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Interest Rates

October 1, 2010 By Leave a Comment

The Ontario Ministry of Revenue today announced the interest rates that will apply to any amounts you owe to the ministry and to any amounts the ministry owes to individuals and corporations. By law, we reset the interest rates every three months.

 

Interest rates for October 1, 2010 to December 31, 2010

  • 6% on taxes you owe to the ministry
  • 0% on taxes you overpaid
  • 3% on taxes or refunds you are eligible for as a result of a successful appeal or objection
  • 3% on late International Fuel Tax Agreement payments
  • 3% on International Fuel Tax Agreement refunds the ministry has not paid you within 90 days

For more information visit:

www.rev.gov.on.ca/en/rates/interest

The CRA announces Payroll Changes

September 9, 2010 By Leave a Comment

The Canada Revenue Agency (CRA) recently announced several changes affecting payroll reporting. We highlight three below.

Retiring allowance reporting
Starting in January 2011 (for the 2010 tax year), retiring allowances will be required to be reported on T4 slips rather than T4A slips. This will reduce the burden of filing both slips for the same taxpayer.

Redesign of T4A slip
The T4A slip is being redesigned with a view to simplifying reporting and increasing data quality. The fixed-field design is being converted to a generic style, similar to the T4 slip. The 2010 version of the T4A slip is expected to reflect the redesigned look and to accommodate T4A reporting requirements for all tax years. The new T4A slip is currently in draft format only. Employers should start using the new form in early 2011 to report T4A information for the 2010 tax year. Until then, the current T4A slip should be used for all tax years.

Employee gifts and awards
The CRA has introduced a new tool to assist employers in determining the taxability of employee gifts or awards. The tool is in a question-and-answer format. It leads the user through the CRA’s policy and reviews relevant topics, including:

  • Cash or near-cash gifts and awards
  • Performance-related awards
  • Disguised remuneration
  • Reimbursements
  • Employer-provided social/special events
  • Loyalty points, such as frequent flyer points
  • Gifts or awards provided by a social committee including prize draws

The questionnaire also takes into account the comments included in Income Tax Technical News No. 40 which discusses changes announced by the CRA to its administrative policies with respect to taxable employment benefits.

Canada Revenue Agency Contact Information

July 27, 2010 By Leave a Comment

Do you have any questions about personal income taxes, business registration and taxes, child and family benefits, payment arrangements, and so on? You can call Canada Revenue Agency at the following numbers:

  • TIPS (Tax Information Phone Service) 1-800-267-6999

This automated phone service provides information to individuals and businesses.

  • Individual income tax enquiries 1-800-959-8281

Tax information for individuals, including personal income tax returns, instalments, RRSPs, and the Working Income Tax Benefit.

  • Telerefund 1-800-959-1956

This automated phone service provides information about your income tax refund.

  • Businesses and self-employed individuals 1-800-959-5525

Business and GST/HST registration, payroll, GST/HST(including rebates such as the new housing rebates), excise taxes and other levies, excise duties, corporations, sole proprietorships and partnerships.

  • Universal Child Care Benefit, Canada Child Tax Benefit 1-800-387-1193

UCCB, CCTB and related provincial and territorial programs, child disability benefit and children’s special allowances.

  • GST/HST credit for Individuals 1-800-959-1953

GST/HST credit and related provincial and territorial programs.

  • Forms and publications 1-800-959-2221

Order publications online or download from the CRA site. You can also use the toll free number to order.

  • International Tax Services Office

Individuals 1-800-267-5177

Non-resident corporations 1-800-561-7761 Ext.9144

Non-resident trusts 1-800-561-7761 Ext. 9155

Part XIII tax and Non-resident withholding accounts 1-800-267-3395

  • Payment arrangements(income tax) 1-888-863-8657

Discuss income tax payment arrangements with an agent.

  • Payment arrangements 1-866-864-5823

To discuss payment arrangements for debts owing to Human Resources and Skills Development Canada, such as defaulted Canada Student loans, Employment Insurance overpayments, Employment Programs overpayments and Canada Pension Plan overpayments.

  • TTY (Teletypewriter) 1-800-665-0354

For enquiries from persons who are deaf or hard of hearing, or who have a speech impairment.

  • Charities Client Assistance 1-800-267-2384

Get information about registered charities.

For more information, please go to Canada Revenue Agency/contact

Rules for gifts and awards

July 25, 2010 By Leave a Comment

Did you know that a gift or award that you give an employee is a taxable benefit from employment, whether it is cash, near cash, or non cash. A near cash item is one that can be easily converted to cash such as a gift certificate, gift card, gold nuggets, securities, or stocks.

Cash and near cash gifts or awards are always a taxable benefit to the employee. Non cash gifts or non cash awards, on the other hand, may not be considered a taxable benefit under certain circumstances.

A gift has to be for a special occasion such as a religious holiday, a birthday, a wedding, or the birth of a child.

