Donna Mazerolle & Associates Newsletter


Issue 10 – April 2012

Email Subject: Canada Revenue Agency updates

The Canada Revenue Agency frequently updates programs, changes eligibility rules on others and on occasion has a decision reversed by the Tax Court.

These monthly emails provide a brief overview of some the topics that I believe you need to be aware to better comply with the changes or new regulations.

I know it’s not the most exciting reading, but this is important stuff, and depending on your situation can have an impact on your finances and tax planning

For more details on these and other taxable benefits and business expenses that could impact your business, call me at 506-657-4067 or 1-800-650-4067.

Past Tax Tips newsletter editions can be reviewed on the website at: http://donnamazerolle.com/newsletter/

Donna Mazerolle
www.DonnaMazerolle.com

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HIRING CREDIT FOR SMALL BUSINESS (HCSB)

The 2011 Federal Budget created a one-time hiring credit for small business. The HCSB gives small businesses relief from the employer’s share of Employment Insurance (EI) premiums paid in 2011 by paying up to $1,000, based on the increase in an employer’s EI premiums paid in 2011 over those paid in 2010.

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Eligibility

You are eligible for this credit if you meet all of the following conditions:

  • you deducted EI premiums from the remuneration you paid to your employees, or paid the worker’s share of EI premiums for barbers, hairdressers, fishers or drivers of taxis and other passenger-carrying vehicles, and you remitted these premiums (along with your share of EI premiums) to your payroll (RP) account;
  • you reported the income and deductions on a T4 Slip and filed this information on your RP account for 2010 and 2011;
  • the total of employer EI premiums you paid for 2010 was $10,000 or less; and
  • your total employer EI premiums increased in 2011.

If you are eligible, the CRA will automatically calculate the amount of your HCSB using the EI information from the T4 Slips you filed with your 2010 and 2011 T4 Information Returns. The amount to be credited to your payroll account will be no more than $1,000.

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TAX-FREE SAVINGS ACCOUNT (TFSA)

In the Fall of 2011, many taxpayers received a TFSA over-contribution package concerning their 2010 TFSA contributions. For example, if a person made a contribution in 2010, withdrew it, and then re-contributed it in the same year or, withdrew funds and contributed them into another TFSA, there could have been a 1% per month penalty.

If a taxpayer has received a TFSA over-contribution package, they may ask the CRA to review the file and consider waiving the penalty.

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MEDICAL EXPENSES – COSMETIC PROCEDURES

In an August 31, 2011 Technical Interpretation, Canada Revenue Agency (CRA) noted that medical expenses paid after March 4, 2010 for purely cosmetic procedures are ineligible for the Medical Expense Tax Credit (METC).

This generally includes surgical and non-surgical procedures purely aimed at enhancing an individual’s appearance, such as liposuction, hair replacement procedures, botulinum toxin injections, and teeth whitening. The CRA has posted on its website some examples of procedures that will generally be ineligible as medical expenses at www.cra.gc.ca/gncy/bdgt/2010/mdcl-eng.html.

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The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this newsletter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents.

For any questions… give us a call.