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