Tax Tips & Advice, TurboTax, Uncategorized

What to Do if You Made Money on Both Sides of the Border

0 Comments 19 April 2014

USA CanadaDid you make money in both Canada and the U.S. last year and are wondering how that will affect your income tax?

The answer depends on what kind of income the money you made is and whether or not you’ve already paid tax on it.

As a Canadian resident, you’re taxed on your world-wide income. And Canada has tax treaties with many countries to ensure that Canadians are not “double-taxed” for the same income that they earn in other countries.

Theoretically, therefore, you just pay tax in Canada for all of your worldwide earnings. In practice, though, it’s not quite so simple. Here’s the lowdown:

The simplest case: business income paid to a resident Canadian – If you have provided a product or service to a customer in the U.S., all you have to do tax-wise is convert the money into Canadian funds (the Canada Revenue Agency (CRA) says that you should use the Bank of Canada exchange rate that was in effect on the day you received the income to do this), and the money becomes part of your business income.

It’s not so simple if you were resident in the U.S. when you made the business income; then, as a contractor, you will have to file a W8 with your client (a tax form for the IRS) and may have to file an American as well as a Canadian tax return.

Foreign employment income – Having foreign employment income is also fairly simple to deal with. Your American employer will provide you with a W-2 (the equivalent of a T4 slip). You will convert the money into Canadian funds (using the Bank of Canada exchange rate that was in effect on the day you received the income to do this) and then enter your foreign employment income in Canadian dollars on line 104 of your T1 personal tax return.

If tax has been withheld, don’t reduce your foreign income by that amount. Instead, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes.

Also look to see if the amount on your W-2 slip has been reduced by contributions to a “401(k), 457 or 403(b) plan, US Medicare and Federal Insurance Contributions Act (FICA),” because if so, you have to add these contributions to your foreign employment income on line 104 on your Canadian return. These contributions may be deductible though.

Rental income from a property in the U.S.  requires some forethought and tax planning because you want to handle the income in the most beneficial way to your personal tax situation.

Tax-wise, you are a Canadian resident for Canadian income tax purposes and a nonresident alien for U.S. tax purposes. Because of this, the person paying the rent is obliged to withhold and remit 30% of the gross rent to the Internal Revenue Service on behalf of the nonresident alien.

This means that if you want to deduct expenses from your rental income, you are going to have to:

1) provide your renter with a withholding waiver (Form W-8ECI)               before you collect any rent so you can avoid the otherwise mandatory 30% withholding.

2) file a U.S. income tax return to report and pay tax on your net rental income.

If you haven’t chosen to eliminate your withholding tax from your rental income, your withholding agent is required to provide you with Form 1042S, detailing the amount of gross rental income received and the amount of non-resident tax withheld. Form 1042 must also be filed with the IRS. You can then choose to file a U.S. income tax return – or choose not to and forego any savings of the 30% withheld.

Here’s the big catch; if you haven’t had non-resident tax withheld, you must file a U.S. tax return. If you don’t do this within the specified time period, the IRS will not only disallow all deductible expenses but will also assess penalties for late filing and underpayment of tax.

A Little Research Can Save a Lot of Grief

This article only deals with three situations that might bring foreign income into your tax scenario – there are others, of course. As you see from the example of having rental income from a property in the U.S., you never want to wait until you’re sitting down to do your taxes to find out how something like having foreign income will affect your income tax. Finding out in advance will help you maximize your tax savings – and stay out of trouble with the tax agencies in both countries.

TurboTax

Update: CRA NETFILE Has Been Reopened

0 Comments 09 April 2014

INT-242-Heartbleed-Creative-FB-April13As of April 13th, the CRA has reopened NETFILE.

For those TurboTax customers who saved their return and want to NETFILE now, please follow these steps to complete filing your taxes:

If you are using TurboTax Online, log back into your account.  You will automatically be taken to where you last left off in TurboTax Online and you can click on Print and File to proceed with filing.

If you are using a CD or download version of TurboTax, follow the steps below to re-open your return.

  1. Open TurboTax.
  2. Go to the File menu and choose Open.
  3. In the Look In field, navigate to the directory and folder that you saved the file in.
  4. Select your file and click Open.
  5. Click on NETFILE in the Top Menu bar and follow the instructions.

Uncategorized

Tax Breaks for Farmers

0 Comments 04 April 2014

farmerWho doesn’t love wandering around a farmers’ market? Tables overflowing with the freshest lettuce, spinach and kale vie with mounds of the plumpest tomatoes and peppers – the produce at a farmers’ market is a feast for the eyes as well as the stomach. Here in Canada we are truly blessed to have as many food producers as we do working the land to provide tasty safe food for all of us.

