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Some locations are offering a drop off service, where you can drop off your taxes and pick them up at a later time.

Tax changes and other changes

Enhanced Canada Pension Plan/Quebec Pension Plan

Individuals and families Enhanced Canada Pension Plan/Quebec Pension Plan – Starting in 2019, the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) are being gradually enhanced. This means that if you contribute to either the CPP or the QPP, you will receive improved benefits in exchange for making higher contributions. You can claim a deduction for your enhanced contributions to the CPP or QPP.

Canada Training Credit Limit

As of January 1, 2019, if you meet certain conditions, you will be able to accumulate $250 per year, to a maximum over your lifetime of $5,000, to be used in calculating your Canada Training Credit, a new refundable tax credit that will be available for 2020 and future years. Based on information from your return, the CRA will determine your Canada Training Credit Limit for the 2020 tax year and provide it to you on your Notice of Assessment for 2019. For 2020 and future years, you may be able to claim a Canada Training Credit equal to your Canada Training Credit Limit for the year or 50% of your eligible tuition and fees paid to an educational institution in Canada, whichever is less.

Canada Workers Benefit

For 2019, the Canada workers benefit (CWB) replaces and strengthens the working income tax benefit (WITB). The CWB is an enhanced, more accessible, refundable tax credit.

Income exempt under the Indian Act

A new section called “Indian Act – Exempt income” has been added to page 2 of the Income Tax and Benefit Return, and a new form has been created, Form T90, Income exempt under the Indian Act. The information provided on the return and form will allow the CRA to calculate your Canada Training Credit Limit for the 2020 tax year and may also be used to calculate your CWB for the 2019 tax year, if applicable.

Communal organizations

For 2014 and later tax years, income from a business earned by the trust that is then allocated to a member of the congregation is deemed to be income from a business carried on by that member. This may allow members of a communal organization to claim the CWB for 2019 and later years, and the WITB for the 2014 to 2018 tax years.

Kinship Care Providers

For 2009 and later years, for the CWB and the former WITB, a care provider may be considered to be the parent of a child in their care, regardless of whether they receive financial assistance from a government under a kinship care program. As a result, the care provider may be entitled to claim the child as an eligible dependent for purposes of claiming the benefit. Also, for these years, financial assistance payments received by care providers under a kinship care program are not included in income and not included when determining entitlement to benefits and credits based on income.

Home Buyers’ Plan

The maximum amount you can withdraw from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan (HBP) increased from $25,000 to $35,000 for withdrawals made after March 19, 2019. If you are not considered a first-time home buyer for the purposes of the HBP, and you experience a breakdown in your marriage or common-law partnership, you may be able to participate in the HBP after 2019 under certain conditions.

Medical Expenses Tax Credit

For expenses incurred after October 16, 2018, certain cannabis products purchased for a patient for medical purposes will be considered eligible medical expenses for the medical expense tax credit, once they become permitted for legal sale under the Cannabis Act. For more information, see Guide RC4065, Medical Expenses.

Donations and gifts (line 34900 of the return)

For donations made after March 18, 2019, in order to qualify for the enhanced tax incentives for donations of cultural property, the property no longer needs to be of national importance.

Allowances for members of legislative assemblies and certain municipal officers

For 2019 and later tax years, non-accountable allowances paid to elected members of legislative assemblies, certain municipal officers, and members of public or separate school boards are required to be fully included in income.

Zero-emission vehicles

If you are self-employed or claiming employment expenses, you may be able to claim capital cost allowance on zero-emission vehicles. Starting in 2019, there is a temporary enhanced first-year capital cost allowance of 100% for eligible zero-emission vehicles. Eligible vehicles must be acquired after March 18, 2019, and become available for use before 2024. The enhanced allowance decreases if the vehicle becomes available for use after 2023 and before 2028.

Other Changes

  • Removal of Direct Deposit enrolment information from the T1 return: You will no longer see data on the last page of the Tax Return
  • In 2019, Schedule 1 is part of the T1 General.
  • The T1013 2D Barcode process is being discontinued for the 2019 tax year
  • T1013 service is now called Authorizing a Representative Web service
  • CRA now aaccepts prior year returns for the 2016, 2017 and 2018 tax years

Filed Your Return? Here’s What You Need to Know

With taxes due on April 30th at midnight, many Canadians have already filed their taxes and are ready to make any payments for balances owing to the CRA for the 2018 tax year. Here is some information that you need to know if you have already filed your return.

