Laura Marcato

Beginning 2019 and subsequent tax years, non-accountable allowances paid to elected members, certain municipal officers and members of school boards will be fully included in income.

Prior to 2019, an exemption is available to certain individuals for a non-accountable allowance that is paid to cover expenses connected with carrying out work-related duties. This non-accountable allowance is excluded from income unless it exceeds one-half of the individual’s salary and other remuneration.

Changes for employers

Currently, in order to complete the employee’s T4 slip, an employer must identify both the taxable and exempt share of the allowance when a non-accountable allowance is paid to elected members of legislative assemblies, certain municipal officers and certain other individuals. The amounts are distinguished because only the taxable share is reported in box 14, “Employment income,” and subject to income tax and Canada Pension Plan (CPP) deductions at source.

For 2019 and subsequent tax years, the full amount of the allowance will be included in box 14 and subject to income tax and CPP deductions at source. Generally, amounts paid to elected or appointed officials are not subject to employment insurance premiums.

You may have to register with the government before you start operating your business.

Before you register

Before you register your business, you will need to know:

• where your main office will be located
• which other provinces and territories you plan to operate in
• your proposed business name (see Choosing a name)
• the type of business that best suits your needs (see sole proprietorship, partnership, corporation or co-operative for help determining which structure is right for you).

Choose your business type

To learn about your registration requirements and start the registration process, choose your planned business type:

• Corporation (federal or provincial/territorial)
• Sole proprietorship or partnership
• Cooperative

Get help with business registration

If you need help figuring out the business registration process you can contact the Canada Business Network’s offices in your region or our office at 780-482-3431 ext. 304.

• Contact the Canada Business Network

Know how to recognize a scam

There are many types of fraud, including new ones invented daily.

These scams may insist that this personal information is needed so that the taxpayer can receive a refund or a benefit payment. Cases of fraudulent communication could also involve threatening or coercive language to scare individuals into paying fictitious debt to the CRA. Other communications urge taxpayers to visit a fake CRA website where the taxpayer is then asked to verify their identity by entering personal information. These are scams and taxpayers should never respond to these fraudulent communications or click on any of the links provided.

To identify communications not from the CRA, be aware of these guidelines.

If you receive a call saying you owe money to the CRA, you can contact the CRA directly at this link or check My Account to be sure.

If you have signed up for online mail (available through My Account, My Business Account, and Represent a Client), the CRA will do the following:

• send a registration confirmation email to the address you provided for online mail service for an individual or a business; and
• send an email to the address you provided to notify you when new online mail is available to view in the CRA’s secure online services portal.

The CRA will not do the following:

• send email with a link and ask you to divulge personal or financial information;
• ask for personal information of any kind by email or text message.
• request payments by prepaid credit cards.
• give taxpayer information to another person, unless formal authorization is provided by the taxpayer.
• leave personal information on an answering machine.

• When in doubt, ask yourself the following:

  • Did I sign up to receive online mail through My Account, My Business Account, or Represent a Client?
  • Did I provide my email address on my income tax and benefit return to receive mail online?
  • Am I expecting more money from the CRA?
  • Does this sound too good to be true?
  • Is the requester asking for information I would not provide in my tax return?
  • Is the requester asking for information I know the CRA already has on file for me?

  If you do have a debt with the CRA and can’t pay in full, take action right away. For more information, go to When you owe money – collections at the CRA.

  How to protect yourself from identity theft

  • Never provide personal information through the Internet or by email. The CRA does not ask you to provide personal information by email.
  • Be suspicious if you are ever asked to pay taxes or fees to the CRA on lottery or sweepstakes winnings. You do not have to pay taxes or fees on these types of winnings. These requests are scams.
  • Keep your access codes, user ID, passwords, and PINs secret.
  • Keep your address current with all government departments and agencies.
  • Before supporting any charity, use the CRA website at www.cra.gc.ca/charities to find out if the charity is registered and get more information on the way it does business.
  • Be careful before you click on links in any email you receive. Some criminals may be using a technique known as phishing to steal your personal information when you click on the link.
  • Caller ID is a useful function. However, the information displayed can be altered by criminals. Never use only the displayed information to confirm the identity of the caller whether it be an individual, a company or a government entity.
  • Protect your social insurance number. Don’t use it as a piece of ID and never reveal it to anyone unless you are certain the person asking for it is legally entitled to that information. If an organization asks for your social insurance number, ask if it is legally required to collect it, and if not, offer other forms of ID.
  • Pay attention to your billing cycle and ask about any missing account statements or suspicious transactions.
  • Shred unwanted documents or store them in a secure place. Make sure that documents with your name and SIN are secure.
  • Immediately report lost or stolen credit or debit cards.
  • Carry only the ID you need.
  • Do not write down any passwords or carry them with you.
  • Ask a trusted neighbour to pick up your mail when you are away or ask that a hold be placed on delivery.

  Have you been a victim?

  You should report deceptive telemarketing to the Canadian Anti-Fraud Centre online or by calling 1-888-495-8501.

  If you suspect you may be the victim of fraud or have been tricked into giving personal or financial information, contact your local police service.

