Chartered Professional Accountant, Experienced Bookkeepers, Personal and Business Tax Return Specialists - Whitby ON - Call - Toll Free: 1-800-942-5558 or Local: 905-666-5071 admin@kmpc.ca
2021 Tax Returns – Tips and Helpful Information

2021 Tax Returns – Tips and Helpful Information

 February 2022

 Dear Valued Client,

Tax season is fast approaching!.  If you choose to email us your tax information, please send it to admin@kmpc.caWe also have a drop box for those that wish to drop off records without having to come in.  Just call us at (905) 666-5071 so we know the papers have arrived. You can also walk in the office and drop off documents.

 

 Tax returns are due April 30th

  (June 15th if you are self employed, however any taxes owing are due April 30th)

  •  If you moved:    We will need your new address.
  • If you eliminated your land line:  Let us know and provide us with your cell number.
  • If you sold your principal residence: We will need the date of purchase and proceeds of sale. 
  • (There should be no tax consequences, but Canada Revenue now requires this information).

Don’t forget to tell us if your marital status changed, added a new addition to the family, purchased your first home or started a Home Buyers Plan or tax free savings account. 

 Foreign Income/Pension:  Remember you must report your worldwide income on your Canadian Tax return.  If you paid any taxes to a foreign country, you may be eligible for the foreign tax credit.

 Rent or Property Tax:  To apply for the Ontario Trillium Benefit and/or Ontario Senior Homeowner’s Property Tax Grant you will need to provide us with your rent/property tax paid for 2021.

 Medical Expenses:  You may be able to claim dental/prescriptions/eyeglasses/physiotherapy and other medical expenses paid.  You can obtain a receipt from your pharmacist and dentist for 2021 payments.  If you have a plan which reimbursed costs, your provider should be able to give you an annual statement.  These documents will eliminate the need for us to sort through multiple papers/receipts to ensure your claim is accurate.

(Note: Covid related expenses need to be prescribed by a doctor to be eligible to claim).

 Home Accessibility Tax Credit:  If you renovated your home to make it more accessible or to function within more easily, you may be able to claim those costs.  A person must either be over 65 or be eligible for the disability tax credit to apply.

 RRSP contributions: Along with your March-December 2021 receipt, don’t forget to give us the receipt for your Jan 1/22 – Mar 1/22 contribution.  You may not receive this until later in March. 

Tuition: The T2202A tuition slip should be obtained online via the student’s school account. It is possible to transfer the credit to a parent if it is not fully used (up to a maximum amount).  The slip MUST be signed by the student for us to make the transfer to the parent’s tax return.

 Working from home deduction:  Canada Revenue will be extending the option to use the simplified method of claiming $2 per day to a maximum of $500 for employees who work from home more than 50% of the time for at least 4 consecutive weeks.  For those to which this would apply, please calculate the number of days to provide us so we can include the claim.  No supporting documents or form T2200S is required.

 Employment expenses:  If you choose to use the detailed method of calculating your workspace in home deduction then a signed form T2200S will be required from your employer.  If any other expenses are being claimed (i.e., vehicle/PPE supplies) then a completed form T2200 will be required from your employer.

 Support payments:  If you entered into a separation agreement in 2021 and paid spousal support, please be advised that Canada Revenue will request to see the agreement and proof of payment before they process your tax return.

 Climate Action Incentive Credit:  In the past years this credit was refundable and either reduced your tax owing or increased your refund.  For 2021 the Government has proposed to pay this credit in quarterly instalments starting July 2022.  We will apply for this credit for you.  For couples, the credit will be paid to whoever’s tax return is processed first.  The amount can vary, depending on your family situation.

 The Ontario Staycation credit:  This does not start until the 2022 tax year.

 For those with business and rental income, please visit the “Form Downloads” tab on our website to download the appropriate spreadsheets.

  

Office hours starting March 1st, 2022:

  • Monday to Thursday: 9:00 am to 5:30 pm
  • Friday:  9:00 am to 4:30 pm
  • Drop box is open after hours

 If you have any questions regarding the above, please call the office. We look forward to seeing you soon!

Thank you for being our valued client.

 The KMPC team.

The KMPC team specializes in helping companies grow via strategic financial management practices. Since 1993, KMPC has been helping businesses in Whitby, Oshawa, Ajax, Durham Region and the Greater Toronto Area (GTA) to reach and surpass their profit goals.

If you would like to speak to us regarding  Business Accounting, financial  retirement or tax planning, tax returns, bookkeeping or any of your other  please contact us anytime – we’d love to chat with you.

