WARNING! Falling for a tax scam can cost you.

There’s no doubt about it, we are exposed to a crushing onslaught of scams in the form of letters, emails, and even newspaper ads. They provide ample opportunity for financial turbulence because if you fall for any of these scams you risk your financial security and your identity. Your best defense is knowing what to look for so this month’s newsletter is all about being scam-savvy. 

Know what to look for:

Did you receive an email from the Canada Revenue Agency (CRA) asking for personal information or to click on a link to get your refund?  Did you see an ad in the paper that claims you don't have to pay taxes because you are two different people for income tax purposes? Did someone sell you a donation receipt for less than the donation amount shown? These are all scams.

If you fall for a tax scam, you risk your financial security and your identity. Also, you may not be meeting your obligations under Canada's tax laws. The consequences of your action could range from embarrassment, to inconvenience, to serious legal trouble.

Read this month's newsletter using this link and find out how to be scam-savvy.  http://www.liwanpo.com/pdf/tax_advice/tax%20scam%20alert%202015.pdf#zoom=100

New 2014 Family Tax Credit for Canadians

Once again, we are happy to share good news for Canadians in the form of  tax cuts for families, this time it is immediate and will take effect in the 2014 and subsequent tax years. These changes give parents of children under the age of eighteen a new tax credit option. This new tax  credit comes on the heels of the previously shared Universal Child Care Benefit proposal for 2015 for children under the age of 6. Of course, there are rules and we have outlined them in this month’s newsletter.  

To find out more about how this may affect you this year, use these links to read the complete article ( look for  the red banner on the bottom left of our website home page) on our website, blog or twitter posts:

website:     http://liwanpo.com/index.php

2015 NEW - Universal Child Care Benefit for Canadians

Universal Child Care Benefit

In 2006, our Government introduced the Universal Child Care Benefit (UCCB), which provides all families with up to $1,200 per year for each child under the age of 6. The UCCB currently provides direct federal support to approximately 1.7 million families with young children.

Now, the Government is proposing to enhance the UCCB by providing up to $1,920 per year for each child under the age of 6, and introducing a new benefit of up to $720 per year for children aged 6 through 17.  The UCCB enhancements would take effect starting January 2015 and would begin to be reflected in monthly payments to recipients in July 2015, pending Parliamentary approval of the necessary legislation.

The July 2015 payment would include up to six months of benefits to cover the January to June 2015 period. About 4 million families are expected to benefit from these enhancements. These enhancements to the UCCB would replace the Child Tax Credit, starting in the 2015 tax year.

For this and other relevant information on Canadian Tax Matters, please use this link to our website and look for the red banner on the bottom left of the home page.
http://www.liwanpo.com/index.php

Tax Clearance Certificates - What you don't know can hurt you!

After the death of a family member, surviving relatives often face daunting challenges sorting and managing a deceased person’s affairs.  Not the least of these challenges is the need to meet the requirements of CRA for securing Clearance Certificates.  In light of this, we have dedicated this month’s newsletter to providing basic information regarding this somewhat complex process.  

Our July 2014 Newsletter contains questions and answers in detail:

- What is a Clearance Certificate?

- Do I have to get one?

- How do I get one?

- What forms and documents will I need?  

To get a full copy of this and other relevant Newsletters, use this link to our website and you will find this and other information on our Taxes Pages, under Personal Taxes. 

http://www.liwanpo.com/taxes_personal.php 

2013 Home Buyer's Plan (HBP) and Tax Credit

Home ownership for the first time buyer has become a significant cost challenge for most. If you bought a home in 2013, the Canada Revenue Agency (CRA) has a tax credit and a plan that may help you save on this purchase.  We hope that this month’s newsletter will give you the information you need to leverage this opportunity....

