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Thursday, December 3, 2015

Protect yourself against fraud

Protect yourself against fraud

Know how to recognize a scam

Examples of fraudulent communications

There are many fraud types, including new ones invented daily.
Taxpayers should be vigilant when they receive, either by telephone, mail, text message or email, a fraudulent communication that claims to be from the Canada Revenue Agency (CRA) requesting personal information such as a social insurance number, credit card number, bank account number, or passport number.
These scams may insist that this personal information is needed so that the taxpayer can receive a refund or a benefit payment. Cases of fraudulent communication could also involve threatening or coercive language to scare individuals into paying fictitious debt to the CRA. Other communications urge taxpayers to visit a fake CRA website where the taxpayer is then asked to verify their identity by entering personal information. These are scams and taxpayers should never respond to these fraudulent communications or click on any of the links provided.
To identify communications not from the CRA, be aware of these guidelines.
If you receive a call saying you owe money to the CRA, you can call us or check My Account to be sure.
If you have signed up for online mail (available through My Account, My Business Account, and Represent a Client),the CRA will do the following:
  • send a registration confirmation email to the address you provided for online mail service for an individual or a business; and
  • send an email to the address you provided to notify you when new online mail is available to view in the CRA's secure online services portal.
The CRA will not do the following:
  • send email with a link and ask you to divulge personal or financial information;


If you call the CRA to request a form or a link for specific information, a CRA agent will forward the information you are requesting to your email during the telephone call. This is the only circumstance in which the CRA will send an email containing links.
  • ask for personal information of any kind by email or text message.
  • request payments by prepaid credit cards.
  • give taxpayer information to another person, unless formal authorization is provided by the taxpayer.
  • leave personal information on an answering machine.
When in doubt, ask yourself the following:
  • Did I sign up to receive online mail through My Account, My Business Account, or Represent a Client?
  • Did I provide my email address on my income tax and benefit return to receive mail online?
  • Am I expecting more money from the CRA?
  • Does this sound too good to be true?
  • Is the requester asking for information I would not provide in my tax return?
  • Is the requester asking for information I know the CRA already has on file for me?
If you do have a debt with the CRA and can't pay in full, take action right away. For more information, go to When you owe money – collections at the CRA.

Friday, April 24, 2015

The Money Management Newsletter - Bulletin

The Money Management Newsletter - Bulletin

How to fix RRSP overcontributions
By Jessica Bruno, December 5, 2014
Why read this?
  • You have an RRSP
  • You’ve exceeded your contribution limit
What’s an overcontribution?

If you have undeducted RRSP contributions exceeding your deduction limit by more than $2,000, you’ve overcontributed.

What to do

STEP ONE: Decide whether or not to withdraw the money.

Canada Revenue Agency (CRA) may penalize overcontributions above the $2,000 cushion by 1% of the excess amount per month, but you aren’t obligated to withdraw the money, says Sandy Kirkwood-Pearce, owner and president of Sleegers Kirkwood-Pearce. “If the investment is doing really well, the consequences of the overpayment penalty […] might be overshadowed,” she says.

STEP TWO: If you decide to remove the money, ask CRA to waive withholding tax.

  1. Use Part 1 of Form T3012A Tax Deduction Waiver on the Refund of your Unused RRSP, PRPP, SPP, or RRIF Contributions made in ___ (year) to calculate the amount the RRSP administrator can refund without withholding tax.
  2. Under Part 2, designate which RRSP to withdraw the money from, and a destination account.
  3. Attach proof of the overcontributions, such as certified copies of receipts, and send four copies of the form to CRA.
  4. If CRA approves, it will return three signed copies of the form.
  5. Send the copies to your financial institution.
  6. Once the withdrawal is done, the institution will return two copies.
TIP: Filling out the T3012 may not be worth the time, or the accountant’s fees, if there’s little tax to be withheld, says Karen Slezak, a tax partner at Crowe Soberman LLP. “Withdraw the overcontribution and don’t worry that there will be some withholding tax,” she says. The tax withheld will count toward your annual tax return. Take the money out in batches under $5,000 to minimize withholding tax, Slezak adds.

