Taxes and the Tax Department – What to do when someone who has died

We understand that dealing with the death of a loved one is difficult time.  It does involve dealing with their tax situation after they have passed away.  Some of the tasks that need to be done include:

  • Contacting the tax department and let them know the deceased’s date of death as soon as possible at 1-800-959-8281.
  • If the deceased was receiving any benefit or credit payments such as the Goods and Services tax (GST) credit, the working income tax benefit advance payments, and/or the Canada child benefit, please also let the tax department know to stop the payments and, if applicable, transfer them to a survivor.
  • A final personal tax return must also be filed for the deceased. On the final return, all of the deceased’s income, credits, and deductions   are included from January 1st of the year of death up to and including the date of death.
  • Income earned after the date of death may have to be reported on a T3 Trust Income Tax and Information Return.
  • The legal representative or executor is required to file any tax returns for the years that the person did not file before he or she died.
  • The due date for the final return depends on the deceased’s date of death. Please contact our office for help in determining due dates and timing for all tax filings due.

Retirement Planning Resources

Thanks to everyone who attended our seminar on Technology and Retirement Planning!  It was great seeing everyone brave the cold weather to attend.

As promised, we are posting the retirement planning resources available to assist you in achieving your retirement goals:

Top 5 Things to Remember about Retirement Planning

  1. Planning ahead and wisely will make retirement must less stressful.
  2. How much cash and investments you will need in retirement will depend on what your retirement goals are.
  3. Government payments such as CPP, OAS and GIS are not enough to fund your retirement.  So, make sure you contribute to Government tax deferral/saving opportunities like the RRSP and TFSA when you can.
  4. If you have the opportunity, participate in company pension plans and maximize any company matching contribution benefit available.
  5. Make non-registered investments part of your retirement plan.

Canada Revenue Agency’s reporting requirements for the sale of a principal residence

When you sell your principal residence, usually  you do not have to pay tax on any gain from the sale. This is the case if you are eligible for the full income tax exemption (principal residence exemption) because the property was your principal residence for every year you owned it.

Starting with the 2016 tax year, generally due by late April 2017, you will be required to report the sale on Schedule 3, Capital Gains of the T1 Income Tax and Benefit Return. Reporting will be required for sales that occur on or after January 1, 2016.

Make Payments Directly to the CRA Online

“My Payment” is an electronic payment service offered by the CRA that uses Visa Debit or Interac Online for individuals and businesses to make payments directly to the CRA using their bank access cards.  To access the service, please use the following link:

My Payments Page

You can use “My Payment” if you have a bank access card from the following financial institutions:

Interac Online logo only:

  • BMO Bank of Montreal (personal accounts only)
  • RBC Royal Bank
  • Scotiabank
  • TD Canada Trust
  • First Nations Bank of Canada
  • Acadian Credit Union
  • Accent Credit Union
  • Access Credit Union
  • Affinity Credit Union
  • Assiniboine Credit Union
  • Beaubear Credit Union
  • Caisse Populaire de Clare
  • Coastal Financial Credit Union
  • Columbia Valley Credit Union
  • Community Credit Union (Atlantic)
  • Community First Credit Union
  • Consolidated Credit Union
  • Copperfin Credit Union
  • Credit Union Atlantic
  • Eagle River Credit Union
  • East Coast Credit Union
  • EasternEdge Credit Union
  • Envision Financial
  • Évangéline-Central Credit
  • Goodsoil Credit Union
  • iNova Credit Union
  • Interior Savings Credit Union
  • Kindred Credit Union
  • Kingston Community Credit Union
  • LaHave River Credit Union
  • Libro Credit Union
  • Limestone Credit Union
  • Luminus Financial
  • Mainstreet Credit Union
  • Malpeque Bay Credit Union
  • Morell Credit Union
  • NBTA Credit Union
  • New Ross Credit Union
  • OPPA Credit Union
  • OMISTA Credit Union
  • PenFinancial Credit Union
  • Progressive Credit Union Limited
  • Provincial Credit Union
  • Public Service Credit Union
  • Reddy Kilowatt Credit Union
  • Souris Credit Union
  • Sudbury Credit Union
  • Sydney Credit Union
  • Tandia Financial Credit Union
  • The Police Credit Union
  • Tignish Credit Union
  • Toronto Municipal Employees’ Credit Union
  • Valley Credit Union
  • Venture Credit Union
  • Victory Credit Union
  • Windsor Family Credit Union
  • Your Credit Union

Visa Debit logo:

  • CIBC
  • RBC Royal Bank
  • Scotiabank
  • TD Canada Trust

Employee Benefits and Allowances

Your employee is considered to receive a benefit if you pay for or give something that is personal in nature:

  • directly to your employee; or
  • to a person who does not deal at arm’s length with the employee (such as the employee’s spouse, child, or sibling).