For this and other related Newsletters, please use this link to our website personal taxes page: 

http://www.liwanpo.com/taxes_personal.php 

Charitable Gifts - 2013 First Year for FDSC 25% additional tax credit

2013 is the first year for a potential 25% increase in tax savings on Charitable Gifts for First Time Donor's Super Credit

Our December 2013 Newsletter is all about how to save taxes, and there is interesting news for First Time Charitable Donations.  A new tax credit called the FDSC (First Time Donor's Super Credit) allows for an additional 25% in tax credits for qualified donors.  In addition there are other tax saving ideas for you to consider.  This message is especially important though, because the opportunity to use these saving options will expire at year end!   This is time sensitive information so use this link now to get all the details you need to see if these ideas work for you.  The link below will take you to the home page on our website, look for the red banner "Other News and Events" and click on the newsletter  2013 Time Sensitive Tax Savings

2013 Combined Personal Tax Rates

For those of us interested in getting a head start on preparing for our 2013 taxes, we are pleased to be able to provide a chart which outlines the tax rates for all levels of taxable income as well as personal Federal and Ontario basic credits and equivalent to spouse.  This chart also includes a tax update for Dividends.  To access the chart and other tax information please use the link provided, and as always I am only a phone call away for personal help:  Jacques Liwanpo CA Website

Did you buy a home in 2012? Check out this tax information

Did you know?

If you bought a home in 2012, you may be able to save on your taxes through the first-time homebuyers’ tax credit.

 This information is not necessarily “new”, but very well may still be “news” for some first time homebuyers. However, we are providing the following updated reminder to those who may have purchased a home in 2012. 

To qualify for the homebuyer’s tax amount:

•You or your spouse or common-law partner must have purchased a qualifying home; and

•You did not live in another home owned by you or your spouse or common-law partner that year or in any of the four preceding years.

 

If you would like more detail about this and other tax credits currently available to you, please visit our website http://liwanpo.com/taxes_personal.php

 

Canada Pension Changes: CPP, OAS, GIS Summary

It has been some time since we have had significant news from the Government of Canada, but as you may have heard, they are currently proposing to make changes to eligibility for OAS and GIS. In addition to this we have recently seen the implementation of changes to the Canada Pension Plan which I wrote about earlier.  I felt that this was important enough to write about again, so I have created a Newsletter with as much relevant detail as possible for both the CPP and OAS/GIS changes.  The February 2013 Newsletter is posted  on our website and you can use the links below to read the full article.

CPP Summary:

1. If you are under age 65 and already collecting CPP, but continuing to work you and your employer must now continue to pay CPP until age 65. 
2. If you are between ages 65 and 70 and continuing to work but elect to stop contributing to the CPP you must complete a form CPT30 for your employer AND SEND A COPY TO REVENUE CANADA.    If you do not elect to stop, you and your employer must continue to pay CPP until age 70.  (A copy of the CPT30 form is attached to the end of the Newsletter for your information)

OAS/GIS Summary:

The Old Age Security (OAS) Pension is a monthly benefit available to Canadian applicants 65 years of age who meet the Canadian legal status and residence requirements.  However, the Government of Canada is proposing to change the eligibility rules for the Old Age Security and Guaranteed Income Supplement payments.  If you were born before 1957 this will not affect you, but for the rest of us it may mean changing the way we plan our retirement years.    

As usual, we have posted this under the red banner on our website homepage. You can read this and other relevant articles using the link to the website homepage or our "Library" page for more details:

http://liwanpo.com/
http://liwanpo.com/resources_newsletter.php

As you know, I am always happy to hear from you so if you would like to discuss this or other issues, please feel free to call me.

Government of Canada is changing OAS eligibility

Currently the Old Age Security (OAS) Pension is a monthly benefit available to Canadian applicants 65 years of age who meet the Canadian legal status and residence requirements.  However, the Government of Canada is proposing to change the eligibility rules for the Old Age Security and Guaranteed Income Supplement payments.  If you were born before 1957 this will not affect you, but for the rest of us it may mean changing the way we plan our retirement years.

The Government of Canada has introduced measures to gradually increase the age of eligibility for the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS) between the years 2023 and 2029, from 65 to 67. However, those currently receiving OAS benefits will not be affected by the changes.  These and other changes will affect those born after 1957.  To find out more about these proposed changes use this link to read the entire article posted on the "Library" page of our website in the Newsletters section.

Government of Canada Proposed OAS and GIS Changes

2012 Ontario Healthy Homes Renovation Tax Credit

At last, seniors are getting a tax break on home renovations required to assist living at home.  And the good news is, this is not one of those one year only deals, this tax break is here to stay for now.  Here is the best part though, the 2012 Ontario Healthy Homes Renovation Tax Credit is not just for seniors with disabilities.  Any person over the age of 65 either as a tenant or a homeowner can make eligible renovations to their residences and qualify for this tax credit.   In addition, there is no income test to qualify and 100% of eligible expenses qualify.  Finally, this is good news for all seniors who want to live in their own homes longer, improve accessibility or be more functional or mobile at home.