STEP THREE: Ask CRA to waive the 1% monthly excess contribution tax.

- CRA may approve your request, if:

  1. your excess contributions arose due to a reasonable error; and
  2. you’re withdrawing, or have withdrawn, the excess contributions.
- To make a request fill out Form RC4288 Request for Taxpayer Relief – Cancel or Waive Penalties or Interest or write to CRA explaining:

i. why the error was made, and why it’s reasonable; and

ii. any steps you’ve taken to eliminate the excess contributions. Include copies of supporting documents, such as RRSP statements, that show you have withdrawn the excess funds, and any correspondence related to the error.

STEP FOUR: If CRA assesses the unused contribution room as a negative amount, you received gift money in your RRSP or you contributed money to your partner’s RRSP without claiming a tax deduction, you may have to submit Form T1-OVP Individual Tax Return for RRSP Excess Contributions.

  1. Determine whether you should submit the form with CRA’s T1-OVP quiz.
  2. If necessary, complete Form T1-OVP.
  3. Send CRA the form and outstanding tax.
WARNING: Payment is due 90 days after the end of the tax year. Starting on day 91, CRA charges compound daily interest on unpaid tax or penalties, a late filing penalty of 5% of the balance owing, and 1% of the balance for every month a return is late.

STEP 5: Complete your annual return.

  • If you paid withholding tax:
    • Fill out form T746 Calculating Your Deduction for Refund of Unused RRSP Contributions.
i. Enter the amount on Line 11 of the T746 on Line 232 of the return.

TIP: Complete a separate T476 for each year of overcontributions.

  • Write the amount in Box 20 of your T4RSP Statement of RRSP Income slip on Line 129 of the return.
  • Submit the T746 and T4RSP with your return.
  • If you didn’t pay withholding tax and have already filed the T1-OVP, complete your return as usual, says Kirkwood-Pearce.

Tuesday, March 3, 2015

Revenu Québec souhaite économiser 5 millions $ en papier

Revenu Québec souhaite économiser 5 millions $ en papier


Revenu Québec souhaite économiser 5 millions $ en papier

Première publication 19 janvier 2015 à 12h06
Revenu Québec souhaite économiser 5 millions $ en papier
Crédit photo : capture d'écran, Revenu Québec
Agence QMI
Le code d'accès ImpôtNet Québec, qui permet de transmettre électroniquement une déclaration de revenus, sera remplacé pour la déclaration de 2015. La prochaine période des déclarations de revenus sera donc la dernière à connaître des envois massifs de codes sur papier.
À compter de janvier 2016, un nouvel authentifiant simplifié sera intégré directement aux logiciels autorisés. De cette manière, Revenu Québec n'aura plus à expédier les codes d'accès, le code de téléchargement et le bordereau de paiement personnalisé.
Cette nouvelle procédure permettra à Revenu Québec de réaliser des économies de papier considérables. Le nombre d'envois postaux et l'utilisation de papier s'en trouveront diminués de sorte que l'organisme estime éviter des dépenses de près de 5 millions $ par année.
Cette décision concerne les particuliers qui envoient eux-mêmes leurs déclarations par Internet et les préparateurs accrédités, qui préparent les déclarations de revenus pour le compte d'une autre personne, pour autant qu'ils utilisent un logiciel autorisé par Revenu Québec.

Un virage graduel

Pour la déclaration 2014, seuls les contribuables qui ont déjà adopté la transmission électronique recevront leur code d'accès. Ceux qui ont fait appel à un préparateur accrédité ou qui ont produit leurs déclarations sans l'aide d'un logiciel ne recevront pas ces envois postaux.
Les particuliers qui souhaiteront adopter la transmission électronique pourront toujours le faire. Pour obtenir leur code d'accès, il leur sera possible d'obtenir leur code en ligne, grâce au service Info-code de Revenu Québec ou dans l'espace «Mon dossier» ou encore par téléphone. Il sera aussi possible d'imprimer un bordereau de paiement personnalisé.