Getting a Refund

If you overpaid your taxes, you will be entitled to a refund! If you are receiving a refund then you can expect it in 2 weeks when you file online and 8 weeks when you file through mail. If you are set up for direct deposit you can receive your refund faster. If you have overpaid your taxes and have not received your refund 31 days after the date you paid, you may be entitled to interest on your refund!

Notice of Assessment or Reassessment

Your notice of assessment indicates whether you have any balance owing, refund, or zero balance. The notice of assessment also indicate You can receive your notice of assessment after your file your return. If you are filing online, you can receive your Notice of Assessment online in two weeks. If you are filing your return by mail, you can expect your Notice of Assessment in eight weeks.

If you are receiving a Notice of Reassessment, do not panic. A Notice of Reassessment simply states that changes were made by the CRA to your return. You may also receive a notice of reassessment if you have made an adjustment to your return after filing. If you receive a Notice of Reassessment, you will have 90 days to file a Notice of Objection.

Request for Information

A request for information is when the CRA asks for information regarding something that has appeared on your return. This is not an audit, but a simple record check. Remember to keep records for returns for up to six years after filing the return so that you have the proof to provide for this request. You can submit receipts online through your My Account if you have electronic copies of your records.

Paying Your Taxes

When you have to pay a balance owing, you have several options as to how you can pay that amount. You can set up online payments to the CRA with any major financial institution. Here are the options you have to pay your balance owing.

    Paying in Person

    You can pay in person by visiting a Canada Post location and paying using a Quick-Response code. You can also hand in a copy of your return to your closest tax centre. Information about your closest Tax Centre can be found on the Canada Revenue Agency website.

    Cheque or Money Order

    These forms of payments can be made out to the Receiver General of Canada. The cheque should be mailed to the address on the back of your remittance voucher and sent with the remittance voucher alongside the cheque or money order. If you do not have a remittance voucher, you can find details on where to send your cheque from the Canada Revenue Agency website.

    Debit or Credit

    Individuals who are using a Debit Mastercard, VISA debit, or interac can use My Payment to pay their amount owing. My Payment is a service that allows you to directly pay amounts owing to the CRA directly to them using your bank access card.

    Pre-Authorized Debit

    Pre-authorized debit or PAD allows you to set up a payment amount and give the CRA permission to withdraw the amount from your bank account on a predetermined date. Be aware that to use this option, the payment date must be five business days from the day you create the agreement. Therefore, taxpayers attempting to use PAD will not be able to get their payment in on time unless the agreement was created before April 24th.

    Trouble Paying?

    If you are unable to pay your return in full, you can arrange to make payments to the CRA over time to pay your balance owing. In certain circumstances, you may also request relief from interest or penalties from the CRA. It is advised that you contact the CRA as soon as possible in order to inform them of your situation and avoid increasing the interest and penalties on your balance owing.

File On Time!

It is important to remember that payment through third parties is not immediate and therefore may require a certain number of business days for the CRA to receive the payment. Therefore, ensure that your payment will make it to the CRA before the deadline or you may be liable for a late filing penalty.

Haven’t filed your taxes yet? Visit one of our locations and have a professional file your return before April 30th. Our professionals will ensure that you claim all the necessary credits and deductions so you pay the least amount of tax. You can also download our TaxTron software to file your return online!

Ontario Budget 2019

Premier Doug Ford’s government released their first provincial budget today along with a new license plate and slogan for Ontario citing “A PLACE TO GROW”. The government has offered new tax credits, less regulations, cuts to government programs, and a new transit plan. Here’s some of the main points discussed in Ontario’s 2019 budget.

CARE Tax Credit

The Childcare Access and Relief from Expenses (CARE) tax credit will be introduced in Ontario to provide support for low income families in paying their childcare expenses. Families can receive up to $6000 per child under age 7, up to $3750 per child between the ages of 7 and 16, and up to $8250 for a child with a severe disability. Although the tax credit would primarily help low income households, the credit will also provide relief for households with income up to $150,000. The government is also allocating $1 billion over five years to increasing childcare spaces in Ontario.

Business Tax Credit

The government has offered a tax credit to businesses to allow them to write their capital expenses off immediately. The credit comes as an alternative to their plan to reduce the corporate tax rate. The purpose of this offering is to give companies an incentive to spend money as opposed to keeping profits.

