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What's New by Month
March 2020
RRSP Contribution Not Recorded on Previous Year Tax Return
If you made RRSP contributions from March 1, 2018 to March 1, 2019, this should have been included on Schedule 7 which was filed with your 2018 tax return. Check our article to find out what to do if the contribution wasn't recorded, and which line number to use when adjusting your tax return with CRA.
If your business is incorporated, you must file a separate corporate income tax return. If not, the business income is included on specific forms in your personal income tax return. A professional accountant can help to ensure that you claim all allowable expenses.
If you have a business or a rental property, you have to decide whether an expense is capital or current in nature - in other words, whether it should be capitalized or expensed, or if it is personal use. General guidelines can help.
Reinvested Distributions From Canadian Exchange Traded Funds (ETFs)
The T3 you receive for your income from an ETF may have an amount in box 21 for capital gains. It is possible that all or part of this amount was not actually paid to you, but was reinvested. This increases your adjusted cost base (ACB) for the amount of reinvested distributions, which reduces your capital gain when you eventually sell the investment.
Eligible Dividends and the Dividend Tax Credit
When you receive dividends from Canadian public corporations, 138% of the dividend is included in taxable income. Due to the dividend tax credit, the tax on the dividends is much less than it would be on employment income, interest, or foreign dividends.
Saskatchewan 2020 Budget - March 18, 2020
Personal income tax system to be indexed rate starting in 2021; new incentive to encourage investment in the chemical fertilizer sector; extend manufacturing and processing exporter tax incentive for 3 years; and more.
New Brunswick 2020 Budget - March 10, 2020
Residential non-owner-occupied property tax rate reduction, student loan rate reduced, new carbon pricing plan, no personal or corporate income tax changes.
COVID-19 Business Support - March 27, 2020 Update
Further federal government support for small and medium businesses:
- government-backed interest-free bank loans, partially forgivable,
- an increase in the temporary wage subsidy from 10% to 75%.
- GST/HST remittances can be deferred until June.
The Bank of Canada further reduced the target for the overnight rate, to 0.25%.
Ontario COVID-19 Action Plan March 25, 2020
GAINS payments doubled, student loan payments deferred, new 10% refundable investment tax credit for businesses, business tax deferrals, and more.
This month's video discusses:
- COVID-19 - lots of resources
- Employment Insurance - need to file for EI on time
- Directory Liability re Payroll Withholdings
- Tips - Gross Negligence Penalties
- Is it a Business? Start-ups and Wind-ups
- CRA My Account - Uncashed Cheques
Tax Refund - How Long Will it Take?
Checking the status of a refund, uncashed refund cheques - now shown in My Account, interest on refunds, mandatory direct deposit.
What Kinds of Income are Not Taxable?
Some non-taxable income is not reported on tax returns. Some must be reported and later deducted, affecting some tax credits, clawbacks, and income-tested benefits.
COVID-19 Provincial / Territorial Support and Information
All provinces and territories have created special web pages to provide information on COVID-19, how to prevent it, and what financial and other supports are being provided.
Deductible and Non-Deductible Investment Expenses
Which expenses are deductible and which are not? When does interest become non-deductible (disappearing source rules)? Where are these expenses claimed on the tax return?
Key Points in Canada's COVID-19 Economic Response Plan
See a detailed summary of the key points, for employees, employers, small business, parents, students, and those with RRIFs.
Temporary Wage Subsidy For Employers re COVID-19
More details are now available about the 10% wage subsidy for employers, and how it can be claimed. There is a new video from Video Tax News explaining things as well.
Do you have a worthless investment? Can't sell it because it was delisted? There may be a way to claim the capital loss.
Property Rental Deductible Expenses
If you rent out one or more rooms in your home, or if you own a rental property, there are many expenses that can be deducted in calculating your net rental income.
Free Tax Preparation Service - Community Volunteer Income Tax Program
This free tax service is available for those with modest incomes - $35,000 for an individual, $45,000 for a couple (add $2,500 for each dependant), as long as the tax situation is relatively simple.
We've assembled a page of resources including links to government and financial institution information, as well as Video Tax News information re COVID-19 measures. Information on student loans, income support for workers, and business supports.
Manitoba 2020 Budget - March 19, 2020
Retail Sales Tax rate reduced to 6% July 1, 2020, other RST rate reductions; Green Levy effective July 1, 2020, to replace federal carbon tax; probate fees eliminated July 1, 2020.
