As a result of the HST being introduced in BC and
Ontario, there are many new forms and publications related to GST and
HST. On our GST/HST page under the GST/HST Topics for Businesses, we
have added a link to all GST/HST forms and publications.
The 2010 Tax Comparison by Province has been updated to
include the tax changes in Nova Scotia and Newfoundland and
Labrador. There are now 2 tables, one comparing taxes paid by a
single person, and one comparing taxes paid by a married person with 2
children, with the spouse having no income.
Draft legislative proposals were released for
consultation on August 27, 2010. These proposals are to implement
tax measures from Budget 2010 as well as several previously announced tax
initiatives.
A loan by an employer or a third party to an employee, or
the subsidization of an employee loan, may result in a deemed
taxable benefit being included in the income of the employee. However,
when a home relocation loan to an employee results in a taxable benefit
being included in the employee's income, a home relocation loan benefit
deduction is available to the employee, which would partially offset the
taxable benefit.
The QC My Account Online can now be used to claim the
QST credit, obtain information on claiming the QST credit or the credit
for individuals living in northern villages, or to claim the tax credit
for home improvement and renovation, or adjust a claim.
We have added a table showing most of the Québec tax
credits and deductions that are adjusted for inflation each year.
Amounts for 2010 and 2009 are included.
A gift or award given to an employee is usually a
taxable benefit to the employee. Canada Revenue Agency now has an
online series of questions which can be answered by an employer to
determine if there is a taxable benefit for any item provided to an
employee.
Several provinces have tax credits which are paid in
combination with the GST/HST credits. Some of these are paid
quarterly, and some are paid annually. The new BC HST credit is one
of these, and will be paid for the first time this month.
The Nova Scotia and Newfoundland and Labrador tax rates have been
updated in the Borrow to Invest Calculator, TFSA vs RRSP Calculator, and
RRSP vs Mortgage Calculator. Saskatchewan enhanced dividend tax
credit rates were updated in the Borrow to Invest Calculator.
A June 25th news release announced that Canada Revenue
Agency acknowledges that there has been genuine confusion about the TFSA
rules, and will be as flexible as possible when a genuine misunderstanding
of the rules has occurred. The June 30th deadline for responding to
a TFSA return letter has been extended to August 3, 2010.
The enhanced dividend tax credit for NL for dividends
received from January to June 2010 is automatically reduced from the 2009
rate due to the reduction of the gross-up percentage. Eligible
dividends received from July to December will be subject to the higher
dividend tax credit rate proposed in the NL 2010 Budget.
It appears that many people did not understand that a
TFSA withdrawal does not increase contribution room until the following
year. This article deals with what must be done if you have an
excess contribution.
Businesses which are registered to collect GST/HST can
recover the GST/HST that they have paid, with certain temporary exceptions
for large businesses. We have added information on these temporary
restrictions, with links to detailed information on the Ontario Ministry
of Finance website.
Businesses which are registered to collect GST/HST can
recover the GST/HST that they have paid, with certain temporary exceptions
for large businesses. We have added information on these temporary
restrictions, with links to detailed information on the BC Ministry of
Finance website.
See our new article on Place of Supply Rules for goods,
services, and intangible personal property (IPP), some of which have
changed effective May 1, 2010. Information is also included
regarding HST self-assessment and rebates of the provincial component of
the HST.
Cottage owners may apply to defer all or a portion of
the increase in property taxes resulting from the 2010 general
reassessment of property values in Manitoba.
The first payments of the Ontario Sales Tax Transition
Benefit will be made to Ontario residents this month. A new link has
been added to the OSTTB information, to a Canada Revenue Agency Questions
and Answers web page.
Most rebates of the provincial component of the HST
regarding residential energy will be provided to consumers on the supplier
invoice. For purchases of residential energy products such as wood
stove pellets and firewood, consumers can apply to the government for a
residential energy rebate regarding the provincial component of the HST.
The BC Ministry of Finance web page Jobs and the
Economy - Facts about the HST, includes information for businesses and
individuals, and includes a document which shows in detail which items
will be subject to a higher tax
under the HST, and which ones will not.
This Ontario Ministry of Finance web page has tables
which show in detail which items will be subject to a higher tax
under the HST, and which ones will not.
The Consumption Tax Rebate and Transition Act,
eliminating the Provincial Sales Tax (PST) and preparing BC for the HST, was passed in the BC
Legislature on April 29th.
The Department of Finance has released the draft
legislation and explanatory notes regarding proposed Tax-Free Savings
Account technical changes that were announced in October 2009.