Especially when you consider how much farmers have to contend with, such as what appears to be a never-ending winter!

As consumers, we can support our farmers by buying their food locally and looking for the ‘product of Canada’ label when we’re shopping in grocery stores.

The government of Canada supports farmers by providing programs to help keep farms viable such as AgriStability and AgriInvest, risk management programs that help protect farms from drops in income.

There are also tax breaks for farmers.

First, farming is a business so farmers can deduct all the usual business expenses from their business income, including Business-use-of-home expenses if they used their farmhouse for business reasons.

But farming is a special kind of business, so farmers can also claim deductions that other businesses cannot, such as the cost of fertilizers and lime, veterinary, medicine and breeding fees and fence repairs.  Interest on loans and the amount of deductible premiums to the Crop Insurance Program are also claimable.

Farmers also have advantages when it comes to capital gains.  For instance:

  • Each individual taxpayer is entitled to realize $750,000 of capital gains tax-free on qualifying farm property during their lifetime. Qualifying property includes real property and quota used in a farming business, as well as shares in a family farm corporation or an interest in a family farm partnership.
  • If you are a farmer, you can transfer ownership of your assets to your spouse at cost, which means that no capital gains will be realized until your spouse disposes of the property.
  • You can also transfer the ownership of capital property used in your farming business to your children at cost. Once again, no capital gains will be realized until your children sell the property.

There is a catch though; to qualify for the tax deductions above, you have to be a full-time farmer, a person who is operating a farm as a business in the expectation of making a profit. Being a hobby farmer doesn’t count tax-wise.

And besides being eligible for all the deductions above, full-time farmers have no limit on the amount of losses that are deductible. Such a loss can be deducted from your income from all sources – and carried back for three years or carried forward for up to 20 years.

If you ran your farm as a business but farming was not your chief source of income, your loss will be restricted and how much you can deduct from your other income will depend on the amount of your net farm loss.

Uncategorized

Put on your best #TaxesDoneCA face for a chance to win great prizes!

0 Comments 02 April 2014

Reminder2-612x612It’s that time of year. You diligently gathered your receipts, held onto your transit passes and filed your expenses. That’s right lady and gents, it’s tax refund time. But this year, pick up some extra moolah along the way.

Pocket an extra $5,000 by entering Intuit’s #TaxesDoneCA contest. Tax refund and an extra cheque? Sounds like a win-win.

All we want to see is a photo of how you looked when you found out how much you’re getting back/owe from filing your income taxes. Were you feeling smug? Excited? Relieved? We want to see.

However you looked, Turbo Tax wants you to post the image on Twitter or Instagram with the hashtag #TaxesDoneCA. Follow @TurboTaxCA on either social media, check your settings to ensure your photo will show up publically and that’s it.

Judges will choose winners based on an image’s focus, lighting, subject, composition and impact and creativity, which means it’s time to turn your model face on for the camera. (But please no inappropriate shots!)

Not yet a TurboTax customer? You don’t need to have bought Turbo Tax to enter (but we’d obviously like it if you did). It’s as simple as that.

While only one person can win the grand prize, we’re also giving away two online copies of Turbo Tax each week. You can use them yourself or give them away to a friend, that’s up to you.

The contest ends on April 30 11:59 p.m., which means you better file your taxes on time. Last year, Canadians received an average tax refund of about $1,600, so why delay your filing and your contest entry?

Turn on those lights, camera and action for Intuit’s #TaxesDoneCA contest. For more detailed contest rules, click here.

TurboTax

TSFAs – What You Need to Know

0 Comments 17 March 2014

CELIBMO Bank of Montreal’s latest Annual TFSA Report found that while almost half of Canadians (48%) now have a TFSA account, nowhere near that percentage of us are actually knowledgeable about what a TFSA account is and how to use it.

So today we present a TFSA cheat sheet so you can bone up on TFSAs and, more importantly, make sure that you’re not missing out on this great savings and investment opportunity.

What is a TFSA

A TFSA is a Tax-Free Savings Account.

Key point #1: Tax-free.  A TFSA lets you set money aside tax-free throughout your lifetime. You pay no income tax on investment returns earned in your account and there are no taxes on funds that are withdrawn (unlike an RRSP (Registered Retirement Savings Plan).

Key point #2: They’re not just for money. TFSA accounts can hold the same kind of investments as RRSP accounts; securities listed on a designated stock exchange, mutual funds, guaranteed investment certificates (GICs), bonds and certain shares of small business corporations as well as cash.

