Tackling the “Nobody Knows” Myth

A lot of times we have wondered if you need to report an income, or sale or property or an asset on your tax return. Also, a lot of times we have turned to that know it all co—worker or family friend for advice. Unfortunately, a lot of times, the advice is that the government won’t know about it and you do not need to report it.

Well, it general ends badly and let me tell you something: Government knows!

Let’s discuss a few reporting myths:

  • Sale of your house: If you sold your house, it must be reported to the Canada Revenue Agency. The rules changed in 2016. Failure to report can make you liable for penalties up to $8,000. So yes, it’s always better to discuss with an expert rather than just getting some friendly advice from your peers. And yes, the government knows as all transactions are made through a financial institution and recorded at the land registry office as well. The tax liability on the sale will depend on a few factors such as:
    • Did you maintain the house as principle residence for all years of ownership?
    • Did you rent it or use it as a home office? If yes, what percentage of the house was being used for these purposes?
  • Foreign Property: If you own property that is valued at more than $100,000, you are required to report it to on your tax return by filing form T1135. There may be no tax liabilities to reporting the property but failure to report will result in penalties of $2500 per year. So, suppose you bought a piece of land abroad for $100,000 10 years ago. You sell the land for $150,000 and bring the funds to Canada. The government at this point will review your transactions and failure to report the land for last 10 years will cost you $25,000.
  • Earnings from digital currency: The digital currency exchanges are not regulated and therefore no tax slips are issued but eventually all funds get transferred to Canadian dollars and can be tracked. Any gains made from digital currencies should be reported and appropriate tax should be paid.
  • Reporting inflated expenses: The government regularly audits the returns with self employment income or employment expenses. You may be tempted to play the audit lottery, but the government has recently substantially increased their efforts to audit a higher a number of tax returns and if you get audited ever, there is no chance that inflated expenses will escape the eye of an auditor.

Get help from professionals such as tax experts at Softron and ensure that your taxes are done right the first time. Call 905-273-4444 today and let the best handle your taxes.

Tax Credits you will miss!

2017 Tax year will be remembered as a tax year of lost tax credits. Significant changes have been made to tax rules and a lot of credits that helped individuals and families are no longer available.

The following credits that you may claimed on your earlier tax returns are no longer available:

Public Transit Credit
The public transit credit was discontinued starting 1st July,2017. So, when you file the 2017 tax return, only transit expenses made in the first half of the year will be eligible and this credit is gone for the future years. This will have big impact on people who reside in big urban centres like Greater Toronto Area and spend significant amount of money on public transit every month.

Caregiver Amount for Parents
For many years, if you were taking care of your senior parents who lived in your house, you could have claimed a caregiver amount as a tax credit for them. The old care giver amount has been now discontinued and can only be claimed for parents who have a disability and are approved for disability tax credit. This will hugely impact families who support their senior parents.

Arts and Fitness Credits Credit for Children
The arts credit for children which allowed parents to claim expenses made for arts activities such as piano lessons and fitness activities such as soccer and swimming lessons. This tax credit was helping a lot of families with children.

Major Change Tuition, Textbook and Education Amounts
The federal textbook and education amounts have been discontinued for the year 2017. Ontario has not only discontinued textbook and education amounts, but also the tuition amounts starting Sep 4, 2017. The tuition is being waived off for students whose parents make less than $50,000. But Ontario has a lot of international students that typically pay around $15000 per year in tuition fees. This will have a big impact of middles class parents as well who were helping their children with tuition costs and could claim a tuition transfer on their tax returns in return.

While we cannot change the tax rules, it is always wise to work with a tax professional who can plan your taxes effectively in an environment of changing laws that do not favor the tax payers in many cases.

Call 905-273-444 today and let the best handle your taxes!

2016 Taxes: What’s New and What’s Gone

tax-man

As the holidays are over and the reality of work and finances strikes, everybody is starting to gather their receipts and slips and prepare for filing the 2016 taxes.

We at Softron Tax are excited as ever too to help our clients save tax dollars. The government pushed an agenda to reduce taxes for the middle class. Today we discuss the changes below and you can decide whether the middle class is better off or not.

What’s In

Crediting the Teachers – School Supply Tax Credit

Starting 2016, qualified teachers which means teachers who have teacher’s certificate or early childhood educators can claim up to $1,000 for school supply expenses. So, make sure you bring all the receipts to your Softron tax expert when you file taxes this year.

