Cancellation of the Immigrant Trust Exemption

posted Sep 10, 2014, 11:53 AM by Margaret Lin CPA, CGA, CFP   [ updated Sep 11, 2014, 12:50 PM ]

The Immigrant Trust Exemption allows a Canadian resident individual to transfer property to a Non-Resident Trust without the Trust being deemed Canadian resident until such time as the individual has been a resident in Canada for 60 months in aggregate.

 

The sixty months exemption will be eliminated in respect of Trusts for taxation years:

 

  • that end after 2014 if (i) at any time that is after 2013 and before Budget Day (February 11, 2014) the 60-month exemption applies in respect of the trust, and (ii) no contributions are made to the trust on or after Budget Day and before 2015; or
  • that end on or after Budget Day in any other case.

GST/HST Exemption - Updates

posted May 8, 2014, 12:07 PM by Margaret Lin CPA, CGA, CFP

Effective February 12, 2014, acupuncturist and naturopathic doctor's professional services will be exempted from GST/HST.

Non-Eligible Dividend – New Rules

posted Nov 6, 2013, 11:31 PM by Margaret Lin CPA, CGA, CFP   [ updated Nov 7, 2013, 12:31 AM ]

Effective in 2014, for non-eligible dividends paid after 2013, the gross-up factor will be reduced from 25% to 18% and the corresponding federal dividend tax credit will be reduced from 13.33% of gross up amount to 11.02%.  If you are in BC and in the highest tax bracket, the combined federal tax rate and BC tax rate will be increased by 4.27%, from 33.71% to 37.98%.

 

The table below summarizes the increase rate for each tax bracket in the province of B.C. for non-eligible dividend paid after year 2013.

 

2014

Taxable  Income

Thresholds

  2014 Marginal Tax Rates

2013

Taxable  Income

Thresholds

  2013 Marginal Tax Rates

Increased by

first $37,606

7.61%

first $37,568

4.16%

3.45%

over $37,606 up to $43,953

10.73%

over $37,568 up to $43,561

7.46%

3.27%

over $43,953 up to $75,213

18.99%

over $43,561 up to $75,138

16.21%

2.78%

over $75,213 up to $86,354

22.29%

over $75,138 up to $86,268

19.71%

2.58%

over $86,354 up to $87,907

24.40%

over $86,268 up to $87,123

21.95%

2.45%

over $87,907 up to $104,859

29.12%

over $87,123 up to $104,754

26.95%

2.17%

over $104,859 up to $136,269

31.97%

over $104,754 up to $135,054

29.96%

2.01%

over $136,269 up to $150,000

35.51%

over $135,054

33.71%

1.80%

over $150,000

37.98%

over $150,000

33.71%

4.27%

GST/HST Quick Method new threshold from 2013

posted Mar 27, 2013, 9:14 PM by Margaret Lin CPA, CGA, CFP

For reporting beginning in 2013, the Quick Method of accounting threshold for annual worldwide taxable supplies has increased from $200,000 to $400,000.

Seniors' Home Renovation Tax Credit

posted Feb 23, 2013, 12:13 PM by Margaret Lin CPA, CGA, CFP   [ updated Nov 7, 2013, 12:05 AM ]

The B.C. seniors home renovation tax credit assists individuals 65 and over with the cost of certain permanent home renovations to improve accessibility or help a senior be more functional or mobile at home.

 

The program starts April 1, 2012 so your renovation expenses must happen on or after this date.

 

An eligible expense is deemed to have been paid on the earlier of the date on which the expense was paid or the date it become payable. Expenses made or incurred under an agreement entered into before April 1, 2012 do not qualify.

 

You’re eligible to claim the credit for the year if on the last day of the tax year you’re:

 

  • a resident of B.C., and
  • a senior or a family member living with a senior.

 

The renovation must be to your principal residence, which is the home you primarily live in (including a non-seasonal mobile home).

 

The credit can be shared between eligible residents of the home to a maximum amount of the credit. The maximum amount of the credit is $1,000 per tax year and is calculated as 10% of the qualifying renovation expense (maximum $10,000 in expenses). The credit is a refundable tax credit, which means if the credit is higher than the taxes you owe, you’ll receive the difference as a refund.