Monday, February 23, 2015

What happens to RRSPs in bankruptcy? |

What happens to RRSPs in bankruptcy? |

Your client just told you they declared bankruptcy. What will happen to their registered investment accounts?
The protection provided under Canadian law for registered investment products varies by type of account and insolvency proceeding. Here, we’ll focus primarily on Ontario.
RRSPs and personal bankruptcy
All provinces protect pensions well. For example, the Insurance Act of Ontario states that if thehas a life insurance component, it is exempt from seizure if the beneficiary is your client’s grandparent, parent, spouse, child or grandchild. This includes plans made up of segregated funds.
Prior to 2009, if the beneficiary was the debtor’s estate, these funds would have been at risk. But that year, the federal government changed insolvency laws to provide further protection for RRSPs. Funds that have been on deposit for longer than 12 months are now protected. However, funds that aren’t otherwise protected by the Insurance Act can be seized if they were deposited in the 12 months immediately before your client declared bankruptcy.
If your client has made contributions to an RRSP in the previous 12 months that are now at risk of seizure, he must either:
  1. request that his bankruptcy trustee arrange for these contributions to be withdrawn. The trustee will be responsible for paying any taxes owing as a result of that withdrawal prior to distribution to creditors; or
  2. pay the trustee the equivalent of the expected realizations (net of taxes) and leave their RRSP intact. Your client could pay this amount in installments over the term of their bankruptcy.
Unlike RRSPs, other registered accounts (such as RDSPs, RESPs and TFSAs) are not protected from seizure under Canada’s Bankruptcy and Insolvency Act. Any protection they may be entitled to are set out in each of the province’s Executions Acts. In most cases, a trustee is able to claim these assets for creditors (including Ontario). However, Alberta has recently made RESPs creditor-protected.
Recently, the federal government began its five-year review of the Bankruptcy and Insolvency Act. As part of that review, my firm submitted a request to Industry Canada for RESPs, RDSPs and other forms of registered investment products to be given the same level of protection as RRSPs. We’re hopeful they’ll correct this inequality.
Consumer proposals are different
A consumer proposal allows your client to negotiate a debt settlement agreement with their creditors, the main benefit being your client can keep their assets.
If your client files a consumer proposal, all assets remain in their possession, including TFSAs, RDSPs, RESPs and RRSP contributions from the previous 12 months.
What if your client has not yet declared bankruptcy, but is in financial trouble?
There are two kinds of debt: secured and unsecured. Secured debts have some form of collateral pledged as surety for the debt. If your client defaults, the lender has the right to sell the collateral. Fortunately, RRSPs can’t be used as collateral.
Any debt that’s not supported by collateral is unsecured. In a default, unsecured creditors have the right of set-off and recourse through the courts. The right of set-off allows a lender to take funds from one account to pay down a debt in another account. But it doesn’t apply to registered investment products. So if your client owes the bank for a loan, the bank cannot seize your client’s RRSP for repayment.
Recourse through the courts means the lender has the right to sue your client in order to recover the debt. If the lender’s lawsuit is successful, the court will issue a judgment, usually followed by a Writ of Execution or a Writ of Seizure. These writs allow a creditor to seize bank accounts, garnishee wages, and register a claim with the sheriff or bailiff. The writs don’t allow the creditor to seize RRSPs, but they may allow the seizure of other registered accounts such as RESPs and RDSPs.
Should your client find them self in financial distress due to unsecured debts, your client shouldn’t assume their best solution is to liquidate RRSPs and other investments that may be protected under the law. At the same time, your client may want to take action to protect any assets that their creditors can seize. Depending on your client’s situation, debt restructuring through a consumer proposal or perhaps an assignment in bankruptcy (i.e., using a trustee) may make more sense.
Ted Michalos is founder and trustee of Hoyes, Michalos & Associates.