(Only 11% of Canadians correctly identified all six types of investments that are eligible to be held within a TFSA in the BMO Annual TFSA Report.)

How Much You Can Contribute

Originally, when TFSAs were first created in 2009, you were able to contribute $5,000 a year but as of 2013, you can now contribute $5,500 – a fact only 19% of people knew in the BMO study!

And you accumulate TFSA contribution room every year – even if don’t open a TFSA account or file an income tax return.

Look at the math; as the TFSA dollar limit for 2009, 2010, 2011 and 2012 was $5,000 and the TFSA dollar limit for 2013 and 2014 is $5,500, you have accumulated $31,000 in TFSA contribution room so far.

And changes in the value of investments inside your TFSA do not affect your TFSA contribution room for current or future years. If you put $5,500 in your TFSA account, for instance, and the money earned $100 in interest, you would still be able to contribute $5,500 to your TFSA the next year, not $5,400.

Don’t over-contribute, though. If you do, you will be charged 1% of the highest excess TFSA amount in the month, for each month you are in an excess contribution position. (1 in 10 people have over-contributed to their TFSA accounts according to the BMO Annual TFSA Report.)

When to Use a TFSA

There is no yearly deadline for TFSAs; you can get one at any time during the tax year.

Strategically, TFSAs are not competition for RRSPs but complements in your long-term savings plans.

For instance, TFSAs can excellent investment vehicles for funding retirement as unlike RRSPs, withdrawals from TFSAs are not taxed. Particularly if you have a low income, are closing in on retirement, and anticipate having a low income in retirement, you may want to consider a TFSA rather than an RRSP as contributing to an RRSP doesn’t have much of a tax benefit when your income is low.

On the other end of the life cycle, TFSAs can be excellent saving accounts for people starting out who are trying to save for big expenses such as a first home.

But always keep the difference in interest rates on money saved and money borrowed in mind. If you have credit card debt and/or mortgage debt, it’s costing you a lot more than you’ll ever make on cash that you put into a TFSA account, so you should always pay off debt first.

And for people who can afford to, there’s no reason not to have both TFSAs and RRSPs and benefit from both the tax deduction an RRSP provides and the tax-free benefits of a TFSA.

TurboTax

Who is Winning Tax Season?

0 Comments 17 March 2014

Ever wonder who files first? Which city? Which province? Who claims charitable deductions more often? Who contributes most to RRSPs? Well, we have.

We did some research, and this is what we found. Click on the infographic below to see more:

INT-180 CanadianTax_Infographic_FULL-LoRes

Uncategorized

TurboTax #TaxesDoneCA Official Rules and Regulations

0 Comments 15 March 2014

Intuit #TaxesDone Contest

OFFICIAL RULES

 

NO PURCHASE NECESSARY. A PURCHASE OR PAYMENT OF ANY KIND WILL NOT INCREASE YOUR CHANCES OF WINNING.

 

1. ELIGIBILITY: The Intuit “#TaxesDone” Contest (the “Promotion”) is open only to legal residents of Canada (excluding residents of Quebec) with legal Canadian citizenship and physically residing in Canada who are at least eighteen (18) years old at the time of entry. Employees of Intuit Inc., its promotional partners and agencies, and any of their parent companies and affiliate companies as well as the immediate family (spouse, parents, siblings and children) and household members of each such employee are not eligible to participate or win a prize.  The promotion is subject to all applicable provincial, municipal, territorial and local laws and regulations.  It is void where prohibited by law.

 

2. SPONSOR:  Intuit Canada ULC, 5100 Spectrum Way, Mississauga, Ontario, L2W 5S2 Canada.  Administrator: Marden-Kane, Inc., 1055 Franklin Ave., Suite 300, Garden City, NY11530USA.

 

3. AGREEMENT TO OFFICIAL RULES: Participation in this Promotion constitutes your full and unconditional agreement to these Official Rules and Sponsor’s and Administrator’s decisions.  These decisions are final and binding in all matters related to this Promotion.  Receipt of a prize is contingent upon fulfilling all applicable requirements set forth herein.

 

4. TIMING: The Promotion begins on March 13, 2014 at 12:00 a.m. Eastern Time (“ET”) and ends on April 30, 2014 at 11:59 p.m. ET (the “Promotion Period”) which is further divided into seven (7) Entry Periods (each an “Entry Period”) as defined in the Entry, Judging and Prize Chart (the “Chart”) below.  Sponsor’s computer is the official time-keeping device for the Promotion.

