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!

Know your Tax Credits

Today we discuss the tax credits that you should be discussing with your accountant before you finalize your 2016 taxes. The rule is simple. The more you know about tax credits means that discuss more with your tax professional and thus pay less in taxes.

Here are the credits that you may be eligible to claim this tax season:

Moving Expenses

If you moved this year for a new job, make sure tor take a record of all your expenses to your accountant as he can claim moving expenses on your tax return.

Medical Expenses:

While it is common knowledge that Canadian taxpayers can claim medical expenses on their returns but it is important to know what expenses you can claim. A lot of people miss out on the travellers’ medical insurance that they buy when travelling abroad.

You can also claim expenses incurred on fertility treatments that are otherwise not covered by any insurance plan.

Home Renovation Expenses for Seniors and People with Disability:

If you are a senior or already approved for disability tax credit, you can claim any expenses incurred for increasing the accessibility in your house. This includes expenses like stair lifts.

Credits for Teachers

Starting 2016, teachers can claim expenses incurred on supplies for school up to $1000. So, if you are a certified teacher or early childhood educator, make sure you take advantage of this tax credit.

We at Softron, have trained our professional staff to ensure that we do not miss any tax credits for all our clients. It is always more expensive to miss out on tax credits than paying a professional who can save you the most on taxes

Call 905-273-4444 or visit www.softrontax.com/location to finalize your taxes.

Taxes for Parents: Save on taxes today and gift your child a better tomorrow !

March break is here and a lot of parents will be filing their taxes for the year 2015. The living costs for families are increasing across Canada and it is becoming increasingly difficult to save and invest for the future of children.

The 2015 taxes provide unique opportunities for parents where they can claim tax credits for a lot of money spent on children and save big on taxes. These savings can translate into a better future for your children.

The following expenses must be claimed by each parent while filing their taxes:

Child care Costs: Day care costs can be big for working parents but you can claim up to $8,000 for children under 6 years of age and $5,000 for children between 6 and 16 years of age. In case of a disabled child, the day care costs can be claimed up to $11,000. You can not only claim the money you spent at a day care but also the money you spent for summer camps for your children.

Fitness Expenses– An active child is a blessing and he can also save you a lot on your taxes. You can claim up to $1000 per child on money spent for fitness activities like soccer, swimming and dance classes

Arts Activity Costs– Save big on taxes if you have an artist in the house. Parents can claim up to $500 for each child for money spent of arts’ activities like music and piano lessons.

Tuition Designations– It is a common myth that once your child is in college and 18 years of age, there is no benefit a parent can claim. If your child is paying the tuition fee for a university or a college, he/she can designate their tuition amount of up to $5000 to their parents which can translate into more than $1000 in tax savings.

Medical Expenses- Did you get those expensive braces for your child this year? No problem. Parents can claim a tax credit for the medical expenses they pay for their children and get huge returns when filing taxes.

All you need to do is visit a tax expert like professionals at Softron Tax who can really guide you and ensure that you save every penny you deserve on taxes. A saving in taxes today will help you immensely in building the future of your children.

Let’s save on taxes by doing it right !

Tax season is back! Are you Ready?

The tax season is back and like every year in the past, Softron tax is ready to serve you and get you the biggest refunds.

So are you ready?

Each year taxpayers miss out on a lot of money that they could have received through their tax refund. This happens because taxpayers miss out on claiming important credits that they are eligible for. Today we discuss the credits that every taxpayer in Canada can claim irrespective of his/her marital status, number of dependents or age.

Following are the credits that every taxpayer maybe eligible for:

  • Public Transit passes: Every taxpayer can claim their public transit passes and receive additional tax refund. The only check in the case of public transit passes is that the taxpayer must have either monthly passes or three consecutive weekly passes or presto usage report. It is not possible to claim just a few tokens or randomly bought tickets.
  • Donations: Every taxpayer can claim the donations they make to eligible charitable organizations in Canada. All you need is a donation receipt. That’s not all. If you have missed claiming your donations in the past 5 years, you can claim them altogether in the present tax year and this will only increase your donation credit. So help yourself while you are trying to help others.
  • Political Contributions: 2015 was the election year and a lot of you will be surprised to know that you can claim the political contributions you made during the year. Political contributions can be either federal or provincial and this is important as contributions made to a provincial political party qualify for a refundable tax credit while the contributions made to a federal political party qualify for non-refundable tax credit.
  • Medical Expenses: If you have had any major medical expenses (dental, eye surgery, prescriptions) where you had to pay a lot out of your pocket, you can claim those medical expenses and reduce your tax payable. The medical expenses have to be more than 3% of your income.
  • Rent: While the rent has no impact on an individual’s taxes, rent can be claimed for availing Ontario’s Rent and Property Tax Grant which is part of Ontario’s Trillium Benefit. There can be cases where the taxpayer will not benefit from the rent because the income he made during the year is above the threshold limit but it is important that the rent is discussed with the tax preparer and it is ensured that maximum benefit is claimed.

The professionals at Softron Tax are very competent to get you all the tax credits that you are eligible for but more importantly, we at Softron have a work ethic and an attitude to use all our competence and ability to get the maximum benefit for our customers.

So visit your nearest Softron Tax location and get the tax credits you deserve!