Adsum Accounting and Bookkeeping
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Adsum Accounting and Bookkeeping
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A tax organizer can facilitate the process of pulling together your tax information. This basic tax organizer is designed for new clients and allows you to enter your information right on the screen.* You can then print the completed tax organizer and bring, or fax , or mail it to the office.
* You must have Adobe Acrobat Reader to view
the Tax Organizer:
2010 Tax Tips from Canada Revenue Agency (CRA) Tax-Free Savings Account (TFSA) Pension Income SplittingCool cash for your tools!Apprenticeship job creation tax credit You're filing electronically - Keep your receipts! Save more money with public transit! Did you make a mistake on your tax return? Remember, tips are taxable income
Tax-Free Savings Account (TFSA) A Tax-Free Savings Account (TFSA) is a new way to set money aside tax-free throughout your lifetime. Any individual (other than a trust) who is 18 years of age or older and who has a valid Canadian social insurance number (SIN) can be a holder of a TFSA. The initial amount contributed as well as the income earned in the account (for example, investment income and capital gains) is tax-free, even when it is withdrawn. Your TFSA can contain different types of investments, similar to those in a Registered Retirement Savings Plan, such as Guaranteed Investment Certificates (GICs), bonds, mutual funds and stocks. Contact your financial institution for more information concerning eligible investments. TFSA contribution room accumulates every year. The maximum TFSA contribution room for an individual was $5,000 for 2009. For 2010 and 2011, your available TFSA contribution room is made up of three components:
Income earned in a TFSA. Income such as interest, capital gains and dividends accumulates tax-free in your TFSA and withdrawals made from your TFSA are not taxed. Except for certain transfers, any withdrawals from your TFSA, including the income earned, will be used in the calculation of your TFSA contribution room for the following year. Transfer your TFSA directly from one financial institution to another. If you have more than one TFSA, you can transfer funds directly from one of your TFSAs to another of your TFSAs without affecting your contribution room. The direct transfer must be completed by your financial institutions. If you withdraw funds on your own from one TFSA and contribute those same funds to another TFSA, the re-contribution will be considered to be a new contribution. As a result, your TFSA contribution room will be affected and you may be subject to a tax on excess contributions. TFSAs are different from regular savings accounts. It is possible to make multiple contributions and withdrawals throughout the year to your TFSA like you would with a regular savings account. However, your total contributions in a year cannot exceed your available TFSA contribution room for the year or you would be subject to a tax on excess contributions. This tax is based on the total contributions made to your TFSA in a year and not on the account balance at the end of the year. If you deposit more than your contribution room you will be subject to tax. If, at any time, your contributions in a year exceed your TFSA contribution room for the year, you will be subject to the TFSA tax on excess contributions. You are liable to a 1% tax per month on your highest excess TFSA amount in each month. This tax will accumulate until the excess amount is withdrawn. If you have excess contributions you should withdraw the funds immediately to avoid any additional tax
When you and your spouse or common-law partner file your 2010 income tax returns, new tax rules allow eligible taxpayers to allocate up to half of their eligible pension income (income that qualifies for the pension income tax credit) to their lower-earning spouse or common-law partner. To make this election, you and your spouse or common-law partner must each complete Form T1032, Joint election to split pension income.
Claim the part of eligible medical expenses you or your spouse or common-law partner paid for the following persons who depended on you for support:
The total of these expenses must exceed the lesser of $2,024 or 3% of the dependant's net income for the year, up to a maximum of $10,000. Take it to the limit!With RRSPs, you can start saving now for your retirement, education, or the purchase of a home. To view your RRSP deduction limit and other personal income and benefit information, log on to My Account at www.cra.gc.ca/myaccount. Beginning in 2007, RRSP must mature before the end of the year in which the annuitant turns 71 years of age (previously 69 years of age). Similarly, registered pension plans and deferred profit sharing plans will generally be required to commence the payment of benefits to members by the end of the year in which the members turn 71 years of age.
Did you know that being a tradesperson may make you eligible for certain deductions? Some of these are:
Keep all receipts and documentation to support the claims made on your return. If so, you have until midnight on June 15, 2010, to file your 2009 income tax and benefit return. You must pay any balance owing for 2009 on or before April 30, 2010, regardless of your filing date. If you earned self-employment income from a business you operate yourself or with a partner, you should report it on the T1 general income tax and benefit return. Keep adequate records if you are carrying on a business or engaged in a commercial activity in Canada. The records have to provide enough detail to determine your tax obligations and entitlements and have to be supported by original documents. If you receive income that has no tax withheld or does not have enough tax withheld for more than one year, you may have to pay tax by instalments. This can happen if you receive rental, investment, or self-employment income, certain pension payments, or income from more than one job.
Apprenticeship job creation tax credit Apprenticeship job creation tax credit is a non-refundable tax credit equal to 10% of the eligible salaries and wages payable to eligible apprentices in respect of employment after May 1, 2006. The maximum credit an employer can claim is $2,000 per year for each eligible apprentice. If your business hires an "eligible apprentice", you qualify to claim the credit.
The working income tax benefit (WITB) is a refundable tax credit for eligible low-income individuals and families. The maximum WITB for 2010 is $931 for single individuals with no eligible dependants, or $1,690 for individuals with an eligible spouse or at least one eligible dependant. These amounts vary for residents of Alberta, British Columbia, Nunavut, and Quebec.
If so, you may be able to benefit from certain credits, including:
It is important to note that non-refundable tax credits can only be used to reduce your federal income tax payable. If the total of your non-refundable tax credits is more than your federal income tax payable, you will not receive a refund for the difference.