 

ENTRY AND PRIZE CHART (the “Chart”)

 

ENTRY PERIOD

START

12:00:00 AM

END

11:59:59 PM

WINNER

NOTIFICATION

NUMBER OF PRIZE WINNERS/PRIZE

1

Thursday

3/13

Wednesday

3/19

Friday

3/21

2 Finalist Prizes – a free copy of TurboTax Premier.

2

Thursday

3/20

Wednesday

3/26

Friday

3/28

2 Finalist Prizes – a free copy of TurboTax Premier.

3

Thursday

3/27

Wednesday

4/2

Friday

4/4

2 Finalist Prizes – a free copy of TurboTax Premier.

4

Thursday

4/3

Wednesday

4/9

Friday

4/11

2 Finalist Prizes – a free copy of TurboTax Premier.

5

Thursday

4/10

Wednesday

4/16

Friday

4/18

2 Finalist Prizes – a free copy of TurboTax Premier.

6

Thursday

4/17

Wednesday

4/23

Friday

4/25

2 Finalist Prizes – a free copy of TurboTax Premier.

7

Thursday

4/24

Wednesday

4/30

Friday

5/2

2 Finalist Prizes – a free copy of TurboTax Premier.

Grand Prize Winner

(Determined from Finalist Prize Winners)

Monday

5/5

1 Grand Prize Winner –

$5,000.00 cash

 

All dates are 2014.  All times are Eastern Time Zone.

 

5. HOW TO ENTER:

We want to see your personal reaction/expression or that of your family/friends when you find out what you are getting back or owe on your taxes.  Take a photo (which must contain a least one human face) that demonstrates your reaction to your taxes and submit it to our Instagram or Twitter account (the “Entry”).

 

There are two (2) ways to submit you photo entry:

 

[1] INSTAGRAM:

  1. Instagram users must follow @TurboTaxCanada
  2. Photo must include the following hashtag #TaxesDoneCanada
  3. Before entering the Contest via Instagram, the “Photos Are Private” option in the account settings on your Instagram account must be set to “OFF”.

 

[2] TWITTER:

  1. Twitter user must follow @TurboTaxCanada.
  2. Photo must include the following hashtag #TaxesDoneCA

 

To enter the Contest you need to be a registered user of either Instagram (“Instagram”) or  www.Twitter.com (“Twitter”) or log into your Instagram or Twitter account.  If you do not have an account, go to the Instagram application and download it to you smart phone mobile device or www.twitter.com to create one. Instagram and Twitter accounts are free. By submitting your information and creating an account, you agree to the Instagram or Twitter terms of use and privacy notice. If you do not agree to these terms of use and privacy notice, you cannot create an Instagram or Twitter account, or participate in this Contest.

 

By uploading your Photo, you agree that your Photo conforms to the Guidelines and Content Restrictions as defined below and that Sponsor, in its sole discretion, may remove your Photo and disqualify you from the Promotion if it believes that your Photo fails to conform to the Guidelines and Restrictions.

 

Content Restrictions:

 

  • The Photo must not contain material that violates or infringes another’s rights, including but not limited to privacy, publicity, copyright, trademark or other intellectual property rights;
  • Participant must have permission from all individuals displayed in the Photo to use their image and/or likeness in the Photo and to grant the rights set forth herein and if requested, participant must be able to provide such permissions in a form acceptable to Sponsor;
  • The Photo must not disparage or embarrass Sponsor, Administrator or any other person or party affiliated with the promotion and administration of this Promotion;
  • The Photo must not feature brand names or trademarks of others; Photo may contain Intuit’s mark in Photo solely for the purpose of this Contest;
  • The Photo must be created solely by participant;
  • The Photo must not contain material that is inappropriate, indecent, obscene hateful, tortious, defamatory, slanderous or libelous;
  • The Photo must not contain anything that promotes bigotry, racism, hatred or harm against any group or individual or promotes discrimination based on race, gender, religion, nationality, disability, sexual orientation or age; and
  • The Photo must not contain material that is unlawful, in violation of or contrary to the laws or regulations in any jurisdiction where Photo is created.

If your Photo meets all of the above Guidelines and Content Restrictions, you will receive one (1) Contest entry into the applicable Entry Period.

 

Limit: You may upload a maximum of two (2) Photos per Participant during each Entry Period.  Photos received in excess of the stated limit will be void. Photos generated by script, macro or other automated means are void. If requested, participant must be able to provide permissions from others featured in the Photo in a form acceptable to Sponsor. Uploading a Photo constitutes participant’s consent to give Sponsor a royalty-free, irrevocable, perpetual, non-exclusive license to use, reproduce, modify, publish, create derivative works from, and display such whole or in part, on a worldwide basis, and to incorporate them into other works, in any form, media or technology now known or later developed, including for promotional or marketing purposes. If requested, participant will sign any documentation required for Sponsor or its designees to make use of the non-exclusive rights participant is granting to use the Photo and optional photo.  Released Parties (as defined in Section 10, below) are not responsible for lost, late, stolen, damaged, incomplete, invalid, un-intelligible, garbled, delayed or misdirected Photos, all of which will be void.