IMPORTANT NOTE: For the 2012 tax year only, eligible expenses cover fifteen months from October of 2011 through December of 2012.  If you want to take advantage of the first year of this tax credit, you will need to do so before the end of 2012 if you have not already done so.

I have prepared a more detailed newsletter on this subject, and you can read the full article in detail using this link.  Look for the red banner on the lower left hand side of the home page and click on the article "2012 Ontario Healthy Homes Renovation Tax Credit".

http://www.liwanpo.com/

Be Mortgage Free Faster!

Yes, it really is possible to pay off your mortgage faster using these tried and true smart-money strategies provided by the money lenders themselves.  Reduce your Amortization period.  Make more frequent payments. Use your prepayment options.  To get more details on how this works in your favour, use the following link to read the full article, "Be Mortgage Free Faster 2012":
http://www.liwanpo.com/fin_personal_personal.php

This site also contains many other articles of interest on personal and business finance tips, tax tips and more.  Well worth your time to investigate what's available free to read. Jacques

2012 Taxes: Income Splitting and Attribution

Admittedly, not an easy tax subject to get your head around, but in the end can be well worth taking the time to understand and apply if the conditions are right for you.

In short, the Income Tax Act contains rules designed to eliminate the ability for a taxpayer in a high tax bracket to shift income to a lower-bracket taxpayer.  Knowing the rules and working within the restrictions can be beneficial but in general it requires the assistance of a tax professional to work out the details.  If you think you might benefit from income sharing, we can help you to work through any options that might apply.  For more details on this and other relevant tax subjects, please visit our website, Taxes pages. http://www.liwanpo.com/taxes_personal.php   

2010-2012 RRSP Contribution Limits

Once again at this time of the year, if not already underway, we need to consider RRSP contributions for the 2011 year.  This link provides a brief article on the limits for contributions set by Canada Revenue as well as deadline information.  As always, if you need assistance with RRSP planning, or to consider all of your options we will be happy to hear from you at (905) 881-6257.  To see this article in full please use this link to our website http://www.liwanpo.com/taxes_personal.php 
and look for the first article 10-12 RRSP Contribution Limits listed in red font

Should you incorporate?

Deciding to incorporate?

We are often asked for advice relating to the incorporation of a small business.

Incorporation is a business structure available to you to conduct your business activities. A corporation is a legal entity and is considered to be a separate person for tax purposes – it has to prepare its financial statements and file its own corporate tax returns with CRA.

Benefits of incorporation

1.  You are able to creditor proof your personal assets. You can limit your personal liability through incorporation by keeping your personal and corporate assets separate. Personal assets of the shareholders are not available to the creditors of the corporation. One exception would be where shareholders are required to give personal guarantees to banks, for instance.

2.      Deferral of taxes. Most small Canadian corporations are taxed at a  low rate of 15.5 % on the first $ 500,000 of active business income whereas individual tax rates can be as high as 46%. The low rate of tax provides the business with the opportunity to defer taxes until the funds are withdrawn from the corporation. The corporation has the incentive to retain surplus funds, for growing its business.

A corporation can also deduct accrued salaries or bonuses in its fiscal year even though paid out after the year end provided that payment is made no later that 179 days after the year end– corporate taxes are thus deferred to the following year.

3.      A $750,000 capital gains exemption is available on the sale of the qualified small business corporation shares.

4.   Different share classes may allow you to split income with family members, thereby reducing your tax burden. 

Drawbacks

1.       The costs of setting up a corporation and of preparing financial statements and tax returns

2.      Losses are trapped in the corporation and can only set used to offset future income from the corporation. They are not available for setoff against your personal income.

The general rule is not to incorporate until the business is profitable. You should always seek professional advice before you incorporate.

Retail Sales Tax on Insurance Premiums Post HST (Ontario Canada )

We have had several inquiries from clients regarding the application of the Retail Sales Tax since the implementation of the Harmonized Sales Tax (HST) in Ontario, Canada.