You're filing electronically - Keep your receipts! You can use NETFILE to send your return over the Internet to the Canada Revenue Agency, or ask your tax preparer to use EFILE. If you prefer using a telephone, use the CRA's TELEFILE filing service at 1-800-959-1110, 1-800-959-1110. Filing your return electronically means that you don't have to mail your return. You also get your refund quicker, in as little as eight business days! Keep your receipts to support your claims. CRA may ask for them at a later date.
It pays to get fit!
You may be able to claim a non-refundable tax credit of up to
$75 based on eligible fitness expenses (to a maximum of $500 per child) paid to
register your or your spouse's or common-law partner's child in a prescribed
program of physical activity. If your child is eligible for the disability tax
credit, you may be able to claim an additional credit of $75 for that child. Tax perks for students!As a student, you may be able to claim a tax credit for the tuition fees you paid for post-secondary level courses you attended during the year. You may also be able to claim an education amount of $400 as a full-time student and $120 as a part-time student for each whole or part month you were enrolled in a qualifying program. In addition, you may be able to claim the non-refundable textbook credit to help with the cost of your textbooks. You may also be eligible to claim moving expenses, child care expenses, and a tax credit for interest paid on your student loans, as well as the non-refundable tax credit for public transit passes.
Save more money with public transit!Individuals can claim a non-refundable tax credit for public transit. You can claim the cost of buying a pass or certain electronic payment cards for commuting on buses, streetcars, subways, commuter trains, and local ferries. You will also be able to claim passes of shorter duration as long as they allow you unlimited travel for at least five days, and you buy enough of these passes so that you are entitled to unlimited travel for at least 20 days in any 28-day period. In addition, you will be able to claim the cost of electronic payment cards when you use them to make at least 32 one-way trips during an uninterrupted period not exceeding 31 days. You can include the cost of passes or electronic payment cards for yourself, your spouse or common-law partner, or your children under age 19. You need to keep receipts to support your claim.
You may be able to claim child care expenses on your income tax return if your child is cared for at home or in nursery school, daycare, day camps, boarding schools, and day sports schools? You can claim these expenses if you or your spouse or common-law partner incurred the expenses in order to work, carry on a business, or attend school. If you qualify and your child is under the age of 7, you could claim up to $7,000 a year. If your child is over 7 but under 16 years of age, you may be able to claim up to $4,000. There is no age limit if you have a disabled child, and you could be able to claim up to $10,000.
Working away from home?The Canada Revenue Agency (CRA) is reminding Canadians to properly indicate their province or territory of residence on their tax returns. This ensures that you are paying the taxes you owe, and allows the CRA to properly distribute the taxes it collects on behalf of provinces and territories. When you let us know where you were living on December 31, it helps to determine which province or territory will receive your tax dollars. The CRA collects taxes for individuals on behalf of all provinces and territories except Quebec. Services and social programs that you and your family use on a day-to-day basis are directly affected when you don't pay taxes to the proper province or territory.
The CRA also looks at other factors when further clarification is necessary, such as the province or territory where:
Did you make a mistake on your tax return?If you wish to correct incorrect information on your return, you can do so through the CRA's Voluntary Disclosures Program. If you make a full disclosure before any compliance action is started, you may only have to pay the taxes and credits owing plus interest, but not penalties. Canadians who plan to file their tax returns electronically, or who do not submit information slips and receipts with their paper-filed return, should keep their tax records on hand in case they are contacted by the Canada Revenue Agency (CRA). Once tax returns are filed, the CRA begins work to verify the income reported, as well as the credits and deductions claimed. Some initial reviews of deductions and credits are conducted when returns are filed, and before taxpayers receive their Notice of Assessment. However, the majority of reviews take place later in the year, as the CRA works to verify the information on an individual's tax return and compare it with the information provided by other parties, such as an employer or a spouse or common-law partner. During this review process, the CRA may contact taxpayers to request more information on income sources or dependants, and may ask for copies of receipts or information slips to support claims, including:
Keeping your tax records on hand makes it easier to respond to these requests, and will help you explain your tax situation to the CRA if you do not agree with your reassessment. Receiving a request for receipts or documentation does not mean you are being audited by the CRA. When an individual is selected for an audit, the CRA advises them that their tax situation is being reviewed and calls to arrange a meeting to begin the audit. Canadians who plan to file their tax returns electronically, or who do not submit information slips and receipts with their paper-filed return, should keep their tax records on hand in case they are contacted by the Canada Revenue Agency (CRA).
Remember, tips are taxable incomeThe Canada Revenue Agency (CRA) wants to remind Canadians who earn tips and gratuities of the rules for reporting this income on their annual income tax returns. Restaurant servers, hairdressers, valets, taxi drivers and others who earn tips may not have all of their income recorded by the employer and therefore not included on their T4 slips. The Income Tax Act is clear regarding the treatment of income from tips and gratuities: all tips are taxable and it is your responsibility to report any you receive. The CRA is committed to administering and enforcing the Income Tax Act in a fair and equitable manner, ensuring that the requirements under the law are met while respecting the rights of the individuals involved. When people earn tips and do not report them, they are increasing the tax burden on their friends, family, and neighbours who have all of their income reported by their employers on their T4 slips. In preparing to file your tax return, you may have to contact your employer to find out if any or all of your tips will be included on your T4 slip. Even if you do not get a T4 slip to show your income from tips, you are still required to report all tips received in the course of your work and report the amount on line 104 of your return. It is your responsibility to keep track of all amounts received in the course of your employment. During a review or audit, CRA officers use the available records to confirm taxable income. If such records are not available, officers use other supporting information or documents available at the time of the review. |
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