Tuesday, February 10, 2015

Automobile allowance rates

Automobile allowance rates

Automobile allowance rates

The automobile allowance rates for 2015 are:
  • 55¢ per kilometre for the first 5,000 kilometres driven; and
  • 49¢ per kilometre driven after that.
In the Northwest Territories, Yukon, and Nunavut, there is an additional 4¢ per kilometre allowed for travel.
The automobile allowance rates for 2013 and 2014 are:
  • 54¢ per kilometre for the first 5,000 kilometres driven; and
  • 48¢ per kilometre driven after that.
In the Northwest Territories, Yukon, and Nunavut, there is an additional 4¢ per kilometre allowed for travel.
The automobile allowance rates for 2012 are:
  • 53¢ per kilometre for the first 5,000 kilometres driven; and
  • 47¢ per kilometre driven after that.
In the Northwest Territories, Yukon, and Nunavut, there is an additional 4¢ per kilometre allowed for travel.
The automobile allowance rates for 2010 and 2011 are:
  • 52¢ per kilometre for the first 5,000 kilometres driven; and
  • 46¢ per kilometre driven after that.
In the Northwest Territories, Yukon, and Nunavut, there is an additional 4¢ per kilometre allowed for travel.

Wednesday, January 21, 2015

Interest rate surprise: Bank of Canada drops key lending rate to 0.75 per cent | CTV News

Interest rate surprise: Bank of Canada drops key lending rate to 0.75 per cent | CTV News

OTTAWA -- The looming threat of sliding oil prices forced the Bank of Canada to drop its trend-setting interest rate Wednesday, a surprising move that shows just how much the country's economic outlook has soured in a matter of months.
The central bank, which nudged its key rate down to 0.75 per cent from one per cent, said the rapid oil-price collapse has created many unknowns around economic growth in the oil-exporting nation.
Until the effects of oil's late-2014 tailspin started to trickle through, Canada appeared to be on the cusp of a promising post-recession rebound -- and inching closer to a rate hike.
"The large decline in oil prices will weigh significantly on the Canadian economy," the Bank of Canada said in its quarterly monetary policy report, which it also released Wednesday.
"Given the speed and magnitude of the oil-price decline, there is substantial uncertainty around the likely level for oil prices and their impact on the economic outlook for Canada."
The loonie dropped after the announcement by 1.12 cents US to 81.48 cents US -- its lowest level since late April 2009, the last time the bank cut its overnight rate.
The decision Wednesday marked the first time the rate budged at all since September 2010 when the central bank raised it by a quarter point to one per cent.
The Bank of Canada was widely expected to once again stand pat on its rate Wednesday, with most economists projecting an increase in late 2015 or early 2016.
The central bank, however, predicts the impact of falling oil prices to overshadow encouraging signs of economic life spotted outside the weakening energy sector, such as rising foreign demand, a boost in exports and job growth.
"The oil-price shock is occurring against a backdrop of solid and more broadly based growth in Canada in recent quarters," the bank said.
"While business investment had been showing some encouraging signs in the third quarter of 2014, the near-term outlook appears much-less positive."
The bank also said the oil-price drop will have an adverse effect on income and wealth, which would reduce the growth of domestic demand. It also expected additional negatives on consumption and public finances.
The rate decrease aims to soften the blow of cheaper crude.
The Bank of Canada said lowering the rate was intended to "provide insurance" against risks posed by low oil to the country's inflation and its financial stability.
It predicted Canada's fortunes to also receive a boost from the ever-strengthening U.S. economy, an country expected to benefit from lower crude prices.
The bank's concerns over the oil slump come as some Canadian industries reel from the sharp plunge in crude prices, which are down more than 55 per cent since June.
The decline in oil prices is also expected to shave billions of dollars from the bottom lines of federal and provincial governments.
Last week, the federal government took the rare step of delaying the budget until at least April, so it could assess the effect of tumbling crude.
In November, federal Finance Minister Joe Oliver warned falling oil prices could cut $2.5 billion per year from the federal books between 2015 and 2019. Since that calculation, the price of crude has tumbled even further, from about US$80 per barrel to under US$50.
Experts believe the federal books for 2015-16 will come close to running another deficit, despite the Harper government's assertions it will deliver on its long-held vow to balance the budget.
An analysis Tuesday by the Conference Board of Canada predicted plummeting world oil prices to gnaw $4.3 billion from the Canadian government's 2015 income and deliver a nearly $10-billion hit to the provinces in royalties and tax revenue.
In the monetary policy report Wednesday, the central bank predicted the country's headline inflation rate to temporarily dip to one per cent -- below the bank's target range -- before climbing back up to two per cent in the second half of the year.
The central bank also highlighted persistent problems in Canada's labour market, where it found long-term unemployment was still close to its "post-crisis peak."
It said average hours worked remained low and the proportion of people who could only find part-time work was still high.
The bank predicted the pace of Canada's economic growth -- measured by the real gross domestic product -- to slow to roughly 1.5 per cent in the first half of 2015 and for the output gap to widen.
It projected the Canadian economy to gather steam in the second half of the year, allowing real GDP growth to average 2.1 per cent in 2015 and 2.4 per cent in 2016.
The bank's estimates were based on oil prices of US$60 per barrel, which is higher than current prices that are below US$50.
The report said if oil were to remain close to US$50, real GDP growth would dip to 1.25 per cent in the first half of 2015.
In its last monetary policy report -- in October -- the Bank of Canada predicted 2.4 per cent growth for 2015.
Since then, oil prices have dropped by more than 40 per cent.
In his October report, bank governor Stephen Poloz warned the extended period of an already-low interest rate of one per cent had propelled consumer spending to near-record-high housing prices and debt.
At the time, Poloz cautioned the low-rate environment had left Canadian households exposed to economic shocks.
On Wednesday, the bank reiterated the warning that Canada's indebted households remained vulnerable.
A fresh unknown -- the oil collapse -- has now been added to the mix.
"The precise magnitude of the impact of the fall in oil prices on household income, spending and, ultimately, on existing imbalances is highly uncertain," said the report, which still maintained its prediction of a soft landing for the housing market.
The Bank of Canada is scheduled to make its next interest-rate announcement March 4, while its next monetary policy report is due April 15.
The loonie's ups and downs over a 10-year period

