taxdetective-Sandusky-Register

Are you a CGA?

Join CVTRC, a CGA only tax discussion group hosted online on the second Tuesday at 9:30 am Pacific Time, each month.

CVTRC (short for Canadian Virtual Tax Research Club) is a tax study group can provide a CGA with verifiable PD points for attending meetings online from your desktop or mobile device.

Join today, for the low cost of $30 for one month or save, pay $300 for a full year (save $30 and make a commitment to participate for a year), ...but even if you pay for only one month, you'll find many hours of non-verifiable reading for PD, with a password that's good until September 30 .

Why join, even just for one month?  TaxLinks Pro Portal is included with any subscription to the tax study group. TaxLinks Pro Portal expires each September 30.  Reading about tax will help you qualify for non verifiable PD points.

Call Eileen @ 604 943 7414 to discuss your options for personalized PD with you, the sole practitioner with no one to talk to, in mind!

Dear BC Politicians,

If we have clients who have not called their energy suppliers to remove the HST Residential Energy Credit from their energy bills, and they wish to report and pay what they owe, what would the process look like?

Would they have to remit the entire amount, and then claim a rebate, or can you simplify this for us as I am positive that the compliance on this was almost nil.

I blogged and wrote about it, but I'm sure it wasn't done.

For someone with a home office, who has energy bills of about $2500 a year, that's about $500 in credit over the period from July 1, 2010 to March 31, 2013.

Most people's home office is about 10 or 15% of their home, so this is about $50 or $75 they owe net of a reimbursement. Of course, if they all wait, and don't do this within 2 years of claiming the credit illegally, you could have a huge cash grab on your hands, at $500 x 400,000 = $20 Million, yes, it does add up quickly.

Yes, there are 400,000 small business's in BC, and a good number of them have home offices and yes, that does constitute a significant figure, as in 400,000 x $50 is about $2 Million dollars.

Can we please have a process that will clean this up and make it easy for people to comply?

We really don't need more red tape for the sake of $50 or $75 from each small business. And we really can't afford the ill will of $500 per plus penalties of 10% or 25% as currently set out in the legislation.

I can't believe what I'm seeing.

Same trip, same dates, two completely different insurance plans, same person.

Double insuring, it's a perfect recipe for serious trouble if there's ever a potential claim.

It's considered 'unjust enrichment' if you attempt to claim from both.

http://legal-dictionary.thefreedictionary.com/Double+insurance

I've always been annoyed that CRA charges for their views. I can't believe we pay their salaries and they charge us for their product, but I suppose it's a way to keep down costs.

That's why it was such a find today, thanks Eve (CGA Canada) for noticing this link

Here's a lawyer who is paying for CRA views to drive traffic to his website, so for now, it's free, but for how long? I called him, and he's paying over $30,000 a year for this privilege, so make it worth his while.

Did you know that to obtain these views, most accountants and lawyers pay CCH or Carswell anywhere from $1500 for a sole practitioner to many thousands per year to gain access?

The history isn't there, it's only current access since last fall I believe, but here you are, the inside scoop daily:

http://taxinterpretations.com/

Canadian MoneySaver is hosting information sessions for the full day at UBC in the Student Union Building. 

It's only $30 plus tax. (pssst...if you wait until April 1 to sign up it's only GST)

Why not sign up for a financial spa day?

Hear some great speakers, clear your mind to think about your money and your paper...

And come say hi! I'd love to meet you.

http://www.canadianmoneysaver.ca/

CRA has a tax tip about self-employment reporting today and that's great, but how and why do you go about complying with their rules?

http://www.cra-arc.gc.ca/nwsrm/txtps/2013/tt130328-eng.html?utm_source=mediaroom&utm_medium=eml

Do you feel overwhelmed by all the paper and all the rules!

I can help with the tools to learn about how to use QuickBooks and Quicken. I have webinars, making it affordable to learn how to keep records.

I can also help with designing your record keeping systems using QuickBooks, either desktop or online, and Quicken. That's for when you've learned how the software works, but now, you have no clue how to make that work for you. We look at what you're doing, and we custom design your system to fit what you're doing. It really helps if you already know how the software works before you start doing this. That's why I recommend the webinars before you start designing your system. This part will cost way more if you haven't watched the webinars first. The webinars are cheap by comparison, at $290.00 for a whole raft of stuff to help you learn first before you leap.

This February, I presented a webinar series on record keeping for non corporate business. For five hours we examined what it means to keep records for your business. This isn't about how to use QuickBooks, it's about how to comply with the rules.

Why do any of this? Why keep records?

