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Contribute to Your RRSP

December 5, 2011 By Leave a Comment

The most popular tax tool available to taxpayers is investing in a registered retirement saving plan (RRSP).

Contributions to RRSP’s are tax deductible and the income earned within the plan grows tax deferred until retirement. You can claim a contribution of up to 18% of 2010 earned income to a maximum of $22,450. Earned income is defined as income from employment, from business, net rental income from real estate, CPP disability pension, certain types of royalty, and spousal or child support payments that are included in your income.

The contribution limit may be subject to the year 2010 pension adjustment reversals. Pension adjustments reflect, in most cases, your employer’s contributions to a pension plan or actuarial commitments to such plans in the year 2010. The age limit for contributing to an RRSP is 71. The age limit for converting an RRSP to an annuity or RRIF is also 71. Don’t over contribute!

Government Fosters Jobs and Growth With More Tariff Cuts

November 28, 2011 By Leave a Comment

Tariff relief for Canada’s manufacturers, which will eliminate 70 tariff items and is expected to save Canadian businesses about $32 million annually.

“This builds on our Government’s commitment in Budget 2010 to make Canada a tariff-free zone for industrial manufacturers,” said Minister Flaherty. “By lowering costs for these businesses, we are enhancing their ability to compete in domestic and foreign markets and helping them invest and create jobs here at home. This measure acts on our Government’s commitments under our low-tax plan for jobs and growth and reinforces our G-20 leadership in the fight against protectionism.”

This initiative eliminates customs duties on certain products used by Canadian businesses operating in a variety of manufacturing sectors including food processing, furniture and transportation equipment.

In Canada’s Economic Action Plan, the Government eliminated all tariffs on imported machinery and equipment and manufacturing inputs to make Canada a tariff-free zone for industrial manufacturers by 2015. In Budget 2010, the Government committed to consulting with Canadians to identify areas where further trade liberalization could take place. The tariff relief announced today is a result of those consultations.

Eliminating tariffs on goods used in manufacturing helps Canadian companies operating in a wide range of sectors by lowering their production costs. This will benefit Canadian manufacturers by increasing the competitiveness of their operations, thus contributing to a stronger economy. Since 2009, the Government has eliminated more than 1,800 tariff items and provided more than $435 million in annual tariff relief to Canadian businesses.

PST Compensation to Businesses

May 1, 2010 By Leave a Comment

In Ontario vendor compensation under the RST system will end for filing periods after this date; no compensation will be paid for the three month period (April to June 2010) leading up to the July 1 implementation of the HST.  Once HST is effective in Ontario on July 1, as was the case under the GST, no compensation will be made to HST filers.

Northern residents deductions

February 19, 2010 By Leave a Comment

Did you know…

…that if you are a resident of a northern region, you may be able to get tax relief based on your travel and living costs? That’s right. The northern residents deductions allow those who have lived in a prescribed northern zone or a prescribed intermediate zone on a permanent basis for at least six months to take advantage of two types of deductions:

Generally, if you lived in a prescribed northern zone, you can claim full northern residents deductions. If you lived in a prescribed intermediate zone, you can claim one half of the maximum northern residents deductions. To determine whether you lived in the prescribed zone on a permanent or a temporary basis, the Canada Revenue Agency considers the number of times you were absent from the prescribed zone and the purpose and length of your absences.

If you received travel benefits from your employer that would qualify as extra income, you may be able to claim travel expenses as a deduction. Travel expenses may include:

  • air, train, and bus fares;
  • vehicle expenses;
  • meals;
  • hotel costs and camping fees; and
  • other expenses, such as taxi fares and ferry tolls.

You can claim the lowest of the following three amounts:

  • the travel benefit reported in box 32 of your T4 information slip;
  • your total travel expenses; and
  • the lowest return airfare available at the time of the trip between the airport closest to your residence and the nearest designated city.

The lowest return airfare available at the time of the trip means the lowest return airfare for regularly scheduled commercial flights on the date that the travel began. It also includes any GST/PST and airport taxes. Additional charges, such as flight cancellation insurance, meals, and baggage surcharges are not considered part of the lowest return airfare.

For more information on northern residents travel and residency deductions, go to www.cra.gc.ca/northernresidents.