There is some confusion regarding Insurance Premiums which still attract sales tax at varying rates.  To put it simply, the Retail Sales Tax remains in effect and is, in fact unchanged, despite the implementation of the HST in July of 2010 in Ontario.  So, if RST applied prior to the implementation of HST, then it still applies currently.  However, Retails Sales Tax on insurance premiums is not part of the HST tax process and CAN NOT be used for Input Tax Credits for HST.

For more detailed information on this and other tax related matters, please visit our website at

www.liwanpo.com

Moving Expenses - are you missing out?

Are you missing out?  Did you know that if you move and establish a new home to be employed, carry on a business or attend full time education, you can claim moving expenses? In this article we cover the opportunities, rules and guidelines for claiming expenses not reimbursed, which you incur as a result of moving.   The article covers a full range of details covering the following topics:

- Eligible Moving Expenses

- The Rules

- Expenses you can deduct

- When your old residence is sold as a result of your move

- If your spouse or common-law partner sold the old residence

- Incidental costs related to the move 

- Costs to  maintain your old residence while vacant

- Expenses you can not deduct

- Mobile Homes

- Moving outside Canada

To read this and other tax information articles in full, please use the link to our website Jacques Link to  tax articles page http://www.liwanpo.com/resources_tax_news.php

   link to our website tax articles in full

Update for Canadian Investors

As we review 2010, one is struck by the divergence between the year’s gloomy headlines and the generally positive results shown by the financial markets. Some of the challenges facing the global economy during the year included the effects of the major oil spill in the Gulf of Mexico and ongoing concerns that some European governments will default on their debts. These joined lingering problems in the U.S. economy, including high unemployment, slow growth and an expanding government deficit. Nonetheless, many of the world’s major stock and fixed-income markets made gains during the year.

In Canada, the S&P/TSX Composite Index was up 13% in 2010 and benefited from strength in commodities such as gold, oil, copper and potash to become one of the world’s best-performing markets. U.S. equities also moved up, with sectors such as industrials and consumer discretionary products among the leaders. It’s worthwhile to note that those sectors are cyclical – they perform best during a period of economic growth. Overseas, equities in emerging markets and Asia also rose, while European stock markets were mixed. Equity indexes in those countries with the biggest debt problems were down for the year.

Why have so many markets rallied despite what seems to be an inhospitable environment? Stock markets are a leading indicator – they tend to anticipate future developments rather than reflect what is happening now. Judging by the results of the past year, equity market investors are expecting continued recovery and growth.

Indeed, there are several factors supporting a positive outlook. The economy has continued to grow in all major regions of the world in 2010, including Europe. Although government and consumer debt levels are a concern, many corporations are in good shape, with strong balance sheets. This has left them well positioned to take advantage of some of the key trends in the global marketplace – such as the robust growth in emerging markets. Bond markets are also pointing to a strengthening economy, as indicated by the increase in U.S. bond yields in the fourth quarter.

 

Of course, events may conspire to change this outlook. That is why I suggest  having a diversified portfolio tailored to your individual circumstances, and maintaining a long-term view for your equity investments.

 

IMPORTANT: Buy Business equipment by Jan 31/11 - 100% Write Off

Electronic equipment

You can write off 100% of the cost of computers.The accelerated capital cost allowance (CCA) for eligible computers announced in the 2009 budget allows businesses to claim 100% of computer costs (including systems software) purchased after January 27, 2009 and before midnight, January 31, 2011.

To qualify for this rate, the asset must also:
- be situated in Canada
- not used or acquired for use for any purpose before acquired by the taxpaper
- acquired by the taxpayer
- for use in a business carried on by the taxpayer in Canada or for the purposes of earning income from property situated in Canada
- for lease by the taxpayer to a lessee for use by the lessee in a business carried on by the lessee in Canada or for the purpose of earning income from property situated in Canada

PART II: Tax Tips you need to know now, before the year ends!

Part 2 in our series of articles geared towards an early start to planning for your 2010 taxes.

These articles are targeted to presenting what you need to know in advance to make the best use of available opportunities.  In this article we cover subjects such as charitable donations, tax-free savings account contributions, RRSP contributions, RRIF’s mutual funds and investment expenses.  To see the full article.  Please use this link http://www.liwanpo.com/taxes_personal.php