 

In the event of a dispute over the identity of any potential winner, the entry will be declared made by the authorized account holder of the account used for entry, and potential winner may be required to provide identification sufficient to show that he/she is the authorized account holder.  Each potential winner may be required to show proof of being an authorized account holder.

 

6. CONTEST JUDGING: A panel of qualified judges selected by Sponsor will use the objective criteria listed below.  The judging panel will select the highest-scoring Photos from among all eligible Photos received by the dates listed in the Chart in Section 4 above:

 

Finalist Judging: Once an Entry Period has closed all eligible Entries received by the close of that Entry Period will be scored based on the following judging criteria*:

  • Focus (20%);
  • Lighting (20%)
  • Subject (20%)
  • ·Composition (20%); and
  • Impact and Creativity (20%)

 

In the event that not enough qualified entries are received Sponsor reserves the right to select less than 14 Finalists’.

 

Grand Prize Judging: All eligible Finalists’ Photo will be scored based on the above judging criteria to determine one (1) Grand Prize winner*.

 

*In the event of a tie, the Winner(s) will be determined based on whichever Entry received the highest score in the impact/creativity category from the judging criteria.  In the event of a tie in impact/creativity judging criteria, the Entries will be re-judged by a different panel of judges.

 

7. WINNER NOTIFICATION:

If you are selected as a winner from your Instagram Entry:  The Sponsor will contact potential Prize Winner via direct message to the potential Prize Winner’s Instagram Account with a photo that will have winner messaging.  The potential Prize Winner will be required to respond to the direction in the photo message within 24 hours with full contact information.

If you are selected as a winner from your Twitter Entry: The Sponsor will contact potential Prize Winner via private message to the potential Prize Winner’s Twitter Account.  The potential Prize Winner will be required to respond to the direction in the message within 24 hours with full contact information.

Winners will be notified on or around the dates listed in the Chart in Section 4 above and will be required to sign and return a Declaration of Compliance, Liability and (and where not prohibited) a Publicity Release, which must be received by Administrator by fax or email within two (2) days of the date the document is sent or attempted to be sent, in order to claim the prize. If a potential winner cannot be contacted, fails to execute and return the Declaration of Compliance, Liability and Publicity Release or provide their mailing address within the required time period, does not comply with these Official Rules, the potential winner forfeits the prize.  If a potential winner is disqualified for any reason, the prize may be awarded to a runner-up, if any, in Sponsor’s sole discretion. Only three (3) alternate winners may be determined, after which the applicable prize will not be awarded.

 

Without limiting the generality of these Official Rules, each winner shall irrevocably grant, transfer, convey and assign to Sponsor the entirety of the rights in and to the Photo and all renewals and extensions of copyright, and the right to secure copyright registrations thereto in perpetuity including, without limitation, the rights to use the Photo for any and all purposes in any and all media whether now known or hereafter developed, on a worldwide basis, in perpetuity. Each winner accepts and acknowledges that Sponsor shall not be obligated to use the Photo and that Sponsor in its sole discretion shall have the right to refrain from using the Photo. Sponsor shall not incur any liability whatsoever to the extent Sponsor chooses to refrain from any exploitation of its rights hereunder. Each winner will indemnify Sponsor, Released Parties (as defined in Section 10, below) and any licensee of Sponsor against all claims, damages, liabilities, and expenses (including reasonable counsel fees and legal expenses) arising out of any breach of these terms.

 

8. PRIZES: ONE (1) GRAND PRIZE (awarded to the top scoring Finalist): $5,000.00 CAD. Prize awarded in the form of a check or a wire transfer to the winner’s bank account.  Retail Value (“RV”) is $5,000.00 CAD.  FOURTEEN (14) FINALIST PRIZES: a copy of TurboTax Premier.  Prize awarded as a product code to download single instance of TurboTax Online Premier on Turbotax.ca website.  Approximate Retail Value (“ARV”) is $70.00 CAD each.  Total ARV of all prizes is: $5,980.00 CAD.

 

Limit: One (1) prize per eligible Participant. Prizes will be fulfilled within 8-10 weeks. The prizes are non-transferable and no substitution will be permitted unless Sponsor, in its sole discretion, determines otherwise.  Sponsor reserves the right to substitute a prize for one of comparable or greater value, at its sole discretion.  All taxes and any expenses not expressly provided for in these Official Rules are solely the responsibility of the recipient.