Annual Open House Raises Money for Operation Come Home

December 14, 2009 By Leave a Comment

Padgett Business Services recently held their annual Christmas Open House.  The event is held each year to show our appreciation and thanks to our clients, business associates, friends & family.   There was a great turnout and we loved seeing everyone at least one more time before the holiday season.    Congratulations to the winners of our door prizes which included:   Senator tickets and iPod Shuffles. 

thank-you-multiple-languagesThanks to our caterers Richard Kletnieks & Brandy Nieto, chefs & owners of Heirloom Cafe.    

Thanks to everyone’s participation in this event, Padgett is donating $5 for every person who attended the event to Operation Come Home.  

Thanks to Julia Longpre for providing more yummy desserts for all to share.

And Thanks to all of our clients, business associates, friends and family who make it so much fun to come into work!

Interest rates for the first calendar quarter

December 10, 2009 By Leave a Comment

interest ratesThe Canada Revenue Agency (CRA) announced on December 3, 2009 the prescribed annual interest rates that will apply to any amounts owed to the CRA and to any amounts the CRA owes to individuals and corporations. These rates are calculated quarterly in accordance with applicable legislation and will be in effect from January 1, 2010 to March 31, 2010.

Income tax

  • The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums will be 5%.
  • The interest rate paid on overpayments will be 3%.
  • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%.

Other taxes

The interest rate on overdue and overpaid remittances for the following taxes will be:

Tax and Duty Overdue remittances Overpaid remittances
  • Goods and Services Tax (GST)
 5% 3%
  • Harmonized Sales Tax
 5% 3%
  • Air Travellers Security Charge
 5% 3%
  • Excise Tax (non GST)
 5% 3%
  • Excise Duty (except Brewer Licensees)
 5% 3%
  • Excise Duty (Brewer Licensees)
 3% N/A
  • Softwood Lumber Products Export Charge
 5% 3%

For information on the prescribed interest rates of other calendar quarters, go to the www.cra.gc.ca/interestrates Web page.

Tis the season for charitable giving

December 10, 2009 By Leave a Comment

Announced today, the Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture and Agri-Food), has a message for Canadians who donate to charity:  “Be an informed donor.”

The Canada Revenue Agency (CRA) is reminding Canadians who plan to give to a registered charity this holiday season to go to www.cra.gc.ca/donors or call 1-800-267-2384 for tips on how to be an informed donor.

donation“While the CRA is actively engaged in educating registered charities on their obligations under the Income Tax Act, it is also concerned with educating Canadians on the importance of being an informed donor,” said Minister Blackburn. “The CRA is committed to supporting the invaluable work of Canadian charities by providing Canadians with information that will enhance donor confidence and reduce cases of fraud in the charitable sector.”

As the regulator of registered charities under the Income Tax Act, the CRA has designed Web pages to help donors make informed decisions when giving to charity. The Web pages provide information on:

  • donations that can help reduce your tax burden;
  • organizations that can issue official donation receipts;
  • registered charities that operate in your community, and how they spend their money;
  • how to raise concerns about particular registered charities; and
  • how to avoid becoming a victim of fraud.

If you plan to donate this holiday season, turn your good intention into a wise move and go to www.cra.gc.ca/donors or call 1-800-267-2384.

Other Tax Planning Issues

December 8, 2009 By Leave a Comment

Consider a Registered Education Savings Plan (RESP) for your children

Review your December income tax installment

Repay outstanding shareholder loans and pay interest on employee loans

Contribute to your spouse’s or common-law partner’s RRSP to the extent of your RRSP deduction limit for 2009. This doubles the amount a couple can withdraw for the Home Buyer’s Plan

Claim your personal tax credits

Keep your transit passes

Pay reasonable salaries to family members

Convert non-deductible debt to deductible interest

Review your will every five years

Split pension income with spouse

imagesConsult your Padgett Business Services

representative to obtain additional tax planning ideas.

$750,000 CAPITAL GAINS DEDUCTION

December 8, 2009 By Leave a Comment

You can make use of the lifetime $750,000 capital gains deduction if you dispose of shares in a qualified small business corporation, a qualified farm property, or a qualified fishing property.

If you have already claimed the $100,000 personal capital gain exemption (ended in 1994) then this reduces the available lifetime capital gains to $650,000.  You must also verify whether you have claimed allowable business investment losses (ABIL) in prior years or have cumulative net investment losses (CNIL) as of December 31, 2009, as these items will also affect the amount of exemption that can be claimed.

GAINS Benefit Rate Table

July 2, 2009 By Leave a Comment

The Ministry of Finance has published a reference table for OAS/GIS/GAINS payments which is updated quarterly.  For more information, see the table here.

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