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Sunday, January 4, 2015

What’s new for this tax-filing season?

What’s new for this tax-filing season?

Did you know?

You may be eligible for new or improved tax relief measures and online services when filing your 2014 income tax and benefit return.

Important facts

  • Children's fitness amount - Under proposed changes, the maximum amount of eligible fees for each child has increased to $1,000.
  • Search and rescue volunteer amount - As a search and rescue volunteer, you may be able to claim an amount of $3,000.
  • Family Tax Cut - A proposed non-refundable tax credit of up to $2,000 is available to eligible couples with children under the age of 18, and is effective starting with the 2014 tax year.
  • Universal Child Care Benefit (UCCB) - Under proposed changes, this benefit is being increased for children under age six. Effective January 1, 2015, parents will be eligible for a benefit of $160 per month for each eligible child under the age of six - up from $100 per month. Under proposed changes to expand the UCCB, parents may also receive a benefit of $60 per month for eligible children ages six through 17. Payments of the additional amount and expanded amount will start in July of 2015.
  • Emergency services volunteers - Rules for the $1,000 exemption for emergency services have changed.
  • Adoption expenses - The maximum amount of eligible expenses for each child has been increased to $15,000.
  • Medical expenses - Amounts paid as salary for designing of personalized therapy plans for persons eligible to claim the disability tax credit and costs for service animals used to help manage severe diabetes, are now eligible as medical expenses.
  • Investment tax credit - Eligibility for the mineral exploration tax credit has been extended to flow-through share agreements entered into before April 2015.
  • GST/HST credit - You no longer have to apply for the goods and services tax/harmonized sales tax (GST/HST) credit. When you file your return, the Canada Revenue Agency (CRA) will determine your eligibility and will advise those who are eligible to receive the credit. If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first. The amount will be the same, regardless of who (in the couple) receives it.
  • Online mail - When you register for online mail, you'll have instant access to your tax records anytime, anywhere. Choose to receive an email notification that your notice of assessment or reassessment is available online. Provide us with an email address on your T1 return or register directly online starting February 2015
  • Mobile application: In February 2015, the CRA will be launching a mobile app for individual taxpayers.

CRA online services make filing easier and getting your refund faster

The CRA's online services are fast, easy, and secure. You can use them to file your income tax and benefit return, make a payment, track your refund, receive your notice of assessment, and more. Did you know that the Government of Canada is switching to direct deposit for all payments that it issues? This includes your tax refund and benefit payments. Sign up for direct deposit today! For more information, go to