• Canada Child Benefit

Although you have been receiving Canada Child Benefit since July 2016, you will be happy to know that all the payments are non-taxable. So, that will result in some tax savings as the only taxable benefits that you will need to report on your tax return will be Universal Child Care Benefit payments received from January 2016 to June 2016.

• Lower Middle Class Tax Bracket

The federal tax bracket for income between $45,282 to $90,563 has been reduced from 22% to 20.5%. This change also comes with a change in tax bracket for income more than $200,000 which has been increased from 29% to 33%. So, if an individual makes higher than $45,282 but less than $200,000, he will benefit from these changes

What’s Out


• Income Splitting

Families with children will no longer be allowed Income splitting on their tax returns. Earlier if one spouse was earing a higher tax bracket income than the other spouse, the couple could save up to $2,000 in taxes with income splitting.

• Children’s Art and Fitness Amounts

The children’s art and fitness amounts have been cut into half for the year 2016 and will be eliminated for the year 2017. The maximum amount that could be claimed for fitness is $500 and $250 for arts activities for the year 2016
So, families that were benefitting from income splitting may pay more in taxes this year and individuals who made less than $45,282 will not see any benefit of middle-class tax cuts.
On the hand, most families are enjoying higher Canada Child Benefit payments and the icing on the cake is that these payments are non-taxable as opposed to the old Universal Child Care Benefit payments.

So gear up and come to Softron Tax and we will find you the biggest tax refund this year too !!

Softron’s Brampton Tax Service offers the fastest and biggest refunds !

We are halfway into our tax season. Softron Tax has been proudly serving it’s Brampton customers for past 30 years. Like all other years, Softron has not only met but exceeded expectations of it’s Brampton clients in getting them the biggest refund this year as well. Thousands of tax payers have already visited our Brampton Tax office and collected their refund cheques in less than an hour.

So file your taxes today at a Brampton Softron Tax location and to make it simple for you, here’s a checklist of what to bring to your Softron Tax professional when you come to file your taxes in Brampton:

  • T4 slips for all employers you worked for in 2015.
  • T3 and T5 investment slips that you received from your financial institutions.
  • Other T slips if any like slips issued for unemployment or social assistance.
  • RRSP contribution receipts
  • Donation slips
  • Receipts for money donated to political parties
  • Receipts of money paid for fitness activities of children.
  • Receipts of money paid for arts’ activities of children.
  • Transit expenses
  • Tuition Receipts
  • Rent Receipts

You can also discuss with your tax professional if you bought a new house or if someone is suffering from a disability in your family.

We also have exceptional debt counseling experts at the Bramlea Tax Office who can help you with all the debt problems.

So call today at 905-796-5555 or visit www.softrontax.com/location to find your nearest Brampton office.

You can visit Softron at following Brampton locations:

  • Shoppers World Brampton –499 Main Street South, Brampton, ON
  • Bramlea City Centre-  25 Peel Centre Dr. #359 , Brampton, ON
  • Queen street- Brampton- 253 Queen st East, Brampton, ON L6W 2B8

Seniors and Children take all the goodies in Trudeau’s Federal Budget

The 2016 Federal budget is out and major changes have been announced to benefits and tax credits of Canadian taxpayers. Children and senior citizens that get the biggest slice of the cake in the first federal budget of liberal government.

Let’s have a that who gets what in this budget:

Seniors- The big winners:

  • The eligibility age for Old Age Security will be fixed at 65 and will not move up to 67 as proposed by the earlier government.
  • Single seniors may be eligible for another GIS supplement of up $947 per year to cover the living costs. This will about a million senior citizens in Canada
  • Additional GIS supplement will now be available to those senior couples as well who are living apart. This will only be allowed in cases where the couple is apart because of medical reasons such as a case where one partner requires long term care.

Families- You won some, you lost some

  • Canada Child Benefit – The maximum Canada child benefit will be $6400 annually for a child under 6 years of age and $5400 for children between 6 and 17 years of age.  Families with annual income lower than $140,000 will benefit with this new plan.
  • Fitness and Arts Credit- The two credits will be phased out over two years starting this year. The credits will be halved this year and will be eliminated in 2016.

Students- Easy on Debt and Hard on Tax Credits

  • The students who graduate will not have to start repayment of their loans until they start making at least $25,000.
  • The education and text book credit will be eliminated starting 2017. These credits amounted up to $5,580 in tax credits for students who were going to school full time up to 8 months a year.
  • The Canada Student Grant has been increased by 50% for all levels of income.

Teachers- Yes you have a tax credit too !

  • The teachers will be finally able to expense up to $1000 for money they spend on school supplies from their own pockets.