DAVIES ACCOUNTING & FINANCIAL SERVICES
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            VALUABLE TIPS

            The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.

            Helping Families save money


            Davies Accounting & Financial Services

            We are located in Dartmouth, Nova Scotia, and have been providing professional services since 1991.

            This site is a helpful resource tool to clients and visitors. Our dedication to client services has brought us to the Internet, as Davies Accounting & Financial Services endeavor to continue to provide the highest quality service and guidance.

            As you browse through the Website, you will see that Davies Accounting & Financial Services have highlighted information that includes useful resources such as links to Canada Revenue Agency (CRA). In addition, Davies Accounting & Financial Services have taken the time to gather many links to external sites that may be of interest to all clients and visitors.

            While browsing through our Website, please feel free to E-mail us with any questions or comments you may have - we'd love to hear from you. Davies Accounting & Financial Services prides itself on being proactive and responsive to our clients' inquiries and suggestions.

            Davies Accounting & Financial Services provide personal attention to our clients. Davies Accounting & Financial Services takes pride in giving you the assurance that the assistance you receive comes from years of training, and experience. Professional continuing education and computer technology allows us to commit to excellence.

            We specialize in the provision of outsourced bookkeeping to a wide range of business types. Davies Accounting & Financial Services is committed to providing what you want and meeting agreed deadlines.

            Davies Accounting & Financial Services will help your business profit from having the books always kept up to date. Outsourcing bookkeeping frees up your valuable time to concentrate on growing your business.

            Important Dates

             External link opens in new tab or windowTax Free Savings Account (TFSA) Withdrawals

            Dec 31st is the last day to withdraw from a TFSA and have it create additional contribution room in 2019. Withdrawals in 2018 will not create additional contribution room until 2019.

            2018 Tax Returns / 2019 Tax Planning

            It's never too early to start gathering the information needed for your 2018 tax return. You can use our External link opens in new tab or windowCalculators to get a head start on this, and to start tax planning for 2019. Use our investment return calculator to see how well your investments have done in 2018.

            Personal Income Tax

            External link opens in new tab or windowTD1 Forms for Employees and Pensioners

            The TD1 forms for 2018 are now available from Canada Revenue Agency. If there have been changes which will affect your tax exemptions you should ensure that you complete these forms so that your employer (or other payer) will deduct the appropriate amount of income tax from your employment income or pension income. New employees should always complete these forms. For those working only part time, if your total income for the year will not exceed your exemptions, you should tick the appropriate box on the back of the form, so that your employer will not deduct any income tax from your pay cheques.

            Charitable donation tax credit

            It is usually best for the highest income spouse to claim the tax credit for all donations of both spouses. However, sometimes not all donations are utilized, and can then either be carried forward or split between spouses. Our tax calculators will help with this.

            Employees/Employers

            External link opens in new tab or windowAutomobile Taxable Benefit Rates Increase for 2018

            There are many allowances and benefits which constitute taxable benefits, and must be included in the taxable income of an officer, employee or shareholder, and reported on a T4 tax information slip.  When some benefits are paid to employees, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums must be withheld from the amount paid.  In some cases, GST/HST must be included in the value of a benefit on the T4. Canada Revenue Agency (CRA) has a Benefits Chart, which is a table which indicates whether the taxable allowances and benefits are subject to CPP and EI withholdings, and whether certain benefits and reimbursements are subject to GST/HST.  The Benefits Chart is included in T4130 Employers' Guide Taxable Benefits and Allowances (see link at bottom of this article).  Once you have the file open, search for "Benefits Chart".

            External link opens in new tab or windowEmployers' Guide – Taxable Benefits and Allowances

            A benefit is a good or service you give, or arrange for a third party to give, to your employee such as free use of property that you own. A benefit includes an allowance or a reimbursement of an employee’s personal expense.

            An allowance or an advance is any periodic or lump sum amount that you pay to your employee on top of salary or wages, to help the employee pay for certain anticipated expenses without having him or her support the expenses.

             

            External link opens in new tab or windowBusiness Income Tax Reporting

            It will explain how to account for your business earnings and the kinds of income you have to report. It tells you what expenses you can deduct. It also tells you how the three most common types of business structures pay tax.

            External link opens in new tab or windowMotor vehicle expenses

            When can you deduct motor vehicle expenses What type of vehicle do you own or lease? Joint ownership. When a motor vehicle is also for personal use Deductible expenses Interest expense Leasing costs Repayments and imputed interest Calculating eligible leasing costs for passenger

            External link opens in new tab or windowNet corporate income tax rates

            The table of 2018 corporate income tax rates for Canada, provinces and territories is now available.


            Sales Taxes

            External link opens in new tab or windowSales taxes

            The goods and services tax (GST) is a 5% federal tax you pay on most goods and services you purchase in Canada. In some provinces, the GST has been combined with provincial sales tax to create the harmonized sales tax (HST). HST rates vary by province.

            External link opens in new tab or windowQuebec sales tax rebate

            Some of the expenses you paid to earn your employment income may have included the Quebec sales tax (QST). If you deducted these expenses from your employment income, you may be able to receive a rebate of the QST you paid. This rebate also applies to the QST you paid on a musical instrument that you use to earn employment income. Claim the QST rebate on line 459 of your Quebec provincial tax return.

            External link opens in new tab or windowBC PST Registration

            Effective April 1, 2013, the 12% HST, consisting of a 5% federal part and a 7% provincial part, will no longer apply in British Columbia (B.C.). Instead, the GST at 5% and a provincial sales tax will apply.


