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Monthly Archives: March 2014

Odette Morin

Bragging about your tax cheats is now risky business

Terry and I were at a dinner recently and someone in business at our table was bragging about the meals and entertainment and car expenses he was fully deducting.  It was clear that not all of these should be deducted and of course the chances of him being caught are very slim as very few tax returns are actually verified.  That is unless someone calls CRA’s new snitch line.

Tax slackers beware. Tax tips took on new meaning this year when the Canada Revenue Agency’s “snitch line” went live. Informants can use it to report tax evaders.  There is even a finder’s fees of 5% to 15% of tax collected if a tip brings in $100,000 more than the CRA could find on its own. So play safe.  There is enough legitimate deductions to reduce your taxes anyway.  Get a good accountant or talk to us.  We provide sound tax tax advice with your tax preparation.

 

Odette Morin

When will interest rates go up?

Federal Reserve chairwoman Janet Yellen caught markets unaware last week when she said that the Fed could start increasing rates from near zero about six months after the end of its bond buying program. But analysts say markets are getting increasingly used to the idea of rates going up.

“After the last Fed meeting, I think it was pretty evident there was a possibility that you may see rates go up quicker than people might have anticipated,” said Sadiq Adatia, chief investment officer of Sun Life Global Investment.  “So I think people are bracing themselves for potentially a rate hike in 2015, maybe a bit earlier than what was initially planned.”

Don’t be fooled.  Even if we have been singing this tune for 2 + years, now that the economy is clearly improving, the rate hikes are coming.  Take this opportunity to review what you owe, pay down as much as you can while rates are still low and plan for the upcoming higher rates payments. We will review this event next time we meet and see how it will impact you. Make sure to come in for your annual review.

interestrates

Odette Morin

PayDay loans, a very very bad way to borrow

PayDay loans should never ever be used. They are  beyond unbelievably expensive and the worse way to borrow.

In the US, and I am sure the statistics are close for Canada, about half of all payday loans are made to people who extend the loans so many times they end up paying more in fees than the original amount they borrowed, a report by a federal watchdog has found.

The report released Tuesday by the Consumer Financial Protection Bureau also shows that four of five payday loans are extended, or “rolled over,” within 14 days. Additional fees are charged when loans are rolled over.

Don’t ever consider these loans as a solution.  They will only make matters worse, way way worse.

PaydayLoan

Odette Morin

How to take the bite out of tax time

Most of you know our little pet, Amy Lou. She weighs 7 pounds and stands no more than a foot tall. Yet, despite her stature, she guards our workplace fiercely.

After all, there’s just no office more important.

I realized as she was barking at someone today that we’re similar – and no, not because of her bark! You see, we both protect what matters to us. In my case, it’s my clients. And, while I don’t bark, I do ask a lot of questions particularly at tax time.

The reason for this is two-fold. For one, I want to maximize all the opportunities and deductions available to you. I also want to insulate you from preventable predicaments with the Canadian Revenue Agency.

That’s where my protective nature comes in, as does that of our entire team.

By asking a lot of questions and requesting documentation to justify the figures presented, we can ensure that you’re very well armed for a CRA review or assessment – which have become more frequent.

It used to be that people would file their returns, documents in tact, via regular mail. However, all that’s changed. Nowadays, returns tend to be filed electronically and don’t include documentation. As such, random checks have become more commonplace.

By the way, should you be picked, don’t panic. It’s not an audit. In addition, by managing your returns as thoroughly as we do, we’re in a good position to help you present what the CRA requires in due time and in the best way.

If you’ve been thinking, “that Odette (or that Terry, or that Anthony) is like a dog with a bone!” now you know why. So please be sure to complete our helpful tax return checklists and have all your documents organized.

AmyLou

 

 

 

 

 

Odette Morin

Attention border crossers! New border rules starting June 30th.

Canada and the U.S. are implementing new border rules.  Officials will now track every entry and exit.

Starting June 30, Canada and the U.S. will scan travellers’ passports as they enter and exit the country. Before, the countries only scanned passports upon a traveller’s entry.

If you are a snowbird or frequent border crosser who  is  used to estimating the number of days spent inside the U.S., this could have serious consequences for your tax return. Now officials will be able to check dates for themselves.

Canadians can spend a maximum 183 days in the U.S. before being considered a U.S. resident, and have to pay tax on their global income. Those spending more time down south may also lose their Canadian residency status and have to pay tax as though they had sold all their assets.

Please also note that even if you only spend a few minutes in the US, to gas up for example, this counts as one day.  Therefore, many will have to curtail their too frequent day trips.

Read more

Border crossing

Odette Morin

7 tips in completing your tax return

Jamie Golombek, CIBC’s managing director, tax and estate planning has some great tips for you to avoid costly errors:

  1. Double-check that you’ve included all income from all sources;
  2. Compare information on tax slips to investment statements or other supporting documents to ensure accuracy;
  3. If you’re missing information, do your best to get it; estimate amounts when information doesn’t arrive in time to file;
  4. Report all RRSP contributions, even if you’re going to claim the deduction in a later year;
  5. Determine if you are eligible for a deduction or credit before you claim it;
  6. Make sure your current address is on file with employers, financial institutions and the CRA so that you receive all tax slips and correspondence;
  7. Be punctual – file your return by the deadline, which is April 30, 2014 for most taxpayers, and respond to any direct CRA correspondence within the required timeframe.  There is a 5% penalty for filing late   plus interests.  T1form