Business and Personal Tax Updates
Issue 36 – April 2014
April 30, 2014 is the last day to file your 2013 personal income tax return. If you haven’t started yet, give us a call at 506-657-4067 or 1-800-650-4067 (outside Saint John) for expert help in making sure you take advantage of all the deductions and credits available for your situation.
A tax credit that has caused some confusion is the Arts and Fitness Credit. CRA provided clarification on this last year. More on this below.
If you recently bought and sold a condo, CRA may dig into land title records to decide how to tax your transaction. You want to be fully aware of how CRA assesses your purchase and sale, as the difference in taxes owed between realized capital gains and ordinary business income is significant.
For expert guidance on these and other tax related matters give us a call.
To help you reach your business goals, we’re here to help you with your strategic planning, business plans, growth strategies, budgeting and forecasting, sourcing funds, accounting and bookkeeping. If you’ve hit a rough patch, and you’re looking for a turnaround strategy and management, we’re only a phone call away.
P.S. As a favour to a friend or business colleague, feel free to forward this email to those who you think could benefit from the information below.
ARTS AND FITNESS CREDITS: The Separate Receipt Issue
In an April 13, 2013 Ministerial Correspondence, CRA noted that a specific program cannot qualify for both the Children’s Fitness Tax Credit (CFTC) and the Children’s Arts Tax Credit (CATC). However, they acknowledged that an Organization may offer distinct programs, some of which qualify for each credit. They indicated
such Organizations should either issue separate receipts, or a single receipt that clearly segregates the amounts paid for each program.
Action Item: If your child is enrolled in more than one program with an organization, ask for a separate receipt for each program.
CRA ATTACK: Condo Sales
It has been noted recently in several news articles, that the CRA has increased activity in reviewing condominium sales. It appears that CRA is reviewing land titles records to identify short-term condo holds. In such cases, CRA reassesses the gains as “ordinary business income” on the assumption that the vendor’s intention was always to resell or flip the condo at a profit.
While this may be true in some cases, in others the intent was to reside in the property for an extended period. In such cases where the intent was not business in nature, the sale may be considered a capital gain (taxed at half the rate of “ordinary business income”) or no gain at all if qualifying as, and determined to be, a principal residence.
CRA seems to have adopted a policy of “reassess and penalize first, and ask questions only if the taxpayer objects”.
Action Item: If you have received such a reassessment, contact us immediately so that an Objection can be filed. Objections need to be filed within 90 days of the date on the Notice of Reassessment.
WEB TIPS: BizPal.ca
BizPal, www.bizpal.ca, is a free online service providing a database to simplify the process for determining the permit and license requirements to start and operate a business in Canada.
This online tool will prompt you for information pertaining to the business, including the location and industry, to populate a list of permits that may be required. Entrepreneurs, accountants and individuals involved in any type of organization, even charities and NPOs, may benefit from this website.
The service is jointly managed by the federal government, most provinces and territories (excluding Quebec and Nunavut), and numerous municipalities. If a community is
not included in the online service, one should contact their respective jurisdiction for requirements.
Each participating jurisdiction will manage and determine which industry sectors to incorporate into the online service and subsequently identify various permits and licenses required.
Note that this website may not be all inclusive and the user should still conduct their due diligence to ensure regulatory compliance.
Action Item: Check this site before, rather than after, incorporating your Company to ensure that all angles are covered
TAX TICKLER … a quick point to consider…
Considering the purchase or sale of a business? Taxation relating to Restrictive Covenants (ex. non-competition clauses) has changed.
If you need guidance on this, contact us for further details and planning possibilities.
Donna Mazerolle & Associates provides:
- Strategic Planning
- Business Plans
- Accounting and Bookkeeping
- Growth Strategies
- Budgeting and Forecasting
- Growth Management Strategies
- Turnaround Strategies and Management
- Help with Sourcing Funds
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. Do you have questions… give us a call at 506-657-4067 or 1-800-650-4067 (outside Saint John).