A benefit is a good or service you give, or arrange for a third party to give, to your employee such as free use of property that you own.

An allowance is a limited amount decided in advance that you pay to your employee on top of salary or wages, to help the employee pay for certain anticipated expenses without having him or her support the expenses. An allowance can be calculated based on distance or time or on some other basis such as motor vehicle allowance using the distance driven or a meal allowance using the type and number of meals per day.

A reimbursement is an amount you pay to your employee to repay actual expenses he or she incurred while carrying out the duties of employment. The employee has to keep proper records to support the expenses and give them to the employer.  These are not taxable.

There are many types of benefits and allowances that you may have to include in an employee’s income. Whether or not they are taxable depends on the type of benefit or allowance and the reason an employee receives it. To determine if the benefit is taxable, the tax department has a useful guide.  Please see Chapters 2 to 4 of the Guide T4130, Employers’ Guide – Taxable Benefits and Allowances (follow the link).

Once you determine that the benefit is taxable, you need to calculate the value of the specific benefit. The value of a benefit is generally its fair market value (FMV). This is the price that can be obtained in an open market between two individuals dealing at arm’s length. The cost to you for the particular property, good, or service may be used if it reflects the FMV of the item or service. You must be able to support the value if you are asked by the tax department.

Add the taxable benefits and allowances to the employee’s income each pay period to determine the total amount that is subject to source deductions. The benefits and allowances may be subject to CPP contributions, EI premiums, and income tax deductions.

QuickBooks Online

Many of our clients already use QuickBooks to account for their business.  QuickBooks has a new product using online cloud services.  This might a great fit for your business or organization if you:

  • Want the flexibility to work on the go
  • Looking for zero maintenance software
  • Comfortable working online
  • Have one or more locations

Some of the benefits are:

  • Anytime, anywhere access for up to 25 people at the same time
  • Automatic updates and upgrades that don’t require any action
  • Free support to help with setup or to answer “how-to” questions
  • Light inventory capabilities and expenses tracked by job
  • iPhone, iPad, Android apps that sync key tasks across all devices
  • Bank & credit card transactions automatically downloaded from 16,000+ banks
  • Automatic emailing of recurring transactions (invoice/receipts) and reports
  • Free access for an accountant or bookkeeper to work on the books at the same time

Seniuk and Company are certified QuickBooks Pro Advisors and can provide help or answer any questions.  Please contact Laura Marcato directly at [email protected] for any enquiries.


Ways to pay your taxes

How to pay using CRA’s My Payment:

My Payment is an electronic payment service that lets businesses make payments directly to the CRA using their bank access cards. You don’t need to register to use My Payment, and you can make payments to more than one CRA account in a single transaction.

  1. Go to My Payment.
  2. Make sure you have your 15-digit CRA program account number handy.
  3. Follow the instructions on your screen.

How to pay using CRA’s pre-authorized debit:

When you use My Business Account to set up a pre-authorized debit (PAD), you agree to authorize the CRA to withdraw a pre-determined amount from your bank account to pay tax on a specific date or dates. To set up a PAD agreement:

  1. Login to My Business Account.
  2. On the Welcome page, select “Pre-authorized debit” under Make payments.
  3. Select “Create new agreement” and follow the instructions on your screen.

How to pay using online banking:

If you have a business bank account, you can pay your business taxes the same way you pay your phone or hydro bill.