            Acknowledgement: External link opens in new tab or windowwww.TaxTips.ca

            • For more information contact: accounting@ns.sympatico.ca


            RESOURCES

            My Account - Managing Your Taxes On-line

            In recent years, the Canada Revenue Agency has taken a number of initiatives to make it easier for taxpayers to deal with them in an electronic environment. One of those initiatives is the "External link opens in new tab or windowMy Account" feature on the CRA website at External link opens in new tab or windowwww.cra.gc.ca, which the CRA has recently enhanced.

            The My Account feature allows taxpayers to access their personal tax information on file with the CRA, including information about any tax refunds or balances owing, the status of instalments and returns, as well as information on any Child Tax Benefit payments and Goods and Services Tax credit amounts. To access the My Account feature, taxpayers must first obtain a Government of Canada e-pass. To obtain that e-pass, a taxpayer must, on the website, provide the CRA with his or her social insurance number, date of birth and current postal code. As well, the amount reported on line 150 (total income) of the taxpayer's 2003 or 2004 return must be provided. Once that information is entered, the taxpayer must create an e-pass user ID and password, and select and answer three questions. In about five business days, the taxpayer will receive a CRA activation code by mail. After the activation code is entered on the website, the My Account feature is activated, and the taxpayer can log into My Account using his or her user ID and password.

            You may also use these External link opens in new tab or windowcalculators for information purposes only. For financial planning consult a professional Financial Advisor.

            Using the "My Account" feature, taxpayers can now find information about any of the following:

            • any tax refund or balance owing;
            • information about their RRSP, Home Buyers' Plan, and Lifelong Learning Plan;
            • the status of their income tax and benefit returns for the current and previous years;
            • any account balance and payments made on filing;
            • tax instalments made and tax instalments required;
            • Canada Child Tax Benefit and related provincial and territorial programs payments, account balance, and statement of account;
            • GST/HST credit and related provincial programs payments, account balance, and statement of account, and
            • addresses and telephone numbers.

            As well, using My Account, taxpayers can:

            • change their tax returns;
            • you can also sign up to have all documentation from CRA sent to you by e-mail
            • change their addresses or telephone numbers; and
            • disagree with their assessment or determination.

            The CRA continues to add new functionalities to the My Account feature, and announcements of such enhancements can usually be found on their website at External link opens in new tab or windowwww.cra.gc.ca.

            The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.

            Saving for Retirement

            Two changes announced in this year's federal Budget will make it easier for taxpayers to accumulate retirement savings, while also increasing the breadth of investment opportunities available for those savings.

            Current rules limit the amount of contributions to a taxpayer's RRSP to 18% of the previous year's earned income, to a maximum contribution of $16,500 in 2005 and $18,000 in 2006. Beginning in 2007, any increases in the annual limit were to be tied to increases in the average industrial wage. Instead, the federal government has proposed a four year series of fixed dollar amount increases, as outlined below.

            ·         2019 $26,500

            ·         2018 $26,230

            ·         2017 $2,010

            ·         2016 $25,370

            ·         2015 $24,930

            The government has also indicated that the stringent foreign property rule for RRSP’s and other tax deferred retirement savings plans will be eliminated. That rule, first introduced in 1971, initially limited the amount of foreign property such plans could hold to 10% of the plan's assets. That limit was later raised to 20% and then to 30%, effective in 2001. Plan assets in excess of those statutory limits were subject to a one percent per month penalty tax.

            According to the Budget documents, the foreign property rule was introduced to ensure that a substantial proportion of tax-deferred retirement savings flowed to Canadian companies and to support the development of Canada's capital markets. Owing to the integration of those markets with global capital markets, and improvements in the access which Canadian companies have to capital, the rule was determined to no longer be necessary. Consequently, it has been repealed effective for the 2005 and subsequent taxation years.

            Tax Free Savings Account (TFSA)

            A Tax-Free Savings Account is a new way for residents of Canada over the age of 18 to set money aside, tax free, throughout their lifetime.

            Contributions to a TFSA and the interest on money borrowed to invest in a TFSA are not tax deductible. The income generated in the TFSA is tax-free when withdrawn.

            On October 16, 2009, the  Minister of Finance, proposed amendments to the Income Tax Act to strengthen the rules applicable to Tax-Free Savings Accounts (TFSAs).External link opens in new tab or windowDetails of the proposed technical changes are available on the Department of Finance Web site.


            Who is eligible for TFSA?

            Any individual (other than a trust) who is at least 18 years old, who is a resident of Canada and has a valid Social Insurance Number (SIN) can be a External link opens in new tab or windowholder of a TFSA. You cannot contribute to a TFSA until you turn 18. However, when you turn 18, you will be able to contribute up to $5,000 because this amount will not be prorated.

            External link opens in new tab or windowContributing to a TFSA Explains the criteria for contributing to a TFSA, the TFSA dollar limit, the TFSA contribution room, the impact of a TFSA on your income-tested benefits, excess contributions and self-directed TFSA’s.

            External link opens in new tab or windowHow to set-up a TFSA What is needed to establish a TFSA.

            External link opens in new tab or windowMaking withdrawals.  What happens when you make withdrawals from your TFSA.

            External link opens in new tab or windowTFSA Qualified investments. Investment vehicles allowed in a TFSA

            External link opens in new tab or windowTermination of a TFSA
            Situations when a TFSA ceases to exist.

            External link opens in new tab or windowTaxation of a TFSA Describes different situations when a TFSA is taxable, when to file the return and how to pay the taxes owed and when we may issue a refund of the taxes paid.

            External link opens in new tab or windowQuestions and answers Frequently asked questions and answers.

             

            Contact Information:

            accounting@ns.sympatico.ca

            Davies Accounting & Financial Services

            Dartmouth, NS B2Y 4P7

            PHONE: 902.434.8606

            FAX: 902.484.3720

             

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            902-434-8606



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            accounting@ns.sympatico.ca



              Copyright 2016 DAVIES ACCOUNTING & FINANCIAL SERVICES


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