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On July 18, 2008 the Canada Revenue Agency (CRA) released a bulletin outlining some of the tax benefits available to individuals and families including the Canada Child Tax Benefit (CCTB) and the Goods and Services/Harmonized Sales (GST/HST) credit. To find out what benefits you and your family may be entitled to, click on the following link:
http://www.cra-arc.gc.ca/nwsrm/rlss/2008/m07/nr080718-eng.html
Did you know…That you can file corporation income tax returns electronically from your desktop computer? The benefits of using the Corporation Internet Filing service include receiving an immediate confirmation of receipt and faster processing and refunds.
Tax professionals such as Padgett Business Services use the CRA’s EFILE services to file eligible corporation income tax returns on behalf of their clients. Many businesses also take advantage of the convenience of using their financial institution’s Internet or telephone banking service to pay tax balances owing.
For more information on filing a T2 return electronically, visit the CRA website at www.cra.gc.ca/corporation-internet.
You can also view the status of a return and access the account balance and transactions, and other services for corporation income tax accounts online. For more information, visit www.cra.gc.ca/mybusinessaccount.
The Canada Revenue Agency (CRA) offers many convenient and accessible service options including accessing forms & services via the Internet. Their electronic services provide tax-payers with easy-to-use tax filing options, step-by-step instructions, and self-serve convenience designed to make processing transactions with the CRA quick and easy. Below is a list of the most popular sites:
1. Accessing the CRA’s secure online services
2. Authorize a representative
3. Change of address
4.Charities
5. Child and family benefits calculator
6. Common adjustments
7. EFILE
8. Electronic payments
9. Forms and publications
10. Important dates
11. International and non-resident taxes
12. My Account
13. NETFILE
14. Persons with disabilities
15. Registered retirement savings plan (RRSP)
16. Review of your tax return by CRA
17. Students
18. Tax Information Phone Service (T.I.P.S.)
19. Tax services offices and tax centres
20. Tax treaties
21. TELEFILE
22. Travel expenses
The prescribed interest rates announced by CRA for the third quarter of 2008 are:
• For overdue taxes, CPP contributions, and EI premiums the rate is 7%.
• The rate paid by CRA for overpayments is 5%.
• The interest rate used to calculate taxable benefits for employees and shareholders from low-interest and interest-free loans is 3%.
• For GST, HST, and air travellers’ security charge the rate is 7% for overdue remittances and 5% for overpaid remittances.
• Overdue remittances for Excise Tax (non GST) and Excise Duty are 7%.
• Overpaid remittances for Excise Tax (non GST) and Excise Duty are 5%.
• Overdue remittances for Excise Duty (beer) are 5%.
The Canada Pension Plan (CPP) is a contributory, earnings-related social insurance program. It ensures a measure of protection to a contributor and his or her family caused by the loss of income due to retirement, disability and death.
There are three types of CPP benefits:
• Disability benefits (which include benefits for disabled contributors and for their dependent children);
• Retirement pension;
• Survivor benefits (which include the death benefit, the survivor’s pension and the children’s benefit).
The CPP operates across Canada, although the province of Quebec has its own similar program, the Quebec Pension Plan (QPP). The CPP and the QPP work together to ensure that all contributors are protected. With very few exceptions, every person in Canada over the age of 18 who earns a salary or a wage must pay into the CPP. You and your employer each pay 50% of the contributions. However, if you are self-employed you pay both portions. You do not make contributions if you are receiving a CPP disability or retirement pension. At age 70, you stop contributing even if you are still working.
Padgett Business Services is proud to announce our sponsorship in the 2nd annual Jim Stonehouse Memorial Golf Tournament to benefit the Ottawa Regional Cancer Foundation (ORCF) being held on Monday July 7, 2008. Jim was a great man who loved his family, his friends and the game of golf. A resident of Kanata, Jim gave of himself freely through his involvement with various charitable organizations in the community, always selflessly and in an effort to support the common good.
We are extremely proud of the relationships we have with our customers. By participating in this and other charity events, we hope to show our community involvement and gratitude to our customers.
For more information on the tournament and how you can register, visit Jim Stonehouse Memorial Golf Tournament
When deciding whether a salary should be paid to a family member, or more specifically to one’s spouse, numerous questions arise. On one side, there is the question of the risk involved that the salary may be unreasonable and having the expense being disallowed by the CRA during an audit. On the other side, there is the benefit of lower tax brackets, RRSP contribution room and unused credits. In a situation where the spouse contributes nothing to the business but is paid a salary which, if paid to an unrelated employee, would have been much lower based on the work performed, the risk mentioned above increases.
However, there are numerous functions that can be performed by family members away from the business premises which are easily overlooked. These functions are summarized below:
In rendering government decisions to accept salaries paid to family members easier, numerous aspects should be considered such as:
The family members’ salary would be reported on T4′s (Releves 1 for Quebec) as they normally would if paid to an unrelated employee.
If you run your own business or you are self-employed, you may be tempted to report only part of your income to the tax authorities. Or you might consider suppressing information about your activities.
If you are audited by the Canada Revenue Agency (CRA) you should conisder this. The CRA auditor has access to the Internet. What will show up if the auditor enters your name or your business name in Google or one of the other search engines? Will the auditor discover information about activities that you have failed to report?
A CRA auditor now routinely uses publicly available search engines, Google for example, to discover information about companies and individuals that are being audited. In one recent case, the CRA disallowed a Voluntary Disclosure application because the taxpayer submitted an incomplete disclosure. He failed to provide information about his involvement in certain business activitis that showed up during a Web search.
So remember. Everyone is watching you on the Web including Big Brother!
Padgett Business Services is a proud sponsor of Sheri Carroll and Tracy Lampron in their support of the Weekend to End Breast Cancer (WEBC) in Ottawa. The Weekend to End Breast Cancer is a two-day, 60-kilometre walk through the neighborhoods of Ottawa, taking place the weekend of June 6-8, 2008. Proceeds benefit the Ottawa Regional Cancer Foundation, and Gatineau area, funding important breast cancer research, education, services and care.
This is the third year that Sheri has taken part in this incredible weekend and she is looking forward to taking part in the WEBC 60 km walk. Check out Sheri Carroll’s WEBC Home Page. Sheri is part of the Saving Our Ta-Ta’s Team and their goal is to raise $60,000 in donations this year.
Its also the third year that Tracy has participated in the walk. Tracy is part of Team Gatineau. Through a partnership between the Ottawa Regional Cancer Foundation and the Fondation du CSSS de Gatineau,the money raised by Team Gatineau will be invested to improve health care for breast cancer patients in the Outaouais. Check out Tracy’s WEBC Home Page.
Keep up the good work ladies!
In an effort to encourage Canadians to save and to provide a tax break, the federal government recently announced the Tax-Free Savings Account (TFSA) in the February 26, 2008 federal budget.
Here are some of the highlights that will be of interest to you:
As you can see, this tax-savings account is an excellent opporutnity for Canadians to invest into while earning tax-free investment income.
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