  If the CRA has confirmed that a taxpayer’s information has been compromised, the Agency will act to prevent the fraudulent use of the information involving systems and processes for which the CRA is responsible.

  If your social insurance number (SIN) has been stolen, you should contact Service Canada at 1-800-206-7218. For more information, see Social Insurance Number (Service Canada website).

  You can ask the CRA to disable online access to your information on the CRA login services by contacting them directly. After access to your information is disabled, you may change your mind and want access again. If so, you can contact them directly again and ask that your access be re-activated.

Advising over 25 Quickbooks online clients, our Firm is fully trained and staffed to assist with Quickbooks online clients.

We have recently received the Quickbooks Platinium Proadvisor Certification.

If you are looking for an accountant to assist you with your Quickbooks Online company, we are here to help and we offer a free consultation.  Contact us directly at [email protected] to discuss your needs.

 

 

When you decide to start your own business, you need to determine what type of business structure best suits your needs. There are three types of business structures:

Sole proprietorship

With this type of business organization, you are the sole owner, and fully responsible for all debts and obligations related to your business. All profits are yours to keep. Because you are personally liable, a creditor can make a claim against your personal assets as well as your business assets in order to satisfy any debts.

Advantages:

• Easy and inexpensive to register
• Regulatory burden is generally light
• You have direct control of decision making
• Minimal working capital required for start-up
• Some tax advantages if your business is not doing well (for example, deducting your losses from your personal income, and a lower tax bracket when profits are low)
• All profits go to you directly

Disadvantages:

• Unlimited liability (if you have business debts, claims can be made against your personal assets to pay them off)
• Income is taxable at your personal rate and, if your business is profitable, this could put you in a higher tax bracket
• Lack of continuity for your business if you are unavailable
• Can be difficult to raise capital on your own

Partnership

A partnership is a non-incorporated business that is created between two or more people. In a partnership, your financial resources are combined with those of your business partner(s), and put into the business. You and your partner(s) would then share in the profits of the business according to any legal agreement you have drawn up.

In a general partnership, each partner is jointly liable for the debts of the partnership. In a limited partnership, a person can contribute to the business without being involved in its operations. A limited liability partnership is usually only available to a group of professionals, such as lawyers, accountants or doctors.

When establishing a partnership, you should have a partnership agreement in place. This is important because it establishes the terms of the partnership and can help you avoid disputes later on. Hiring a lawyer or other legal professional to help you draw up a partnership agreement will save you time and protect your interests.

Advantages:

• Fairly easy and inexpensive to form a partnership
• Start-up costs are shared equally with you and your partner(s)
• Equal share in the management, profits and assets
• Tax advantage — if income from the partnership is low or loses money (you and your partner(s) include your shares of the partnership in your individual tax returns)

Disadvantages:

• There is no legal difference between you and your business
• Unlimited liability (if you have business debts, personal assets can be used to pay off the debt)
• Can be difficult to find a suitable partner
• Possible development of conflict between you and your partner(s)
• You are held financially responsible for business decisions made by your partner(s); for example, contracts that are broken

Corporation

Another type of business structure is a corporation. Incorporation can be done at the federal or provincial/territorial level. When you incorporate your business, it is considered to be a legal entity that is separate from its shareholders. As a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation. It is always wise to seek legal advice before incorporating.

Advantages:

• Limited liability
• Ownership is transferable
• Continuous existence
• Separate legal entity
• Easier to raise capital than it might be with other business structures
• Possible tax advantage as taxes may be lower for an incorporated business

Disadvantages:

• A corporation is closely regulated
• More expensive to set up a corporation than other business forms
• Extensive corporate records required, including documentation filed annually with the government
• Possible conflict between shareholders and directors
• You may be required to prove residency or citizenship of directors

The maximum disability amount for the 2017 year is $8,113. The disability amount can be claimed on your tax return once the person has been approved by the CRA as eligible for the disability tax credit. The disability amount can be claimed by the disabled individual personally, for your dependent or for your spouse or common-law partner. There are specific criteria required by the CRA for an individual to be eligible for the DTC. To qualify for the disability tax credit, the individual must meet all of the following requirements:

• is prolonged, which means the impairment has lasted, or is expected to last for a continuous period of at least 12 months
• is present all or substantially all the time (at least 90% of the time)
• life-sustaining therapy, which also has 2 criteria:
  • the therapy is needed to support a vital function, even if it eases the symptoms
  • the therapy is needed at least 3 times per week, for an average of at least 14 hours a week

These requirements must be certified by a professional doctor.