The Nova Scotia 2010 budget was tabled on April 6th,
announcing a new high-income personal income tax bracket for 2010, offset
by an elimination of the high-income surtax. The HST rate is being
increased to 15% effective July 1, 2010. Two new refundable tax
credits were introduced for low-income individuals/couples.
The Québec 2010 budget was tabled on March 30th, with
the introduction of a health contribution as of July 1, 2010, further
increase of the QST in 2012, and a new solidarity tax credit to replace 3
other tax credits.
Newfoundland & Labrador's 2010 budget was tabled on
March 29th, with reductions in the top 2 personal tax rates, increases to
the age amount tax credit and Low Income Senior's Benefit, increase to the
enhanced dividend tax credit, and reduction of the small business
corporate income tax rate.
Manitoba's 2010 budget was tabled on March 23rd,
announcing a new Tuition Fee Income Tax Rebate Advance, expansion of the
Fitness Tax Credit, and a new refundable Fertility Treatment Tax Credit.
A GST registrant in BC or Ontario should not be
invoicing or collecting the provincial portion of the HST prior to
May 1, 2010, for goods or services provided in BC or Ontario, even
if the goods or services are to be provided on or after July 1,
2010. Some non-consumers may have to self-assess the
provincial portion of the HST.
We have added links to several information sheets
published by CRA regarding the transition to HST, and point-of-sale
rebates for various categories such as books, newspapers, prepared food
and beverages, feminine hygiene products and children's goods.
We have added links to several information sheets
published by CRA regarding the transition to HST, and point-of-sale
rebates for various categories such as books, motor fuels, feminine
hygiene products and children's goods.
The caregiver tax credit may be available to you if a
parent or grandparent over 65 lives with you, even if they are not your
dependent. This credit may also be available if certain other
dependent relatives live with you. When you are able to claim the
caregiver credit (or could have, if the relative had no income) for a
relative who is eligible for the disability amount tax credit, you may
also be able to transfer to yourself any unused portion of their
disability tax credit.
In order to avoid doing an adjustment to your 2009 tax
return later, RRSP contributions made in the first 60 days of 2010 should
be reported on Schedule 7 of your 2009 tax return, even if you are not
claiming the deduction for 2009.
Budget 2010 includes expansion of CCA Class 43.1 and
Class 43.2, which provide accelerated capital cost allowance at the rate
of 30% or 50% per year. The Budget also includes proposals to
enhance and clarify the special GST/HST accounting method available for
the direct selling industry. The Government is creating the Vehicle
and Equipment Financing Partnership to increase the availability of credit
at market rates for dealers and users of vehicles and equipment.
There were no new changes announced to the amount of
personal tax credits or tax brackets, or to tax rates. Changes are
being made to the way Universal Child Care Benefits (UCCB) are included in
income by single parents. Some beneficial changes are proposed
related to Registered Disability Savings Plans (RDSPs). The tax
deferral election for stock options is repealed, and provisions are
proposed to assist taxpayers who previously used this election.
The 2010 Budget includes the change to HST. There
will be a refundable BC HST credit of $230 per person for low and modest
income individuals and families. MSP premiums will be increased for
2011. A property tax deferment program is being introduced for 2010
for families with children. The PST on private sales of vehicles,
which are not subject to HST, will increase to 12% effective July 1,
2010. See details on these and other changes in the BC Budget
documents.
Most of the time, the amount that can be deducted for food,
beverages and entertainment is 50% of the lesser of the actual cost, or a reasonable amount under the circumstances.
This article has been revised to add information on what constitutes a
reasonable amount.
We have finally completed the much more sophisticated
Québec Tax Calculator, similar to the Canadian Tax Calculator. It
now calculates the tax for taxpayer and spouse, with choice of the year
2009 or 2010. It includes the most common Québec tax credits.
The TFSA vs RRSP Calculator, which helps a person
decide if it is better to contribute to a TFSA or to an RRSP, has been
updated to include 2010 income tax rates.
There is no need for tax return preparation with
Telefile for Seniors. Using this service, eligible seniors can make
a phone call and answer some yes/no questions in order to file their tax
return for 2009.
From a tax perspective, certain types of investments are better to be
held in a non-registered account than in an RRSP/RRIF or TFSA. This
depends mostly on the tax treatment of the income from the
investments. We have summarized our opinions on where to place
different types of investments.
The information on this site is not intended to be a
substitute for professional advice. Each person's situation differs, and
a professional advisor can assist you in using the information on this web
site to your best advantage.
See our Business
Directory for tax, accounting and finance-related firms in your
area.
Please see our legal
disclaimer.