It's simple really. It's to get financing. To save money so you can afford to stay self-employed and feed your family, and put a roof over their heads. No banker is going to look at you if you aren't keeping proper records. They'll want nothing to do with you. And most Canadian business's start with a $5,000 credit card. How ridiculous is that? Not, if you've just been laid off or downsized, and need to get some cash flow happening. The problem is that's a short term solution that isn't going to help you much in the longer term. And by then, if you haven't developed some good habits, you're going to end up in bankruptcy.

If you want to grow your business, and, even more important than just growing your business, get financing to fund that growth, or even just to get a mortgage to house your family while you're growing your business, these five webinars cover what you'll need to know about how to keep records so a banker will look at you seriously!

Being self-employed, it sounds so easy, but really, if you want to move beyond working in your business, to working on your business, there is so much to know about how and why you'll want to keep proper records so you can relax and succeed!

http://www.taxdetective.ca/keeping_records_business.html

During the reign of the HST in BC we who had home offices were supposed to notify our suppliers of energy to remove us from this residential energy rebate program as we weren't entitled to the entire amount, and would have to apply for a partial rebate.

I don't know about you, but I did contact my energy suppliers to remove the credit from my energy bills, but I never applied for the partial rebate. It seemed like too much trouble.

http://www2.gov.bc.ca/gov/topic.page?id=8F921DD0AA644FAA8B78618D2C73357E&title=Residential%20Energy%20Credit%20and%20Rebate%20Program

But now, of course, we're on record as a business premise with the energy providers, and there are differentials on rates for business versus residential users.

I plan to call them next month to ask if because I work from home and have this 'business' status is my rate charged for energy different than just a normal residential rate?

Will keep you posted.

It's tricky how the new PST works. I am SO NOT comfortable with what's taxable and what's exempt. Anyone else feeling that way?

Everything is couched in double negatives, or at least that's how it appears when you read it.

They don't say don't register, or you should register, they say you have the option to register and give a list of what you'd have to fall into in order not to register

... if ALL of the following apply..and here's the list of the 7 things that ALL have to apply:

1) you're located in BC, and don't have a business premise - e.g. you sell goods from your home
AND
2) you sell taxable goods or software, or provide taxable services
AND
3) you don't regularly sell liquor, vehicles, boats or aircraft
AND
4) you make $10,000 or less in gross revenue from taxable sales and services
AND
5) you're not a lessor
AND
6) you're not an independent sales contractor (no idea what that is and of course the BC Gov't website with the PST information isn't searchable) but somewhere else in the FAQ, they added real property contractor as not qualifying either
AND
7) you don't offer four or more units of accommodation

Why would you want to register?  To purchase your goods for re-sale exempt of PST.

If you  pay the PST on what you sell, and you meet ALL of the 7 criteria above, you don't have to register, charge and remit PST

I found this on the one page PST Registration Quick Reference PDF (it was emailed to me, may not be on their website, not sure as it's not very searchable)

Then, in the FAQ, there's an example of bakery, where the tax on taxable goods is $500, but sales are more than $10,000 for eligible goods. And they have to register. Now is that because their sales are over $10,000, or because they don't have a home location? No clue.

If the tax you collect per year is over $12,000, you must file monthly.

If you collect less than $12,000, but more than $6,000, quarterly or monthly

If you collect less than $6,000 but more than $3,000, quarterly or semi-annual

And, if it's less than $3,000, annual, semi-annual or quarterly

So, it woudl seem that if your taxable sales are under $42,857 (with 7% PST) you should be an annual filer, but may choose to file more often.

Has anyone received their filing frequency notification?

You'll be able to file oline at something called eTaxBC, and pay with internet banking.

There's a commission structure again too. Commission is similar to the old structure where under $22, it's the amount payable, between $22.01 and $333.33 it's $22.00 and over that 6.6% of tax to a maximum of $198.  $3,000 x 6.6% is $198 (maximum)

Everyone should make it their responsibility to look out for those around them, and that includes letting those around you know there are reasons to file a tax return, especially for low income families or individuals, there are incentives to file.

To name several, the GST Credit, the Working Income Tax Benefit, the Refundable Medical Expense Supplement. These three alone can add up to thousands of dollars in refunds if returns are correctly completed.

Then there's the credits for supporting other dependent family members, which got a kick of another $2,000 if those dependents are infirm. I've been writing about the family caregiver amount, $2,000 bump that equates to $300 per infirm dependent for the past year.