An award has to be for an employment-related accomplishment such as long or outstanding service, employees’ suggestions, or meeting or exceeding safety standards. An award cannot be performance-related.

If you give your employee a non-cash gift or award for any other reason, this policy does not apply and you have to include the fair market value of the gift or award in the employee’s income. As well, certain kinds of gifts and awards are not eligible, such as cash. For more information, go to Gifts and awards outside this policy.

If you give an item that is the result of a prize draw, or is given by or through your company’s social committee, go to Gifts and awards given through prize draws and social committees.

The gifts and awards policy does not apply to non-arm’s length employees, such as your relatives, shareholders, or people related to them.

Payroll deductions

Where the benefit is taxable, it is also pensionable. Deduct CPP contributions and income tax.

If the taxable benefit is paid in cash, it is insurable— deduct EI premiums. If it is a non-cash benefit, it is not insurable—do not deduct EI premiums. For EI purposes only, near-cash taxable benefits are treated the same as non-cash taxable benefits. Therefore, they are not insurable. Do not deduct EI premiums.

Reporting the benefit

Include the taxable gift, award or social event on a T4 slip in box 14, “Employment income” and in the “Other information” area under code 40 at the bottom of the employee’s slip. For more information, see T4 – Information for employers.

Examples

To see how this policy works, go to Example for 2010 and later years.

For more information, please go to Canada Revenue Agency website.

Protecting the money you give to charity

July 21, 2010 By Leave a Comment

Most of the approximately 85,000 charities registered in Canada abide by the tax laws. When non-compliance is suspected based on public complaints or the information provided on annual information returns, the CRA undertakes an audit. Last year, 810 charities were selected for audit, and as a result, the CRA revoked the charitable status of 40 organizations for serious infractions of the law. Many additional charities also lost their charitable status for failure to file their annual return.

When charitable status is revoked, an organization can no longer issue official tax receipts for the donations it receives and is no longer a qualified donee under the Income Tax Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.

The CRA publishes the names of charities that lose their charitable status on its Web site, so that potential donors are aware that the charities can no longer issue tax receipts. The notice of intent to revoke and other letters relating to the grounds for revocation are available to the public on request by calling 1-800-267-2384.

The CRA Charities Listings, available at www.cra.gc.ca/donors allows donors to search for any charity to view its annual information returns and verify that the charity they wish to donate to is registered. Visitors to the site can also find information on how the CRA regulates charities and tips for donating wisely.

Ontario and British Columbia: Transition to the Harmonized Sales Tax

July 21, 2010 By Leave a Comment

The Government of Ontario and the Government of British Columbia are each introducing a harmonized sales tax (HST) that will come into effect on July 1, 2010.

The HST rate in Ontario will be 13% of which 5% will represent the federal part and 8% the provincial part.

The HST rate in British Columbia will be 12% of which 5% will represent the federal part and 7% the provincial part.

For more information, please refer to the information sheet issued by Canada Revenue Agency about

“Transition to the Harmonized Sales Tax – Continuous Supplies and Budget Payment Arrangements” and

“harmonized Sales Tax: Purchasers of New housing in Ontario“.

A proud sponsor of the Jim Stonehouse Memorial Golf Tournament

July 21, 2010 By Leave a Comment

Padgett Business Services was once again a proud sponsor of the 4rd annual Jim Stonehouse Memorial Golf Tournament benefitting the Ottawa Regional Cancer Foundation (ORCF) held on Monday July 5, 2010. 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 next year, visit Jim Stonehouse Memorial Golf Tournament

Simplified logbook for motor vehicle expense

July 21, 2010 By Leave a Comment

Did you know that a new simplified logbook for motor vehicle expense was introduced by the government to small business owners. This new sample logbook will simplify record keeping, significantly reduce paperwork and still provide reliable data to both business owners and the CRA.

In the 2008 Federal Budget, the Government of Canada, through recommendations by the CFIB, identified the requirement to keep a logbook as the most burdensome aspect of the motor vehicle tax provisions for its members. In response, the Canada Revenue Agency developed an alternative system for recording business travel with the aim to assist businesses in substantiating the business use of a motor vehicle that was used for business and personal reasons.

Businesses can choose to maintain a full logbook for one complete year to establish the business use of a vehicle in a base year. After one complete year of keeping a logbook (starting in 2009 or thereafter) to establish a base year, a three month sample logbook can be used to extrapolate business use for the entire year, providing the usage is within the same range (within 10%) of the results of the base year. Businesses will need to demonstrate that the use of the vehicle in the base year remains representative of its normal use. Thus, for both income tax and GST/HST purposes, the motor vehicle record keeping burden is being reduced.

For more information about the sample logbook policy, go to http://www.cra.gc.ca.

Canada Pension Plan Basics

July 21, 2010 By Leave a Comment

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 benefirts 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.

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