KMPC– Chartered Professional Accountant, CPA 11 Stanley Ct, #13 Whitby, ON L1N 8P9 – Local: (905) 666-5071 – Email: admin@kmpc.ca  Web: https://kmpc.ca

Spring 2021 Newsletter – Tax Season is Just Around the Corner!

Spring 2021 Newsletter – Tax Season is Just Around the Corner!

Tax Season is Just Around the Corner…

It is hard to believe that tax season is here already! Covid 19 has made the past year challenging on so many levels. The pandemic has even impacted the complexity of tax returns this year.  In order to make the process of filing your taxes less confusing, I have recorded a video to explain how our office is managing the client tax return process, as well as giving some insights on topics like CERB and work from home tax claims.  Please take a few moments to watch the video so you can be prepared for the upcoming tax seasonClick this link to watch the video.

STOP THE PRESSES!!!!

CRA has just announced some updates that could affect YOU.  Watch this 3-minute update so you have the information you need for your tax return this year… click here for the update

KMPC is now offering online consulting services. Conveniently accessible from our website, you choose which timeslot works best with your schedule and book it right on our website!
Take a look… 

New Webinar – Coming Soon!

In response to the many discussions I have had with clients over the past few months regarding the pressures of the Pandemic on businesses, I will be offering an online webinar series that will showcase concrete strategies that business owners can use to lessen the strains resulting from the challenging new landscape of the pandemic. Please visit the information page on our website to learn more about the webinar series and to sign up for the series.

The KMPC team specializes in helping companies grow via strategic financial management practices. Since 1993, KMPC has been helping businesses in Whitby, Oshawa, Ajax, Durham Region and the Greater Toronto Area (GTA) to reach and surpass their profit goals.

If you would like to speak to us regarding  Business Accounting, financial  retirement or tax planning, tax returns, bookkeeping or any of your other  please contact us anytime – we’d love to chat with you.

KMPC– Chartered Professional Accountant, CPA 11 Stanley Ct, #13 Whitby, ON L1N 8P9  (905) 666-5071 

Email: admin@kmpc.ca  Web: https://kmpc.ca

Summer 2019 Newsletter

Summer 2019 Newsletter

The weather is starting to look more like summertime so, I thought this would be a great time to send out our KMPC newsletter to keep you up-to-date on all the news before it’s time to head off to enjoy your summer fun!

Feeling Green?  Well You May Be in Luck If You Purchase A Zero Emission Vehicle

The government has recently said that they will provide rebates for those people who buy zero emission vehicles. Effective as of May 1, 2019, the federal government is providing point of sale incentive for consumers who buy or lease an eligible Zero Emission Vehicle (ZEV).

Which ZEV’s qualify?

  • Battery-electric, hydrogen fuel cell, and longer-range plug-in hybrid vehicles are eligible for an incentive of $5,000
  • Shorter range plug-in hybrid electric vehicles are eligible for an incentive of $2,500

How Do You Access This Incentive?
The purchase incentives for zero-emission vehicles will be applied at point-of-sale (i.e. at dealerships or online) directly on the bill of sale or lease agreement of eligible vehicles purchased or leased. Your dealership will be responsible for completing the documentation required to receive the incentive. The federal purchase incentive for zero-emission vehicles will be applied in addition to any provincial zero-emission vehicles incentive offered.

Sound interesting? You can view the information on this exciting ZEV incentive initiative here

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Health Spending Accounts – Does Your Business Qualify?

CRA has noticed several businesses improperly claiming deductions related to Health Spending Accounts (HSA), and it is now starting to review for proper usage. If you are considering using a HSA be sure that you qualify. Here are a few tips to assist you to evaluate suitability and eligibility:

What are HSAs?
HSA’s are self-insured health plans arranged by employers for their employees residing in Canada. They provide a way that small businesses can provide tax-free health and dental benefits to their employees (and their employees’ family members). This makes the HSA appear to be an extremely attractive and cost‑effective way of getting and providing health and dental benefits. However, a valid HSA plan must conform to private health service plan rules set out in the Income Tax Act. 

What HSA’s Are Acceptable?
Incorporated businesses, including shareholder employees and all other corporate employees, are eligible to participate in an HSA. Corporations with as few as one employee can be eligible as well. However, the HSA cannot be solely for shareholders unless the shareholders are also employees earning a T4 income.

In the case of unincorporated businesses or sole proprietors, the owner and their employees are also eligible if the owner has at least one arm’s-length employee.