 

9. PUBLICITY: Acceptance of any prize shall constitute and signify each winner’s agreement and consent that Sponsor and its designees may use the winner’s name, likeness, photo, Photo, and/or prize information in connection with the Promotion for promotional, advertising or other purposes, worldwide, in any and all media now known or hereafter devised, including the Internet, without limitation and without further payment, notification, permission or other consideration, except where prohibited by law.  Sponsor and its designees, shall have the right to edit, exploit, adapt, distribute, post, and create derivative works of, in whole or in part, and in combination with other materials, in any manner, for any advertising, promotional, trade, commercial or other purposes in any and all media, now or hereafter devised, worldwide, in perpetuity, and without further payment or consideration, notification or permission.

 

10. RELEASE: By participating in the Promotion and/or accepting a prize, the Participant agrees to release and hold harmless Sponsor, Administrator and their respective subsidiaries, affiliates, suppliers, distributors, advertising/promotion agencies, and prize suppliers/partners, and each of their respective parent companies and each such company’s officers, directors, employees and agents (collectively, the “Released Parties”) from and against any claim or cause of action, including, but not limited to, personal injury, death, or damage to or loss of property, arising out of participation in the Promotion or receipt or use or misuse of a prize.

 

11. GENERAL CONDITIONS: Sponsor reserves the right to cancel, suspend and/or modify the Promotion, or any part of this Promotion, if any fraud, technical failures, human error or any other factor impairs the integrity or proper functioning of the Promotion, as determined by Sponsor in its sole discretion.  If terminated Sponsor may, in its sole discretion, determine the winners from among all non-suspect, eligible Photos received up to time of such action using the judging procedure outlined above.  Sponsor, in its sole discretion, reserves the right to disqualify any individual it finds to be tampering with the Photo process or the operation of the Promotion or to be acting in violation of the Official Rules of this or any other promotion or in an unsportsmanlike or disruptive manner and void all associated Photos.  Any attempt by any person to deliberately undermine the legitimate operation of the Promotion may be a violation of criminal and civil law, and, should such an attempt be made, Sponsor reserves the right to seek any and all remedies available from any such person to the fullest extent permitted by law.  Sponsor’s failure to enforce any term of these Official Rules shall not constitute a waiver of that provision.

 

12. LIMITATIONS OF LIABILITY: Released Parties are not responsible for: (1) any incorrect or inaccurate information, whether caused by participant, printing, typographical or other errors or by any of the equipment or programming associated with or utilized in the Promotion; (2) technical failures of any kind, including, but not limited to malfunctions, interruptions, or disconnections in phone lines or network hardware or software; (3) unauthorized human intervention in any part of the Photo process or the Promotion; (4) printing, typographical, technical, computer, network or human error which may occur in the administration of the Promotion, the uploading, the processing or judging of Photos or votes or the tabulating of votes, the announcement of the prizes or in any Promotion-related materials; (5) late, lost, undeliverable, damaged or stolen mail; or (6) any injury or damage to persons or property which may be caused, directly or indirectly, in whole or in part, from participant’s participation in the Promotion or receipt or use or misuse of any prize (including any travel/activity related thereto).  Released Parties are not responsible for misdirected or undeliverable Photos or for any technical problems, malfunctions of computer systems, servers, providers, hardware/software, lost or unavailable network connections or failed, incomplete, garbled or delayed computer transmission or any combination thereof.  Released Parties are not responsible for any unauthorized third party use of any Photo.

 

13. DISPUTES: If any provision of these Official Rules is invalid under the law, rules or regulations of any jurisdiction in Canada, the invalidity of such provision shall not affect the validity of the remaining provision.  Except where prohibited, you agree that: (1) any and all disputes, claims and causes of action arising out of or connected with this Promotion or prize awarded shall be resolved individually, without resort to any form of class action, and exclusively by the United States District Court for the Long Island District of New York or the appropriate New York State Court located in Nassau County, New York; (2) any and all claims, judgments and awards shall be limited to actual out-of-pocket costs incurred, including costs associated with entering this Promotion, but in no event attorneys’ fees; and (3) under no circumstances will you be permitted to obtain awards for, and you hereby waive all rights to claim, indirect, punitive, incidental and consequential damages and any other damages, other than for actual out-of-pocket expenses, and any and all rights to have damages multiplied or otherwise increased. All issues and questions concerning the construction, validity, interpretation and enforceability of these Official Rules, or the rights and obligations of the participant and Sponsor in connection with the Promotion, shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any choice of law or conflict of law rules (whether of the State of New York or any other jurisdiction), which would cause the application of the laws of any jurisdiction other than the State of New York.

