Monday, 7 April 2014

The tax deadline to file your 2013 return is April 30th - get ready now.

The deadline to file your 2013 taxes return in April 30th. If you haven’t file already I recommend you do so soon. If you file late, and you owe money, you risk paying a penalty to the Canada Revenue Agency and interest on the money you owe. Don’t make you tax burden any greater. If you're owed money, you’ll get your return back earlier and it will give you that much more time to invest the money where you want to. There are some changes that could affect the way you file this year, here is what you need to know. 
 
What's new this year, when it comes filing our taxes?
 The government has introduced a temporary "first-time donor's super credit" for the first $1,000 donated by individuals who have never claimed a credit for charitable donations. The super credit supplements the usual value of the charitable donation tax credit by 25 per cent. The supplement applies to gifts of money up to $1,000 donated in one tax year between March 20, 2013, and the end of 2017.
 
There's also an Adoption expenses tax credit. In its 2013 budget, the government extended the period.  During which individuals can claim expenses related to an adoption. The eligible period now begins right when an application is made. 
 
Overseas employment tax credit  The CRA states, you may be entitled to claim this credit for qualifying income (to a maximum income of $100,000 for a full year) from employment outside Canada. In general, to qualify for the OETC, you must have performed all or substantially all (at least 90%) of your employment duties outside Canada for a period of more than six consecutive months (all or part of which were during the tax year for which you are claiming the credit) with a specified employer. Note this credit will be phased out by 2016.
 
Other changes to know about.
New income support: Starting in January 2013, the federal government annouced it will provide $350 per week for up to 35 weeks to parents of murdered or missing children (less than 18 years of age) whose death or disappearance is the result of a Criminal Code offence
 
Tax Free Saving Account- The limit in 2013 increased from $5000 a year to $5500. This room remains until you make a contribution. Every year more room is crated int your TFSA, making it a great alternatives to the RRSP.
 
 
What should people who are self-employed keep in mind?
I highly recommend seeking the advice of an accountant if you’re self-employed. The deadline for self-employed to file in June, 15th. 2013. But the deadline to pay any money owed to the CRA is still April 30th.  H & Block answers some commonly asked question by self-employed individuals.
  • Do I need a business number? – You do not need a business number to  report business income on a T2125 Form. This form records your business income and expenses as part of your personal return. And you need to pay CPP premiums if you earned more than $3,500.
  • Can I have losses? – You can have losses on your business that can be used to offset other income. If the losses exceed your income from other sources, you have a non-capital loss which can be carried forward to years when you have more income. 
  • Do I need receipts? – Keep really good records. Self-employed Canadians are more likely to be audited, so make sure you keep your receipts and other documentation to support your business expenses. And the expenses must  have been incurred to help you earn your income.
  • Do I really need to fill out a T2125? – Even if you are student with a summer job that paid you as a contractor, you should still report the income on a T2125 Form and claim reasonable business expenses. It may be tempting to enter the income on Line 104 (other employment income) but this is not correct.
  • Can I use a flat rate for business mileage? – If you use your car for business, you must keep a mileage logbook. There is a new simplified method for self-employed taxpayers but you are required to keep a logbook for a year before you can use it. If you do not have a logbook and claim business mileage, your claim may be reduced or disallowed.
  • Do I have to make instalments? – If you have tax owing in any two of the last three tax years, the Canada Revenue Agency will request that you make quarterly instalments rather than an annual payment. Failing to make instalment payments could result in interest charges.
  • Do I need a GST number? – If your annual revenues are more than  $30,000, you have to register for the GST/HST. However, even if your revenues are less than this, it is usually advantageous to register so that  you can claim input tax credits for the GST/HST you pay
Credits for families
It’s not new but worth mentioning. The Children art’s credit and activity credit are one of the most underused tax credits offered by the Federal Government. The children’s arts tax credit and the children’s fitness tax credit allow you to claim a 15% non-refundable tax credit on an amount up to $500 per child per credit on the fees you’ve paid in 2013 to register a child in a prescribed program of eligible activities. This can give you a credit of up to $75 per child per credit. There are more provincial tax credits to that each parent should look into.
 
Child care expenses deductions.
Child care costs are  a deduction from income on your  personal tax return.  This applies to child care cost incurred so a person can work. The deduction is applied to the individual with the lower income.
 
 
What should students and seniors keep in mind when filing?
If you are a senior you should file for both your spouse and yourself, there is pension splitting
 
Seniors and students sometimes don't file because they feel they make too little money, but that's a mistake because they can get GST, HST credits. Also students are creating room in their RRSP that can be used later. 
 
 
 

No comments:

Post a Comment