taxdetective-Sandusky-Register

Treasury Bills are always something it's necessary to look up when it comes to accounting for tax.  Is it interest or is it capital?

If it's disposed of AT MATURITY, any difference between what you paid and what you received as proceeds is interest income.

It's when you dispose of it before matuirty, that you may also have a gain or loss on account of capital.
and they don't make it easy to find... but here in T4037 is where you find how to calculate how much is interest and how much is capital:
http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html#P821_67887

First you have to know your purchase price and the effective yield rate and how many days you held it and the number of days in the year you sold to calculate how much is interest income. 

Then the difference between how much you sold it for less interest less what you paid for it is a capital gain or loss.

Globe interview about use of social media

To do:  Start summer reading list:

Canadian Credit Institute articles

The 2012 budget included something that is going to increase how much tax you pay for 2013.

Employers who paid for these benefits on your behalf, not those who deducted these premiums from your pay cheque will be required to add that benefit to your income for 2013.

Do you know how much those contributions are currently? 

Ask your employer (payroll dept) if the premiums don't appear as an employer paid, but tax free for 2012, benefit shown on your pay cheque.  Since your employer just paid those premiums for you, you may never have known how much was spent on that benefit for you.

Wage loss replacement benefits paid by your employer will continue to be a tax free benefit.  That's because when you collect on that type of insurance, if your employer paid the premiums, you will pay tax on any claims on that policy.

If you paid those premiums for wage loss replacement yourself, any resulting claims would be tax free income.  If you aren't sure whether you pay the premiums, look for LTD (Long Term Disability) It should show up as a deduction from net pay.  If you don't pay the premiums, if you have a claim on your LTD, your income from that insurance plan will be taxable to you.

http://www.cra-arc.gc.ca/gncy/bdgt/2012/qa06-eng.html

That's where you'll find me presenting once or twice a year, on various topics to do with accounting and tax, often with a focus on using Intuit software products, QuickBooks, Quicken, Profile. I enjoy  presenting at both Computer User Groups, Vancouver at Hycroft and in Cloverdale the Fraser Valley group.

Here's where to find out more information about these groups:
https://www.cga-bc.org/members.aspx?id=5314

As you'll see on the above link, I host a tax study group, and it meets online. The Canadian Virtual Tax Study Group is only for CGA's  and we meet once a month. There is a maximum of 15 participants. Here's where to find more information and remember this is only for CGA's. http://www.taxdetective.ca/taxclubs.html

This month and next, is a two part series on estates, accounting and tax.  I've just finished reading the CCH publication, The Executors HandBook and am looking forward to this and next month's meetings. You can join in to the discussion, plus you'll get access to my TaxLinks Pro Portal for only $30 per month.

The portal subscription is $30 annually, if you don't want to join the tax study group, with an annual subscription renewal when I change the password each October 1.
http://www.taxdetective.ca/catalog/item/8512122/6259277.htm

If you aren't a CGA, I'm introducing a new tax discussion group, called TaxDetective Boot-Camp, with a similar format. The first topic is medical expenses. This month's meeting on June 25th might interest you! (PS: if you are a CGA, you can claim your PD points)
http://www.taxdetective.ca/BootCamp.html

In mid May this year, a student taking the Canadian Payroll Association Management course chose Box 85 on the T4 as her research project. She contacted me by email, asking me to share more of my story as she'd come across information on my website that intrigued her.

After her presentation was completed, and she scored almost perfectly, Arlene and her employer were thrilled to share her presentation, both the MP3 recording and the written report with me and with all of you.

If you work in payroll management and haven't adopted a mandatory reporting for your employees, please listen to Arlene's report carefully, as she shares how much her organization has saved by adopting this strategy of full disclosure for their employees!  All I can say is WOW and if you haven't adopted full disclosure for Box 85 on the T4 yet, what's stopping you?

Thank you Arlene Jamison, PCP and St. Joseph's Health Centre for allowing me to share this with all of you.  St. Joseph's and their staff are very fortunate to work with Arlene.

Arlene's MP3 presentation (you might want to SAVE this to your desktop rather than open it as it might take some time to load as it is 6 MB):
http://db.tt/Uxdx3rGN

Arlene's 2 page written report: (not the same as the presentation) (31 KB word file)
http://db.tt/gUqb0PKa

Many of you may not know that one of my more passionate lobbies to the Minister of Finance has been to create a mandatory reporting of Extended Health and Dental Premiums on the T4.  It took a few years, but in 2007 or 2008, Box 85 was added as optional. It's never been made mandatory as someone complained about the compliance required.

I believe reporting in Box 85 should be made mandatory instead of optional, and in addition, I believe as an employee, you should receive a full reconciliation of everything that reduces your pay cheque from gross pay down to net pay. 

How else can you review what you're paying for out of your pay cheque?  It never ceases to amaze me how almost 40% (yes, that's over $30,000) of my husband's pay as a teacher in Vancouver, BC is funneled off to a multitude of other purposes, some of which we may never benefit from, and some of which we may pay into but never see a dime if we don't live long enough to collect.

It's no wonder that gov't can persuade other professionals to work on contract by forcing them to incorporate as "Personal Services Businesses" to avoid onerous employer contributions to pensions, benefits, and gov't programs.  That's the employer contributions on top of the employee contributions deducted from net pay.

Did you know that insurance agents and financial planners tell you you'll only need 80% of your current income to live on because 20% of your gross is being syphoned off to a variety of 'employee benefits and pensions, plus CPP, EI and Tax and if you don't live long enough, you'll probably see minimal benefit for all those contributions?

But back to the story of Box 85. In about 2004 I started writing to the Minister, asking why, since Union Dues were a mandatory reporting box, why weren't these premiums paid to private health plans equally important to be reported as paid to third parties by the employee.  After all, the premiums in many cases would breach the 3% of net income threshold for the family, and permit any extra costs for dental or other medical expenses not covered by the insurance to be claimed. 

Remember, and this is where many people don't realize that the wording of what you can claim is tricky. The key thing to remember, there is NO ceiling on how much you can claim. There is a threshold or minimum amount paid for medical expenses and that includes these premiums, that must be crossed before you can start to claim your expenses. I always use the example, of the millionaire who has a heart attack in Texas. The open heart surgery costs $200,000 and all but the threshold amount, which tops out at about $2,000 is fully claimable. Yes. $198,000 is claimable.

You don't have to believe me, it's on this fact sheet for 2011, you'll see that the medical expense tax credit 3% of net income ceiling is $2052 and for 2010 it was $2024.
http://www.cra-arc.gc.ca/nwsrm/fctshts/2010/m12/fs101201-eng.html

Check out the annual practitioners letter to send to clients!

CGA-Canada has posted its analysis of yesterday’s budget, along with several products, including its annual practitioner’s newsletter.