 

Please click link below for more details and what qualifies:

http://www2.gov.bc.ca/gov/topic.page?id=429E0E95383B459DAEAB4532C57BBE2D

Scientific Research and Experimental Development (SR&ED) Program – New Rates

posted Jan 9, 2013, 6:13 PM by Margaret Lin CPA, CGA, CFP

For taxation years that end after 2013, the general rate for SR&ED ITCs (investment tax credit) will decrease from 20% to 15%. The rate used to calculate the prescribed proxy amount will decrease from 65% to 60% for the 2013 calendar year, and to 55% for 2014 and later calendar years.

 

When part of the taxation year of a business is in 2013 and part is in 2014, the decrease will be prorated so that it only applies for the latter part of the taxation year.

 

For expenses incurred after 2013, the capital expenses will be removed from the base of eligible expenditures for the purpose of the calculation of SR&ED tax incentives.

Overseas Employment Tax Credit (OETC) – Phase Out

posted Jan 9, 2013, 5:58 PM by Margaret Lin CPA, CGA, CFP   [ updated Jan 9, 2013, 6:11 PM ]

An OETC can be claimed by an individual resident in Canada who works abroad for at least six consecutive months for a specified employer in connection with a resource, construction, installation, agricultural or engineering contract or for purposes of obtaining those contracts. In general terms, the credit equals the individual's tax payable on 80% of their qualifying foreign employment income (QFEI) or $80,000 (maximum QFEI), whichever is less.

 
Over the period from 2013 to 2016, the OETC will be phased out.  The OETC will be eliminated in 2016.
 
The percentage of QFEI and the maximum QFEI used in the calculation of the OETC will be reduced as follows:

                        
                         Year                 Percentage       Maximum QFEI

                          2013                 60%                  $60,000

2014                 40%                  $40,000

2015                 20%                  $20,000

2016                 0%                   $0

 
The phase-out will not apply to the QFEI earned by you in connection with a contract that your employer committed to in writing before March 29, 2012 (referred to as protected QFEI). The OETC will be eliminated in all cases for 2016 and subsequent years.

 

Eligible Dividend – New Rules

posted Jan 9, 2013, 5:54 PM by Margaret Lin CPA, CGA, CFP

The corporation is now allowed to designate, at the time it pays a taxable dividend, that a portion of the dividend is an eligible dividend.  Also a late designation of an eligible dividend is accepted if it is made within the three year period following the day on which the designation was first required to be made. Amended slips should be prepared accordingly.  The new rules only apply to the dividends paid after March 28, 2012.

Phasing out of the Penny

posted Dec 18, 2012, 11:32 PM by Margaret Lin CPA, CGA, CFP   [ updated Dec 18, 2012, 11:33 PM ]

As part of the Economic Action Plan 2012, the Government announced that it will phase out the penny from Canada’s coinage system. While the cent will remain Canada’s smallest unit for pricing goods and services, the Royal Canadian Mint will no longer distribute pennies as of February 4, 2013.

 

As pennies exit circulation, only cash payments will need to be rounded, either up or down, to the nearest five-cent increment. This will have no impact on cheque payments or electronic payments, such as credit and debit cards.

 

  • Amounts ending in 1 and 2 cents are rounded down to the nearest 10 cents;
  • Amounts ending in 3, 4, 6 and 7 cents are rounded up or down to the nearest 5 cents;
  • Amounts ending in 8 and 9 cents are rounded up to the nearest 10 cents;
  • Amounts ending in 0 cent and 5 cents remain unchanged.

For any cash payment, only the final amount (or equivalently, the change owed) should be subject to rounding. Individual items, as well as any duties, fees or taxes, should be tabulated in their exact amount prior to rounding.

Late-Filing Penalties – New Policy

posted Oct 31, 2012, 7:50 PM by Margaret Lin CPA, CGA, CFP   [ updated Nov 16, 2012, 8:41 PM ]

May, 2012 - CRA introduced a new administrative policy with respect to late-filing penalties, effective on or after January 1, 2012, for Forms such as the NR4, the T4, the T4A, the T4E, the T5, and the T5018 (Statement of Contract Payments).

 

The penalty is the greater of $100 (minimum $100) or a penalty determined as follows:

Number of information
returns (slips)

Penalty (per day)

Maximum penalty
(100 days)

1 - 5

N/A

$100 flat penalty

6 - 10

$5

$500

11 - 50

$10

$1,000

51 - 500

$15

$1,500

501 - 2,500

$25

$2,500

2,501 - 10,000

$50

$5,000

10,001 or more

$75

$7,500

 

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