Transit

$28.5 million will be allocated to a transit plan for the Greater Toronto Area which will include an increase in subway lines and regional rail transit. The plan includes the “Ontario Line”, which will be the new subway line connecting the Ontario Science Centre to Ontario Place.

Auto Insurance

The government is also proposing to reduce auto insurance rates by providing flexible options for providing insurance to drivers. The government is planning on implementing these changes over several years so that rates are more entwined with the driver’s history. They are also looking to allow electronic proof of insurance along with a new “Driver Care Card” for receiving benefits from claims. The province is also increasing the maximum benefit which can be claimed from $1 million to $2 million.

Dental Care for Seniors

$90 million will be allocated to assist low income seniors in getting dental care. Seniors with annual income below $19,300 or couples with combined income less than $32,300 will qualify for dental care this summer. This initiative will be implemented to give seniors greater access to dental care. According to the report, seniors were one of the most under represented groups to make regular dental check-ups.

Alcohol and Gambling

The government has also outlined it’s plans to decrease regulation in regards to gambling and alcohol sales. The government is proposing legislation to allow for drinking in parks, tailgating events, and to allow liquor sales in restaurants at 9am, 7 days a week. The government also is looking to allow private companies to participate in online casino style gambling.

The government is also planning on gradually decreasing the deficit and leading up to a surplus by 2024. The approach will involve reducing the amount of debt year by year and increasing the province’s debt to GDP ratio. The Finance Minister has stated that the approach is a “Goldilocks Approach” because the changes have to be just right in their implementation.

Overall, the changes introduced in the budget are of a large scope and are appealing to a large demographic. Seniors to millennials, low-income earners to high-income earners, and all people in between can expect one of these offerings to affect them in one way or another in the upcoming year.

Sound Too Good to Be True? It May Be a Tax Scheme

Did you know that between 2006 and 2017, 75 tax scheme promoters were convicted of crimes relating to tax schemes. The total of fines resulting from these prosecutions amounted to a total of 7.15 million and resulted in a total of 936 months of jail time for those convicted.
Tax schemes are promoted heavily during tax season and taxpayers need to have the facts regarding tax schemes in order to avoid them.

What is a Tax Scheme?

A tax scheme can be an individual or an organization that is deceiving a taxpayer into believing that they will be able to pay less taxes through unreasonably large deductions or that they will be able to receive an unusually large refund. Tax schemes often use illegal methods to get clients larger refunds and. When faced with a tax preparer who is promising an unusually large refund, be cautious.

What Should You Look Out For?

Beware of tax promoters that are promoting a return that is much higher than the initial investment towards it. Returns that are grossly disproportionate to the amount of money that is actually paid should be a red flag that there is something suspicious going on. You should also be cautious if the promoter is discouraging you from speaking to the CRA or getting a second opinion from another tax professional.

Common Schemes

A common scheme which resulted in billions of dollars in deductions being cancelled was the Charity Tax Shelter scheme which convinced Canadians that they could claim an amount equal to or greater than their charitable donation when filing their tax return. Donations paid to charities are only eligible to have a portion of the amount deducted. Charities must be registered with the CRA in order to issue official donation receipts and the CRA closely monitors charities and tax shelters to detect abuse of privileges. As a rule of thumb, donations for the purpose of only deducting taxable income are looked down upon by authorities and should be avoided.

Another common scheme involves promoters convincing unemployed individuals that they are eligible for the working income tax benefit(WITB) even if they have not worked during the year. The WITB is only available to low income individuals and families that have worked during the tax year. Schemes of these sorts take valuable tax dollars away from social programs and facilities for Canadians. The CRA takes participation in these schemes very seriously and invests large amounts of money towards preventing these schemes.

You Can Be Held Liable

Being a willing participant in a tax scheme can lead to serious consequences. If you knowingly participate in a tax scheme you can be prosecuted or penalized by the CRA to pay additional fees on top of the fees paid to a tax scheme.

Taxpayers that have knowingly participated in a tax scheme can visit the Voluntary Disclosures Program in order to disclose their information and fix their tax return. Disclosing involvement through the Voluntary Disclosures Program would allow for relief from prosecution in certain cases and limit the amount of penalties.

Be cautious of promoters that promise outrageous claims and practice due diligence in choosing a tax representative. Softron Tax has been a trusted tax preparation company for over 30 years. Visit one of our locations and have one of our friendly staff file your return for you today!