  1. Sign in to your financial institution’s online banking service.
  2. Under “Add a payee,” look for an option such as:
    Federal – Corporation Tax Payments – TXINS
    Federal – GST/HST Return – GST 34 – (GST34)
    Federal Payroll Deductions – Regular/Quarterly – EMPTX – (PD7A)
    Federal Payroll Deductions – Threshold 1 – EMPTX – (PD7A)
    Federal Payroll Deductions – Threshold 2 – EMPTX – (PD7A)
  3. Carefully enter your account number to avoid a misapplied payment.

How to pay in person at a financial institution:

To make a payment at your Canadian financial institution, you need a personalized remittance voucher. Financial institutions will not accept photocopies of remittance vouchers or payment forms. A personalized remittance voucher will be mailed to you after your tax return has been filed. Note: the remittance voucher could take up to a few weeks to come in the mail.

How to pay through mail delivery:

To make a payment through mail delivery, mail your cheque along with the remittance form CRA sent to you to Canada Revenue Agency, Tax Centre, 66 Stapon Road, Winnipeg, MB, R3C 3M2. The front of the cheque should include your business number and a description of the payment i.e. “2015 Corporate income taxes”.

Increase Sales to Grow Your Business

How much time are you spending on sales? If you’re running a new business, you should devote at least 80% of your day to it. If you’re an established business, you should spend at least 30% of your day on the sales process or connecting with customers. While this may seem extreme, sales growth should be the core to any business plan. The founder of IBM, Thomas Watson once remarked, “Nothing happens until somebody sells something.”

These are some things you can do to increase sales:

  • Introduce new products or services – You’ll need to research your market to see if there is an appetite for your proposed offering. Consider using some of your existing clients as a test, which can help you manage some of the risks and even help you learn how the product or service can be improved. Pay special attention to marketing and promotion to get the word out on your new offerings.
  • Expand to new markets – While targeting new markets can be costly, it can increase your client base. Market research will help you understand the potential new market and help you devise a strategy to tackle it.
  • Enhance your existing sales techniques – This could include providing your sales staff with enhanced training, contracting independent sales representatives, using resellers, and implementing an e-business strategy if one does not exist already. The outcomes of these techniques should be tracked and be prepared to shift your strategy if you are not seeing your desired results. Study your intended clients to know how best to reach them, and plan your marketing strategy accordingly.
  • Change price, terms or conditions of billing – Review what your competitors are offering and your own profit margins to determine if you can reduce your cost. Without touching your price, sometimes sweetening the deal with favorable terms can sway the buyer your way.
  • Monitor the competition – Be aware of what your competitors are doing to help you understand their behaviors, capabilities and limitations. With this knowledge, you will be better prepared to defend your market position, react to changes, and find niche markets.
  • Improve community relations – Activities such as sponsoring community events, speaking at engagements, or supporting a local sports team can raise awareness of your business and stimulate market demand.
  • Don’t neglect customer – Keep in mind the customer’s perception of your service quality or responsiveness. The positive word of mouth from a happy customer is priceless.

Tips for Picking the Perfect Accountant

Hiring an accountant for your business is no longer just about finding someone good at number-crunching. A qualified accountant can help businesses make better business decisions based on information drawn from accurate data and informed by broad business knowledge.

So how do you go about finding a great accountant? Here are some tips:

  • Determine your business needs: Do you want an accountant to just handle the books and file your taxes, or someone who can give advice, and who will be there as your business grows? A qualified accountant can help deal with buying and selling decisions, tax planning and has the credentials to sign financial statements and do statutory compliance work. Our firm can offer all these types of services and more.
  • Get licensed candidates: A professional accountancy designation is important. In Alberta it means a CA (Chartered Accountant) or CPA (Chartered Professional Accountant). These designations mean that your accountant has a degree of education, a certain amount of experience and needs to abide by ethical rules.
  • Determine accessibility: Is your accountant available to answer questions throughout the year? A firm like Seniuk and Company is available pretty much round-the-clock for clients. Also due to our smaller firm size, there is a lessor chance of different staff being assigned to your file year to year.
  • Ask what they charge for services: Most charge by the hour (Our firm charges between $50 to $250 an hour, depending on their duties). To get an accurate quote, bring a copy of your tax returns and most recent financial statements.
  • Talk about technology: Spreadsheets and other accounting paperwork are giving way to computers and digital filing. Paperless accounting saves time and money. Our firm works in a virtually paperless environment and is able to operate in the most up to date business computer systems.