TaxBreak

From the Desk of Andy Wong

TaxBreak is a weekly article written by Andy Wong to help individuals with both their personal and business taxes.

Nasty Traps for Not For Profit Organizations

This oversight happens all too often.

You are a director of an incorporated not-for-profit organization (NPO), such as a society, chamber of commerce organization, a condominium board or say, the Yellowknife Climbing Club.  You think your  NPO has no tax filing obligations because it is tax-exempt That isn’t true and you could be in for some nasty tax surprises. Read more

Posted in Uncategorized

GET SOME RESPect

The best way to pay for your child’s post-secondary education is funding a Registered Education Savings Plan (RESP).

This federal program was created in 1974 to entice parents to save for their children’s education. The program had two nifty tax features – tax deferral and income splitting. You achieve tax deferral because taxes are not paid on investment income earned in an RESP until it is withdrawn down the road. And you get income splitting because the income is taxable to your child even though you funded the plan. Read more

Posted in Uncategorized

Why me?

 

I am sure you heard the lamenting, “My northern residency claim has been audited every year…”. Perhaps, your tax claim had been selected for a review in the past. So, why you? Read more

Posted in CRA

New voluntary disclosure rules

To borrow shamelessly from Bob Dylan, ‘The times they are a changin’. There is a new look coming to the Voluntary Disclosure Program and it is not a prettier picture.

Let’s brush up on your tax responsibilities first. Our tax laws expect you to file, and report (all) of your worldwide income. And on time. You can be hit with a ton of penalties if you fail to meet either obligation. Read more

Posted in Uncategorized

Tax Changes for 2017

Heads up, here are some changes appearing on your 2017 tax return, and more.

The federal or territorial tax rates remains the changes, compared to 2016. The 2017 tax brackets were increased for inflation, meaning, your take-home pay increased slightly to give you the same buying power, as compared to 2016.     Read more

Posted in Uncategorized

Lowest Return Airfare alternative?

The Lowest Return Airfare is an annual conundrum.

The Canada Revenue Agency is finally taking this issue seriously. In a new report titled “Servicing You Better”, released this October, the CRA promised to “explore options that can help taxpayers identify the Lowest Return Airfare”.

Read more

Posted in Uncategorized

The Lowest Return Airfare chaos

I know this is your perennial thorn-in-the-side tax filing question -what is the Lowest Return Airfare? There is a reason you keep asking.

Here is the backstory.You qualify for a travel deduction if you received a Box 32 travel benefit from your employer, and have lived in the northern parts of Canada for at least six months at the time you file your tax return. The deduction allows you to claim the least of three amounts the Box 32 benefit, your trip expenses, or the Lowest Return Airfare.

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Posted in Uncategorized

The CRA will serve you better

This year marked my 31st anniversary as a tax accountant, having started my first day on the job in the fall of 1986. That period turned out to be an opportune time to cut my teeth. We had to deal with the spanking new northern residents deduction in 1987. You can say I got in on the ground floor with this exigent deduction.

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Posted in Uncategorized

Bucket List – Leaving For China

Taxbreak is taking a break – for now. By the time you read this, I will be making my way to China on a three-month journey. I landed an exciting gig teaching accounting at ten universities throughout China.

This working holiday is not for the faint of heart. There are twelve hours of lecture spread over the first two days. I hustle to the next city on Day 3. Day 4 is a chance for rest and to impose my awful Mandarin on the Chinese. After that, it is back on the road until I am through all ten universities.

This leaves me with a question. What should I write about on this final column? Why not about the Canada Revenue Agency?

The CRA has two goals; 1) get Canadians to obey the tax laws, and 2) to be a leading edge service-provider. I believe the agency scores high on both fronts, granted I have had my share of scraps with the agency’s staff over the years.

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Posted in Uncategorized

Dealing with your travel audit

During late week of August, I marveled at a flock of honking geese headed south while I was on the shores of Prelude Lake, about 35 kilometers from Yellowknife. This migration seemed early; perhaps because their breeding site is now overpopulated with matured chicks. Or perhaps it’s to avoid the hunting season that starts this month.

Sadly, the Canada Revenue Agency’s audit of our travel deduction is unavoidable. If you are selected, responding to the CRA’s long list of supporting paperwork is no small chore. And this assumes you understand what is being asked for.

Here is the confounding list, and your audit letter may contain some or all of them.

Read more

Posted in Uncategorized