 

14. PARTICIPANT’S PERSONAL INFORMATION: Participant is providing information to Sponsor and not to Instagram or Twitter. Information collected from persons participating in this promotion is subject to Sponsor’s Terms of Use https://privacy.intuit.com/cpi/do/home and Privacy Policy http://about.intuit.com/privacy/ as well as Administrator’s Privacy Policy http://www.mardenkane.com/privacy-policy. Each participant expressly agrees to the use of his/her personal information for such purpose. The Released Parties will not sell, share or otherwise disclose information collected in any manner with third parties, other than those parties necessary to fulfill the above purposes, unless participant has given his prior express consent to receive additional information from the Released Parties or a third party. Participants, please note that participants’ data will be transferred outside of each eligible country to the United States.  By participating in the Promotion, participants expressly agree to such transfer.

 

15.  WHO WON: To request the name of the winner, send an e-mail with the subject line: “TaxesDoneCA” to winners@mkpromosource.com.  Requests must be received no later than May 30, 2014. The list will be sent when the winners verified.

 

© 2014 Marden-Kane, Inc.  All rights reserved.  Participants are hereby authorized to copy these Official Rules on the condition that it will be for the participant’s personal use only.

 

This Contest is in no way sponsored, endorsed or administered by, or associated with, Instagram or Twitter, and their names and logos are registered trademarks of each.

 

 

QuickTax, Tax Tips & Advice, TurboTax, Uncategorized

The Real Cost of Not Paying Your Taxes on Time

0 Comments 09 March 2014

Getting your income tax filed and paid up if you owe money is just something that you have to make a priority, no matter what. It’s too expensive not to.

The Penalties for Paying Late

Compound Daily InterestWhen-and-How-to-File-Corporate-Income-Tax

For one thing, if you don’t pay your outstanding income tax balance by midnight on April 30th, 2014, the Canada Revenue Agency (CRA) starts charging compound daily interest the very next day, May 1 – and keeps charging it every day until you’ve fully paid off whatever money you owe.

On May 1st they will also start charging you interest on any penalties assessed on your tax, such as the late-filing penalty. (See the next section.)

The interest rate for overdue taxes from January 1, 2014 through March 31, 2014 is 5%, but this is subject to change. The rates are calculated quarterly, so the interest rate that will be applied in May, 2014 may be higher or lower than this.  You can see the current and past prescribed interest rates here.

The Late-Filing Penalty

If you don’t get your personal income tax for 2013 filed by the April 30th, 2014 deadline, you will also be charged a late-filing penalty, which is 5% of your 2013 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

If you’re a “repeat offender”, the penalty is more severe; If the CRA charged you a late-filing penalty on your return for 2010, 2011, or 2012, your late-filing penalty for 2013 may be 10% of your 2013 balance owing, plus 2% of your 2013 balance owing for each full month your return is late, to a maximum of 20 months.

No Benefit Payments

And eligibility for many benefits, such as the Canada child tax benefit and the GST/HST credit, depends on the information on your income tax form such as your net income. If your income tax return is filed late, your benefit payments will be interrupted, as the CRA will not know what your current eligibility status is.

 

Advice for Late Payers

1) Don’t put off filing your taxes on time because you think you may owe money or are worried about being able to pay all the tax you owe. If you do, you’re just making things even worse for yourself financially.

Instead, make sure that you get your income tax filed by April 30th even if you can’t pay all the tax you owe on that date. That way, even though you may be charged interest on the unpaid balance, at least your benefit payments will keep coming and you won’t be charged a late-filing penalty on top of everything else.

2) Check out the possibilities of paying over time or having your interest penalties for paying late waived.

The Canada Revenue Agency is open to making payment arrangements with taxpayers who can’t pay all the income tax they owe by the deadline. When the time comes, call them at 1-888-863-8657 if you need to.

Also, under the CRA’s Taxpayer Relief Provisions, interest penalties may be cancelled or waived in the case of

  • extraordinary circumstances;
  • actions of the CRA;
  • inability to pay or financial hardship; or
  • other circumstances.

To make such a request, you will need to complete and send in Form RC4288, Request for Taxpayer Relief.

So if you find yourself in this situation come April, don’t panic. Instead, contact the Canada Revenue Agency as soon as possible and get the situation resolved.

Seniors, TurboTax, Uncategorized

Can You File For Free?

0 Comments 07 March 2014

tax timeFile Your Income Tax Free With TurboTax

Why pay to do and file your income tax if you don’t have to?