Read how one doctor feels about making sure his patients file their taxes and maybe there's someone in your family or neighbourhood who could use a hand in filing their returns to improve their financial situation? There are free clinics this time of year, and maybe if you helped them get organized with their paperwork, they'd get it done.

http://www.winnipegfreepress.com/fpnewsvoices/doctor-prescribes-tax-returns-to-low-income-patients-199490231.html?domain=fpnews

The latest federal budget is full of news about how they are going to be operating in a more 'austere' manner, and that probably means there won't be as much help for the low income filer who is behind on their filing for prior years. I encourage you to lend encouragement or even help someone get organized so they can file.

And kudo's to this doctor for being brave enough to speak up to say yes, this matters to the health of my patients, that they file and that they get the credits they are entitled to claim. How does your doctor react when asked to complete more paperwork?

What's next you ask? Great question. Keep an eye on the Mark your Calendar page on my website for an event near you.

Thursday's talk could change how you handle the paper in your life - forever.
www.protechtivity.ca

ProTECHtivity workshop is this week, Thursday, in Delta at the T&C (right by the tunnel)

There are at least two reasons to attend this full day workshop.

First, if you're an accountant or a bookkeeper, it qualifies for PD points...

Second, you'll be connecting with other people who think it's worth learning about how to save time by using technology to best advantage.

Third, you'll get a lifetime supply of my 24 Fillable Forms
(only if you attend my talk Too Much Paper | Never Enough Time)

And... there are prizes for random tweets, so use my Twitter ID @TaxDetective and #protechtivity hashtag and we'll monitor traffic for a door prize!

Use my guest promo code, for 20% off  | taxdetectiveguest | even if you don't attend my session...there are six speakers over the day and I'm really exciting about being part of this amazing event!  See you there.

Click here to visit the ProTECHtivity webpage to sign up now!

This isn't a new challenge and you aren't alone.

http://njnnetwork.com/2011/01/wife-of-canadian-with-disability-wins-historic-tax-case-against-cra/
I don't know if this is a solution, but here's Lembi Buchanan's plea, over 10 years after winning her case at the Supreme Court www.disabilitytaxcredit.com

The way our tax credit system is set up at the moment, doctors are being required to document claims for tax credits so you can get a reduction in your tax bill. Let's talk about this. What's the reason for this tax credit? Is it about giving you a break? Or is it about getting information about the health of families in our nation? One does have to wonder.

There's a serious flaw in this process.  First of all, doctors aren't tax experts. They don't know what the rules are. They are expected to not do harm. Is it really fair that we ask them to document the effects of disability or infirmity when patient's don't even live with the doctor?

The doctor may only see the patient every few weeks or months. Disabilities are often invisible. The only evidence may be anecdotal. The doctors aren't the caregivers, available 24/7, so how much do they really know about the effects of the impairment? Are we asking them to do something they don't have enough information to do? Why should this additional responsibility be put on those who care for our health. Not our financial health, our physical and mental health.

Doctors don't have time to care about your financial situation, nor should they have to. FYI, your doctor may be quite envious that you're entitled to these tax credits. Why? Doctors pay GST/HST on business expenses, and because they are exempt from charging tax, they don't get back input tax credits for some large business expenses like rent, and common area costs associated with their business.  They also pay tax on their top dollars earned at a much higher rate for every dollar earned than you do if you aren't in the higher income tax brackets. Doctors know that for a child with a disability, for a claim going back 10 years, there's possibly a refund for the family of over $30,000. Imagine how they feel. All they charged is $50 or $150 for form completion, and then they had to defend their request by completing additional extremely invasive questionnaires that you didn't even see. And they have patients who need them, patients who may die if they aren't getting enough sleep and make a mistake.

Now, in 2012, to add insult to injury, the federal gov't adds another requirement for documentation of the state of taxpayers health, this time in the form of another refundable tax credit, the 'Family Caregiver Amount' which is a federal credit of $2,000 added to five different types of dependants, providing the supportive family with $300 federal refund per dependant.  Spouse, child, parent or any relative over 18 with an infirmity, who lives with you, or doesn't live with you...all for a $300 tax reduction but that's per person. If you have several people in your family with an infirmity, you can claim that amount in addition to the usual dependant credit for each one you can get a doctor to write a letter for.

I don't blame doctors for being furious at tax preparers who suggest their clients ask the doctor if it's appropriate to complete a T2201 or a letter of infirmity. But hey, we are caught in the middle. Tax preparers don't know enough, all we know is what our clients tell us. We have an obligation to suggest they at least try to get the doctor to consider whether the claim is viable. I've heard stories of how doctors are furious with tax preparers for even suggesting or informing their clients these credits exist.