If the business is a sole proprietorship with no arm’s-length employees, the CRA does not consider a HSA to be a private health services plan and any costs incurred for amounts paid to this account are not deductible business expenses.

Do you think that a HSA might be a good fit for your business?  It’s always a good idea to review all the qualifying criteria with a qualified Certified Professional Accountant.  Contact us if you would like to book a meeting to discuss utilizing a Health Spending Account for your business.

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Is All Employer Provided or Reimbursed Clothing A Taxable Benefit?

The short answer – no.  CRA does state that there are a few exceptions in which clothing, clothing allowances or reimbursement are NOT considered a taxable benefit.

Your employee does not receive a taxable benefit if either of the following conditions apply:

1) You supply your employee with a distinctive uniform (distinctive being defined as a uniform would not be typically worn in settings other than work) they must wear while carrying out the employment duties
2)  You provide your employee with protective clothing (including safety footwear, reflective vests and safety glasses) designed to protect them from hazards associated with the employment.

If you reimburse or pay an accountable advance to your employee to buy uniforms or protective clothing and require receipts to support the purchases, the reimbursement or accountable advance is not a taxable benefit if:

  • the cost of the uniforms or protective clothing is reasonable
  • by law, the employee must wear the protective clothing on the work site

Therefore, an employer reimbursement of safety footwear would generally not be considered a taxable benefit. However, a reimbursement of clothing expenses meant to compensate an employee for increased wear and tear on clothing that does not meet the exceptions – that would generally be considered a taxable benefit.

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CRA Focus Areas to Note

  • Indirect Income Verification: Testing and Assessing

CRA has stated that it is ramping up its Indirect Income Verification (IVI) testing and assessing when initial reviews seem to indicate that an individual appears to have more income than that year’s tax return shows.  So, it’s important to ensure that you are capturing, or accounting for, all your income streams in your tax return or you be the focus of an IVI testing or assessment.

It appears that this initiative is bearing fruit for CRA as they claim 36% of the small to medium businesses tested show some discrepancies in reporting and 20% of those are enough to become the focus of a full assessment by CRA.  A full assessment is a through investigation requiring verification through bank statements, credit card statements and receipts reviews.

  • Limited Reviews of Line Items

This practice has been a trend within CRA for the past year or so. Basically, the CRA selects a line item on the tax return form and randomly selects businesses upon which to conduct a review of their details on this line item.  So, if you have not been crisp and comprehensive in your bookkeeping, documentation and receipt collection, you could find yourself having to produce proof that your return calculations are accurate. If you are unable to do so, the outcome could range from a disallowance of claimed costs to a thorough assessment of your entire tax return for that year and perhaps even additional years. A staggering 40% of those who are selected for a random review proceed to an additional assessment by CRA. Save yourself time and stress, do it right the first time and keep all your records and receipts!

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Welcome to Our Latest Team Member!

Julie Herbacko – Executive Assistant – We would like to extend a warm welcome and introduce the newest member of our team to those of you who did not meet Julie at the reception desk during this tax season.  Julie is the first face you see upon entering KMPC and the welcoming voice on the phone when you call our office. Her background working in fast-paced business settings, along with her outstanding customer service skills and attention to detail make Julie a valued member of our team. Welcome aboard Julie!

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Do You Have A Topic Idea?

We would love to hear from any of our KMPC client family on topics that YOU would like to see as the focus for a future blog/article/newsletter.  Over the summer we will be creating our editorial calendar for the next year and we would really like to include topics that cover a range of interest.  If you have a suggestion or idea, please email it to us at admin@kmpc.ca .  Thank you!

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Summer Hours

Please take note of our special summer hours, effective immediately:
Summer Business Hours are: 9:00 am – 4:30 pm Monday to Thursday
Please note that we will be closed Friday’s from June through August.

The entire KMPC team wishes you and your family a fun and safe summer season!

KMPC: Outstanding Chartered Professional Accountant, Bookkeeping and Tax Preparation Services

The KMPC team specializes in helping companies grow via strategic financial management practices. Since 1993, KMPC has been helping businesses in Whitby, Oshawa, Ajax, Durham Region and the Greater Toronto Area (GTA) to reach and surpass their profit goals.

If you would like to speak to us regarding  Business Accounting, financial  retirement or tax planning, tax returns, bookkeeping or any of your other  please contact us anytime – we’d love to chat with you.

KMPC– Chartered Professional Accountant, CPA 11 Stanley Ct, #13 Whitby, ON L1N 8P9 – Local: (905) 666-5071 – Email: admin@kmpc.ca  Web: https://kmpc.ca

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