TurboTax believes that people pay enough tax already and that simple tax returns should be filed for free.

To that end, we offer free income tax filing for:

People who have only T4 income slips to file.

This free TurboTax online software is perfect for people who have no investment income or RRSPs and are not self-employed. Other than that, it doesn’t matter if you’re just starting your career or a pensioner; there’s no income limit. All you have to have is a simple tax situation where all you have to file is T4 slips.

Students.

Did you pay tuition in 2013? Did you have a household income of $20,000 or less? Then you can use our Student online software to reclaim your tuition, textbook and other education expenses for free.

People with household incomes of $20,000 or less.

If your gross household income (your income before taxes) was $20,000 or less in 2013, including all your T4 slips and any charitable donations that you’ve made, you qualify for the TurboTax Freedom Program.  Click on the blue ‘Get Started’ button to get your free tax filing underway.

People who served in the Military or Police overseas in 2013.

If you are a member of the military or police who were on active overseas duty during the 2013 tax year or are the spouse of a qualifying member and you file your return together, you can choose the TurboTax Online product that fits your personal situation best, and complete and file your income tax for free.

If you’re married, be sure you choose the option to prepare your and your spouse’s return together. That way you’ll ensure you get both tax returns done and filed for free.

The Best Part

And the best thing about these free TurboTax options? They’re just like any other version of TurboTax.

Whichever one you use:

  • You’ll be guided through the process of completing your return by answering questions posed in simple, everyday language.
  • You’ll get every possible tax deduction and credit that applies to you.
  • And because you’ll be Netfiling your return, you’ll get your refund in as few as eight days.

TurboTax, Uncategorized

The Real Life Tax Implications of Downton Abbey

0 Comments 23 February 2014

downtonWho doesn’t envy the Downton Abbey lifestyle?

But let’s be honest. It’s not the life of Daisy the scullery maid and her downstairs drudges that we’re green about; it’s the luxurious  life of Lady Mary and her titled family and friends. There’s just something appealing about doing nothing much all day and being waited on hand and foot while you do it.

But suppose, through some warp of time and geography, you were able to run your own Downton Abbey right here in Canada. What would that do to your income tax?

First of all, whether you liked it or not, most of your income would come from farming, making you self-employed in terms of your taxes. You would also have rental income from your tenants. And hopefully you would be a smarter investor than Lord Grantham and would also have some income from your investments.

You’re going to need all the income you can get. If your situation parallels Lord Grantham’s, you have a personal household of very expensive dependents (witness the way Mary and Edith dress), all of whom are over 18 so you won’t be able to claim them as tax deductions. Strangely, you seem to keep taking in more relatives (such as Rose) all with equally expensive tastes.

You will get one break; as your spouse has no income, you’ll be able to claim the spouse or common-law partner amount (line 303 on your T1 return). It would be wise to invest heavily in a spousal RRSP!

Of course, as a self-employed person running an estate, you will have lots of expenses to claim as tax deductions.

The cost of insurance on all your valuable possessions. Check.

The cost of maintenance and repairs to the estate. Check.

The cost of your new BMW or Ferrari. Nope. You would have been able to if you bought it for business purposes. So if you did buy something more suitable to tool around the estate and check on your animals and tenants, you could write that off over several years through Capital Cost Allowance. Ditto any new farm machinery or other equipment.

And the cost of that club in the city you regularly visit? Nope, you can’t write that off either.

On the other hand, besides being a farmer and a landlord, you are also an employer. Besides being able to deduct the wages of all those housemaids and footmen, you’ll also be able to deduct your food and entertainment expenses for the annual Christmas party for employees.

On the downside though, being an employer means a lot more tax responsibilities for you. Like every other employer, you’ll have to maintain employee records, deduct taxes from your employees’ paycheques, and file all the relevant forms such as T4 information slips.

And because you also provide room and board to all your servants, which is a taxable benefit, you’ll have to add to each employee’s salary the fair market value of the board and lodging you provide and fill in yet another box on each employee’s T4 slip.

You’ll be happy to know that providing uniforms that employees must wear during the course of their duties is not a taxable benefit, so you won’t have to add that cost on too.

But you won’t be able to deduct the cost of them as an expense because they’re not an expense related to producing income.

Almost makes you start wishing that were just a regular Joe or Jolene again, doesn’t it? But remember; you wouldn’t have to deal with all this by yourself. If you were the owner of a Canadian Downton Abbey, you’d certainly be able to afford to hire your own accountants and tax lawyers – and they’d be a tax deduction, too!

TurboTax

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