There has to be a better way than requiring our over-worked medical professionals from becoming advocates for taxpayers finances. I for one, was very frightened and am still coming to terms with the raw rage exhibited by one doctor at being asked about completing the disability form and/or a letter of infirmity. I have no idea where the rage came from, and can only assume something horrible happened and this request sent that doctor over the edge. How close to the same rage is your doctor? Do you dare ask for documentation of disability or infirmity?

Ask your Member of Parliament to have a discussion with their own doctor to see how far they get with requesting disability or infirmity documentation.. Let's get the discussion going on how this isn't a tenable situation and something has to be done to relieve the pressure.

Per Statistics Canada, a few years ago now, there were already 2.7 Million Canadians with a disability. How many doctors are there? What on earth are we thinking asking them to do all this paperwork on our behalf?

Here's a history of the progression from CGA BC's website:

http://www.cga-bc.org/about_us.aspx?id=21822

Members are being asked to answer a single question about our support for the merger. What do you think? Is this democracy? How should I answer this question?

Recognizing that the original merger principles still apply and that the CGA-BC Board is committed to protecting the rights of all of its members and students, do you support a merger between CGA-BC, ICABC and CMABC to create the Chartered Professional Accountant designation?

I have lots to read, and before I start, I am pondering...

Q: Does an anonymous poll of members using a survey company with what appears to be no security replace a vote? (of course the security may come after you vote, but I'm not testing it until I decide which way to vote)

Q: What's to stop someone populating the poll with multiple responses? (not that I'm going to try doing that, but someone might)

Q: If we merge, how can the board of the old association make promises on behalf of the new organization? Wouldn't that new merged board and the entire membership be starting fresh?

Q: What about  the people we've hired who have worked at the Association for many years? Is there any job security, and the rights of the current staff at the association, both BC and Canada? What's the cost of winding down / merging / can the Association cover those costs without having to sell the building? Will staff be promised jobs or will the Association be looking at payouts? What contracts are in place now?

Q: As for the net assets, and the intellectual property values? It's a Not for Profit Organization, so the members have no right to the assets or the IP. The new board of the new NPO will control everything. Innovation, creative process, unique identity, branding ...everything I've paid for with my dues for 27 years...

Huff and a Puff, gone, and 8 people I don't really know get to decide? Is this a threat or an opportunity?  Shall we wipe the slate clean? I have a week to answer. What would you do?

Q: If you purchase a passenger vehicle for $45,000 can you use class 10 rather than class 10.1?  This would allow you to claim CCA in year 1 at 15% on $45,000 + taxes rather than 15% on $30,000 + taxes.

A: Passenger vehicles are considered Class 10.1 if they are over the threshold, which is currently $30,000 plus the taxes on $30,000. A Passenger vehicle is a sub-set of motor vehicles that are specifically exempted from Class 10 if they are over the threshold. Motor Vehicles are Class 10, no matter what price. So, if you want to write something off as Class 10, it's necessary to own and use for the correct % the correct type of vehicle, a motor vehicle. See the CRA vehicle type chart for type and use% requirements

Q: Since the 'bus use in the year bought' is key in determining the type of vehicle, does that extend to the first year CCA is being claimed by the business?  eg.  Sole prop has owned vehicle for many years, but has not claimed CCA in prior years, but wants to start now.
A: The year you put a personal asset into use for the business, that is the year you would acquire the vehicle from yourself at fair market value. See the T4002 guide for more information.

Q: Auto accessories: floor mats, chrome bumpers, leather seat covers...these aren't considered part of allowable expenses, correct?
A: Correct, those are not maintenance and repairs, unless you are replacing something that was damaged
Q: Should vehicles that are <90% business use be shown on the sole prop/partnership books?
A: I record all the assets used by the business in the books in order to account for it's use, and ITC on CCA claims, so I can reconcile to the taxes each year.  In the workshop I showed a spreadsheet where I've reconciled the assets held on the books with the UCC for tax purposes, which may highlight where there are timing or permanent differences between what's recorded for accounting and what's recorded for tax purposes.

Q: Thank you so much for a Herculean effort, Eileen.  Would you consider moving vehicles into its own webinar and simply referring records-keeping attendants to it (as per other available webinars on your site)?  Having isolated and appended it has worked well and the amount of need-to-know stuff lends itself very well to a complete stand-alone topic.
A: Thank you for the lovely compliment. It was a lot of work to put this workshop together. It isn't the first time I've addressed this topic and it won't be the last. The web page in my TaxLinks Pro Portal is an ongoing effort.

As for how the videos are sold, I've done that in a way. If you look at the shopping cart, it's possible to purchase the videos individually or as a set.

