unless you file.

Take out your OAS before using this calculator (click above on the title to access the calculator and calculate for single instead of married if involuntarily separated)

Also complete
SC ISP-1811 Statutory Declaration - Separation of Spouses/Partners
NCC001 Statement for OAS and CPP Involuntary Separation
Applications for GIS for prior years
3025 (2009)
3026 (2010)

You can call for forms, 1-800-277-9914 or find the forms online and some are even fill-able online to print and send, saves on handwriting the information.

Click on Home page, select Forms from other on the right side,
then find the Forms page link to search for forms.
If you just search on the main website, none of the forms come up.

Alternatively: Click here for the direct link to the Service Canada Forms and type those form numbers in the search box.

Not only that, but if you hire a caregiver, or have a home office, those could void it too! That is, if you haven't put a rider about non family living in your home, or business use of your home...

Thanks John, for the great administrative reminder...

Work sharing initiative with EI topping up employees who work a reduced work week, interesting idea... extended to October 2012

Why would you send back the documents to the client before the return is even completed its re-assessment process instead of forwarding them to the next section for review?

I'm not amused.

CRA has a form, T1ADJ, for adjusting, line by line your requests for any changes to your tax return.  This form can be generated in the tax software we use, by creating an original return, taking a Snapshot, and then populating the form.  The software generates a form that ensures that every line that changed is recorded for easy cross checking with the re-assessment notice.

Heaven help you if you want to adjust two taxpayers whose adjustments rely on each other's adjustments to be processed at the same time.

You want to adjust someone's return, or let's say you want to adjust more than one person's return...and what happens on the one return affects what's eligible to be claimed on the other person's return.  Let's use an example, where because one spouse has been admitted into a care facility, you are asking for the pension split to be reversed.  This reversal results in a spousal transfer of unused credits from one spouse to the other, which is new.  So, you submit not only a cover letter with the two adjustment forms for the two taxpayers, but you also submit a Schedule 2 for spousal transfers.  And you wait. 

What happens at CRA's processing centre is that the two returns are separated and go off to two different places to be processed, not at the same time.  Let's say that the spouse who is supposed to get the credits that result from this adjustment, doesn't qualify for those credits yet, because the first spouse hasn't had their return adjusted.  The processing staff pumps out a re-assessment, ignoring the request for the spousal transfer, not checking to see if the other spouse's return has been processed yet, and your taxpayer gets an invoice to pay way more than what you said would be owing.  The clients pay, mostly because they spend all day at the care home and have no time to deal with paperwork, and don't even check to see if what you said they would owe is what was assessed.

It's only a fluke that they happen to give you back the NOA's and you check them against what you submitted, and find, to your horror that none of the spousal transfers occurred, and that the client has overpaid $2,000.

There does not appear to be a quality control assurance process at CRA to ensure that what you request to be amended is actually amended.

Moral of the story, check every re-assessment, as it seems there is no guarantees that what you requested is what was amended.

If you are self-employed, these links are useful. Last year I presented a workshop on completion of T2125 and haven't had time to go back to visit that materials.

If you are looking for a speaker for your business group, this presentation might be just what you're looking for.

If it is, contact me to book a workshop in the spring.

I recently attended an www.ipbc.ca online workshop on tax for truckers. The presenter, Robert Scheper, THR Consulting Group Ltd., explained the disparity in expense claims between self-employed truckers, and truckers who work as employees, whether for their own company or someone else. It was very interesting.  He's written a book "Making your Miles Count: taxes, taxes, taxes.

There is another challenge Robert did not mention in the workshop, and it's one that's become interesting for contractors in the IT industry who contract themselves out under their own corporation, much like truckers do as owner/operators.  They may not meet the criteria to claim the small business deduction, and they may not be able to claim other business expenses, because they are considered a personal services business if they don't have at least five full time employees, plus other criteria, which you'll find in my Personal Services Business webpage.

I found an hour tonight to research and create a list of links from the CRA website to explain the differences.  Basically, an employee is able to claim a flat rate reimbursement for certain expenses, whether or not they spent the money.  As an incorporated employee, you would deduct those expenses prior to issuing a T4 for net earnings. How much less you'd pay tax on, would depend on how frugal you are.If you live on peanut butter and jelly sandwiches, it sounds like there could be a distinct advantage to incorporating. I'm not recommending anything here, just saying do the math, and be wary of other rules, like the Personal Services Business rules. 

If your corporation is just a wall between you and the company you work for, the personal services business rules may apply. If that's the case, your company can't deduct anything you wouldn't deduct if you were an employee who had a contract directly, and everything else the company paid for would end up on your T4 as a benefit, plus anything you left in the company as retained earnings would end up being taxed at the highest corporate tax rate. On the Canadian Tax Foundation LinkedIn Group we've been having a discussion about PSB's and their impact.  You won't find anything on the CRA website unless you know what to look under, as PSB's don't get a direct mention.  I've put a link to my other webpage on that topic on this trucking page.

Other considerations: WCB may deem that it is the company that hires your company that has to pay the premiums for WCB. Plus, as a corporate employee, you don't qualify for EI, and the new self-employed EI rules allow for self-employed persons to pay in and claim EI benefits.

If you like to read about tax, or you're concerned you won't meet your non-verifiable hours of PD by the end of the year, you'll find lots more links pages like this one under my TaxLinks Portal subscription, which has an annual expiry date of September 30, and sells for $30 plus tax.   

Click here to buy a subscription now to start reading more about tax!

Did you attend more than 2 conventions this year?  Here's the link to the rules.

The ground just shifted under your feet... Check out the transitional rules in the e-Alert from McCarthy Tetrault

And... for more on NPO's, visit my NPO website page found under my Complimentary Links at www.taxdetective.ca.  This page includes a report from the panel discussion I hosted for my CGA Chapter (right at the top). The discussion was about NPO compliance with various laws, not just payroll, and sales tax, but Income Tax too.  Just because you're an NPO, doesn't mean you don't have to report and in some cases, on more than one form.

Did you know that NPO's may be required to file a T2 to prove they aren't profitable and that they may be required to prove they aren't profitable by filing a T2 every year?  That's in addition to their other reporting.

If you are self-employed,

you'll be paying $178.20 more for CPP contributions

...of course, that's only if you're earning contributing the maximum because you earn $50,100 in 2012.

Good luck with that.