Recent news has released that it is becoming increasingly difficult to obtain the disability tax credit. In May 2017, CRA has been rejecting certain individuals and also requiring further application to continue on the DTC. Several of these concerns involved diabetic patients. Patients must meet the 14 hour requirement in order to qualify for the DTC. Activities that do not count in the 14 hours requirement include:

• the time a portable or implanted device takes to deliver the therapy (such as an insulin pump, a CPAP machine, or a pacemaker)
• activities related to dietary restrictions or regimes, even when these activities are a factor in determining the daily dosage of medication (such as carbohydrate calculation)
• activities related to exercising, even when these activities are a factor in determining the daily dosage of medication
• travel time to receive the therapy
• going to medical appointments (other than appointments where the therapy is received)
• buying medication
• recuperation after therapy

Visit this link to see to determine whether you or someone you know is eligible for the disability tax credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit/you-eligible-disability-tax-credit-3.html

The Condominium Property Amendment Act (CPAA) was passed by the Alberta Legislature in December 2014.  Since then, there have been two amendments summarized as follows:

Regulations that took effect on January 1, 2018 have:

•   Broadened the amount of information that developers must disclose to elected boards when the boards take over control of the corporation, such as technical documents and financial information. 
• Expanded the number of agreements that can be terminated by the first elected board of a condo to better protect condo owners from being stuck with a poorly negotiated agreement. The new laws allow for the inclusion of almost any agreement that may be in place during development, including landscaping agreements and maintenance agreements.
• Formally recognized the ways in which an owner may call special meetings of the corporation. This empowers owners by allowing them to call for special general meetings.
• Provided the government additional inspection powers and the ability to issue fines to developers, if the rules are not being followed.
• Increased the penalty for offences, from $15,000 for an individual and $25,000 for a company to $25,000 and $100,000, respectively, or three times the amount gained by the offence, whichever is greater.

Regulations that took effect on April 1, 2018 have:

• Required developers to provide buyers an occupancy date so they know when their units will be ready, and concrete remedies, including the ability to end a contract, when the unit is not ready on time.
• Required developers to provide more information to condo buyers, including occupancy dates, materials to be used to finish the condo, and other fees that the developer will charge the purchaser.
• Increased protection for purchasers’ trust money by requiring it to be held by a lawyer instead of the developer and creating specific rules about how this money is handled.
• Provided means for condo corporations to recover costs directly from the developer when the developer has deliberately underestimated expenses for things like maintenance and management, during the marketing process.
• Established rules for notice and options for buyers when changes happen during construction that a buyer did not agree to.
• Established new rules requiring parking spots for visitors and people with disabilities are listed in condo plans.

The tax-free savings account allows an individual to make contributions and earn income within the account tax-free, even when its withdrawn. An individual over the age of 18 begins to accumulate a maximum contribution room beginning 2009. The annual contribution rooms are as follows:

2009 – $5,000

2010 – $5,000

2011 – $5,000

2012 – $5,000

2013 – $5,500

2014 – $5,500

2015 – $10,000

2016 – $5,500

2017 – $5,500

2018 – $5,500

Questions about TFSAs:

Q: If I haven’t made any contributions to my TFSA, how much can I contribute now?

A: If you have never made any TFSA contributions, up to the end of 2018, you are able to contribute a maximum of $57,500. Contribution rooms roll forward to the future years if annual maximums have not been met.

 

Q: What if I contributed $7,000 in 2015? How much can I contribute now?

A: If you contributed $7,000 in 2015, you would still have $3,000 left over from 2015 to contribute today. Note that it is important to avoid over-contributions by tracking contribution/withdrawal activity.

 

Q: If I made a contribution of $5,500 in April 2017 and withdrew $3,500 in August 2017, can I contribute $2,000 by the end of 2017?

A: Since the contribution maximum was met in April 2017 for the 2017 year, although you withdrew $3,500, you would not regain the contribution room until the following year. Therefore, contributing another $2,000 would result in an over contribution subject to taxes payable at 1% per month for the excess amount sitting in the TFSA.

 

Q: Can I make investments with my TFSA?

A: Absolutely! A great tax advantage in investing with your TFSA is investment income is earned tax-free. Tax tip: If there is an investment loss, there is an indirect loss to your contribution room for the year.

 

Q: Can I open multiple TFSAs?

A: Yes. An individual can have multiple TFSAs; however, all the accounts share the total contribution room. It is important to ensure that if you are opening more than one TFSA or are transferring funds between TFSAs, that these transfers are completed directly as internal transfers by the bank. Transfers completed by the bank will not impact your contribution room. You may name a surviving spouse as the successor holder of your TFSA. If the TFSA holder passes away, the surviving spouse will receive the TFSA balance and there will be no impact on the survivor’s own contribution room. This transfer must be completed as a direct/internal transfer by the bank to avoid contribution room complications.

Keep posted for an update on any proposed upcoming changes to this benefit in 2018.

The Alberta Child Benefit is available to assist lower-income families with children under 18. To be eligible for the ACB, you must:

• be a parent of 1 or more children under the age of 18
• have a family net income of less than $41,746 per year
• be a resident of Alberta for at least 1 month prior to receiving the benefit
• file a tax return

 To apply for this benefit, visit: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html#nt or contact our office and one of our personal tax professionals would be glad to assist you. 

In 2018 the Canada Revenue Agency is making the following two changes to ease the burden for employers who have to report taxable benefits:

• Employers who pay group term life insurance premiums for retirees will only have to report a paid premium if it is greater than $50 and it is the only income reported on a T4A slip. Previously, all amounts, regardless of how small, had to be reported.
• The threshold for reporting employee benefits that result from employer-sponsored social events will be $150 per person, instead of $100. All other aspects of the related policy will stay the same.