Check out my shopping cart under Keeping Records. IPBC members will find that I'm switching to a new system. I'll be providing a promo code and you'll purchase at the main shopping cart on my website with your promo code. I'll be phasing out the old system, probably after tax season. It was getting way to expensive to have double the number of items, given that there are over 50 items for sale on my website, plus bundles, etc.

www.taxdetective.ca/ecommerce.html

http://www.taxdetective.ca/keeping_records_business.html

You move
Your banking information changes
Your marital status changes
Someone in your family who receives benefits is no longer eligible
Someone in your family dies
You leave Canada for more than six months
A child under 18 entitled to CPP benefits enters or leaves your custody

www.servicecanada.gc.ca/my-pension

There's something of note afoot on the CRA website and I haven't seen any official notifications, but then every so often I do take a break so maybe I missed it.

Last fall CRA announced they are going to undertake a review and overhaul of IT Bulletins and IT News. We're getting a whole new collection of technical publications called Income Tax Folios

Here's the introduction and discussion about phasing out IT Bulletins

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/ntrfls-eng.html

In preparation for that, they have provided a great listing which IT Bulletins apply to that section of the Income Tax Act by section:

It's called IT-INDEX and here's the link:

http://www.cra-arc.gc.ca/E/pub/tp/it-index/it-index-e.html

What's disappointing about the new IT Folio Index at first glance, is that they follow the Indexing system currently in place on the website, one which divides up taxpayers into groups, rather than dealing with topical pursuits, like meals, vehicles, home offices, personal service businesses as a topic, with discussion about the differences between the rules for the various taxpayer groups.

Maybe somewhere in this new work, they'll find a way to cross reference by topic, something which the current website is terrible at.  I don't know how many times I've been researching something under one taxpayer group and found myself under the rules for a completely different group, which has different rules for that topic than the ones for the taxpayer I was hoping to learn about.

Here's the taxpayer groups I'm referring to:

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/menu-eng.html

I give the team that writes the technical interpretations kudos for some amazing work over the years, and I know how difficult it's been with the myriad of changes in legislation, keeping up must be a huge challenge.

I'm really excited to be participating in this full day on productivity with Steve Dotto and the rest of the crew... check out the action packed day here: www.proTECHtivity.ca

And... sign up using this promo code for 20% off  |  taxdetectiveguest

I'm concerned about CGA's losses in the event of merger. And I don't know what we stand to gain.

Here's what I think we'll lose. Flexibility, cost control and our unique culture and national voice, and I'm sure others can add their concerns. I don't know what I stand to gain, other than maybe not being asked what the difference between a CA and a CGA is. To which I would answer, CULTURE.

Flexibility- I'm concerned that our flexibility in how education is made available will diminish. I'm concerned our flexibility to be mobile within our industry will diminish. One of the best things about being a CGA has always been the flexibility to obtain an education, and to get our practical experience in industry, not just in public practice, but then, we also had the ability to choose public practice later on. We don't know how that will continue or if it can be protected. There are things about this proposed merger that are being kept secret. As public practitioners we haven't been given any information about whether we'll have access to hiring students. I'm told the current CA office training model effectively discriminates against smaller firms.

Cost control - I'm concerned because I believe that CGA's have a better claims experience, and experience lower insurance premiums because of that. With a merger, how much will our cost of insurance go up because we're now associated with the big firms, with their big risk taking ability? How much will our dues be? How much will it cost to convert our websites, office stationery, advertising... who will be making those decisions? There won't be any competition to keep prices down.

Our culture and our national voice - If BC pulls out of CGA Canada, will CGA Canada continue to exist with only a few provincial associations? If we merge, that's the end of BC's financial support for a national CGA Association, and it's efforts in various research, education, lobbying on behalf of CGA's nationally, may be impacted in a very significant way. If you think that's nothing to be concerned about, take a look at how many CGA's there are in BC compared to the rest of Canada. That may change your mind.

It seems that as few as 8 people hold our CGA designation in their hands. I am concerned we don't appear to have a say in whether or not there's a merger. I don't think that's right.

If you're a CGA in BC, and someone who likes to have the choice to have your say, then email me, and I'll send you a form to complete and scan back to require a meeting to require there be a vote before a merger. A number of past CGA BC presidents are very concerned that this time there will be a merger, and it will be without any input from the membership.

And.. there's no reason we can't have an online meeting and electronic polling in this day and age. There's no reason to think that CGAs that aren't in the lower mainland couldn't participate in a streaming video meeting, or other technological wonders of the current age.