A few updates that you should know about…
(Please Note Update for 2019 Tax Year – The mileage rate is 58 cents for the first 5,000 kilometres and 52 cents for the balance of the kilometres.)
2018 only…Automobile, the kilometre allowance went up a cent so it is now 55 cents for the first 5000 km and 49 cents for the balance. Remember, if you are paying by kilometre you must have an auto log.
If you don’t have one you need to get one. From your my account you can retrieve your notice of assessments, CRA will send the status of your return to your My Account, you can get balances of home buyer’s plans, RRSP limits …all kinds of great information. Now you can get a mobile app “My CRA” try it!
CRA tends to send out requests for documents and they may not give you a lot of time for this, don’t panic just call the number on the letter and request for more time, they are good for that.
As of March 19th, 2018 CRA is jumping on the Airbnb wagon, they will be ensuring that this home-sharing income is reported. This is considered rental income and must be claimed. In fact, all sharing economies are being looked at i.e.: ride sharing, music and video streaming, online staffing, peer/crowdfunding are to name a few that these sharing services must be claimed as income when earning income from these, if not CRA considers it underground economy which may attract fines, penalties or even jail times.
Payment Arrangements with CRA
Payment arrangements, CRA is cracking down on payment arrangements, Last time I dealt with a situation for a client, the collection officer said, before we will even discuss it, I want to see cashflow statement, net worth, a letter from a bank stating they will not loan any money to this client. If anyone is struggling to pay their debt with CRA there are two tools you can use to see what you think they will allow.
*One is a Payment Arrangement Calculator – this will estimate the payments and time needed to eliminate the debt
* Two is Income and Expense Worksheet Calculator this helps calculate the part of the one’s net income that is available to pay the tax debt
Lots of these are happening, why? They are trying to catch any firm that had employees and are now subcontractors so if your payroll dipped down most likely you will receive a letter asking to provide payroll information and bank statements with cheques. No need to panic if nothing like this has happened. If you did move people off payroll and are now subcontractors a few things must take place for them to be true subcontractors. There is a guide on CRA’s website Canada.ca called Employee Versus Subcontractor and it will tell you the status of both to confirm if you can move them to be a subcontractor. The other situation you have is if CRA’s status says yes, they can be a subcontractor that does not mean WSIB will determine that they are a subcontractor so you need to do a status determination with WSIB using different criteria. Please ensure you do this, so you are not on the hook for WSIB especially when you didn’t plan for this.
Another issue that has come up more and more and that is the amount of final returns that are happening, when a loved one dies, and you are the executor there is a big responsibility to making sure things go smoothly. On CRA’s website type in What To Do When A Loved One Dies . There are forms to fill in so that everything goes smooth.
Celebrating 25 years in Business!
Open house! We are having an open house Nov 23rd from noon to 6pm. I must apologize, for those who have been to my office, our parking lot is now going to be torn up a bit due to a pipe needing replaced and construction starts Nov 7th, however, they will have a pathway for us to drive back to our unit, I do apologize for this inconvenience. I can guarantee once you pass that mess you will arrive at our office and inside we will have amazing good food and the first 100 people will get a little gift. I hope you can join us to celebrate our 25 years in business! We are excited, and I want to thank all my amazing clients because of you I have grown from just me alone to 6 people – soon to be 7 !
Kelly Melanson CPA, CMA