Tax audits keep people awake - would that be your employees?

In 2010, CRA began an annual letter campaign about rental, business and employment expenses

If your employees have been receiving these letters, and don't understand how the Canadian tax system works, it's going to cause frustration, fear, anger, stress... I'm sure you're getting the picture. And of course, they aren't going to say anything. They just won't be sleeping. And how much is that going to cost you in lost productivity and potentially safety? We all know that not enough sleep makes people not safe.

Not only does CRA conduct letter campaigns, they audit, by letter using what they call a 'desk audit' system, requiring taxpayers to submit the paperwork for specific line items on their tax returns.

I can help reduce the stress...but it's invisible, it may or may not even exist. How can I possibly help?

If your company has the will to make it happen, and a boardroom/meeting room plus an Internet connection with some sort of a sound system/projector, that's all we need.

Truth be told, the employees could be anywhere, all we need is for everyone to either sign in on their desktop to listen and ask questions either by speaking or chatting by typing, or it's possible to load a free GoToMeeting.com APP to an iPhone, iPAD or Android mobile device. The APP just got a significant upgrade this week.

Consider lunch and learn's like these for your employees (and yourself...)

How taxes work, an overview of income, expenses, tax credits including the new for 2012, Family Caregiver Amount. This new amount will provide a tax reduction of $300 per dependent, infirm family member supported by your employee. Spouse, child, parent, grandparent, any relative who lives with them and meets the criteria, and sometimes even ones who don't live with them that they support.

How disability claims work, an overview of the application form, the application process, and what it means financially to have an approved claim status, including as much as $90,000 in grants and bonds if they qualify to open an RDSP.

How medical expenses, child care, attendant care, disability supports works. There are over 150 medical expenses listed in RC4064, but there's no indication of the type of documentation required or enough about what it all means to make sense of all this information. Take an hour to review how to make a claim, what the limits and thresholds are, and what Box 85 could mean to your employees if you completed their T4 to include the premiums on their Extended Health and Dental Plan that you deduct from their pay cheque.

How employee expenses work. If your employees aren't even requesting a T2200 and you're requiring them to pay for their own home office costs without reimbursement, or they use their vehicles and you don't reimburse them as much as what CRA says you could, we should be talking.  We should be talking, not just to your employees, but to your team, in HR, Payroll and to the Controller. By caring enough to document the relationship with your employee for CRA by completing the T2200, your employees may be able to make claims on a T777 that will reduce the tax they pay. It's a raise in pay through the back door. But there are qualifiers. CRA sends out letters every year (see the link at the top of this post) requiring documentation. It's not enough to just make a claim, it must be documented properly to avoid even more stress after the fact.

Employee education is an awesome way to add value and to encourage employee retention without a huge cost. Online live webinars allow participants to engage with the presenter.

Review your employee list, look for who on that list is supporting dependent relatives, by paying for shelter, food, clothing, basic essentials, or childcare, attendant care, or expensive medical treatments. That's expensive. What if you could help by providing information they could turn into paying less tax, overall, and during the year, maybe even right now, if you were completing a T2200 and they knew how to document and complete a TD1, T2201, T1213, T929, T777 or T778...or claim their medical expenses (that's why you need me)

Next, it's necessary to review employment contracts and complete a draft T2200 to see how you would answer the questions. Would your employees be happy to make a claim for the extra costs you don't already cover? For example, if you provide an allowance that's included in their income, they should be able to claim their vehicle costs, but if they don't know how, they likely aren't making the claim. Same for home office.

Then call me for a quote. What better way to reduce invisible employee stress than with useful information they can document now, while it's happening, during the year to review with their accountant/tax preparer next spring? Show you care and they'll care about your business. And they'll be sleeping.  Tax audits keep people awake at night.