Tax Return Deadline Extended re COVID-19
The 2019 tax deadline is extended to June 1, and tax balances and instalments may be deferred till after Aug 31 without interest or penalties. Support has been announced for small businesses, employees, self-employed, etc.
Quebec 2020 Budget - March 10, 2020
The refundable tax credit for caregivers will be enhanced and made more accessible. There are many measures concerning businesses, but no change in personal or corporate income tax rates or dividend tax credit rates.
Change in Use of Property - Deemed Disposition
If a property such as a principal residence has changed in use from personal use to income-producing (or vice-versa), there is a deemed disposition. Fair market value must be determined, and special rules apply for the depreciable portion of the property.
Tax Issues re Investing, and Tax Treatment of Different Types of Investments
In kind (securities) transfers are not on your T5008 and Trading Summary; Reporting foreign transactions and holdings; Trade date vs settlement date and much more!
Yukon 2020 Budget - March 5, 2020
The Yukon small business corporate income tax rate will be reduced to zero effective Jan 1, 2021. Yukon's basic personal amount tax credit will mirror the changes to the federal basic personal amount.
US Federal Estate Tax May be Payable by Canadians
If a deceased Canadian resident who is not an American citizen owned U.S.-situated assets exceeding $60,000 US in fair market value at the time of death, a US federal estate tax return must be filed. Read the article, and try out our calculator.
US Federal Estate Tax Calculator for Canadians
Our US Estate Tax Calculator has been updated to include the 2020 tax year.
February 2020
Alberta 2020 Budget - February 27, 2020
There were no new tax changes announced. Corporate general income tax rate reductions were previously announced. The target is to have a small budgetary surplus by the 2022-23 fiscal year.
This month's video discusses:
- T1 Season - What's New
- U.S. - New Disclosure Requirements for Crypto Activities
- Vehicle Logs/Apps
- Tenant Relocation Assistance - Taxable?
- Starting a Business While Collecting EI
- In-Kind Contributions to an NPO
Nunavut 2020 Budget - February 26, 2020
There were no tax changes announced.
Nova Scotia 2020 Budget - February 25, 2020
No personal tax changes were announced. Corporate tax rates to be reduced: general to 14%, small business to 2.5%. Vaping products to be taxed, tobacco taxes increase. Digital media and digital animation tax credits will be extended.
Northwest Territories 2020 Budget - February 25, 2020
No new taxes were announced.
What Happens to Debts of a Deceased Person?
If that debt is a tax debt, it can be recovered by CRA from named beneficiaries of registered plans, or from others to whom the deceased transferred property prior to death.
There are several ways of splitting income, either with a spouse or child. Some methods of splitting income with a spouse are done only on the tax return, such as pension splitting.
Eligible Dependent / Equivalent to Spouse Tax Credit
Are you a single parent? Or, are you supporting a parent or other dependent relative? The equivalent to spouse tax credit may be available.
BC 2020 Marginal Income Tax Rates
Our tax rate tables have been revised to include the new BC top tax rate of 20.5%. This results in a combined federal/BC top tax rate of 53.5% for taxable income over $220,000.
BC 2020 Budget February 18, 2020
The budget introduces a new top personal tax rate of 20.5%, as well as PST on carbonated beverages and streaming services such as Netflix and Amazon Prime. A new BC Access Grant for students is also introduced. Carbon tax rate increases for 2020 and 2021 are detailed.
Students - Tax Information, Savings Plans, Financial Help
Learn about tax deductions and credits, private school costs, RESPs, student grants and loans, and help with tax preparation.
Are Your Tax Credits Changing for 2020?
Turning 65 this year? Other tax credits changing? Complete a new TD1 form to give to your employer. Your TD1 form determines your tax withholdings. Working part time = maybe no tax withholdings.
RRSP Deadline Monday March 2nd
The deadline for 2019 contributions to an RRSP is Monday, March 2nd - don't wait till the last minute!
Have you Sold Your Principal Residence?
This sale MUST be reported on the tax return, even if it is 100% eligible for the principal residence exemption. When there is more than one owner, each will report their share of the sale.
2020 Sales Tax Rates - GST/HST, PST, RST, QST
There are no sales tax rate changes thus far for 2020.
2020 Corporate Income Tax Rates
The general corporate tax rates have been reduced for 2020 in Alberta and Quebec, and the small business tax rate has been reduced in Ontario, Quebec and Prince Edward Island.
The 2020 tax rate tables have been updated to include the effect of the federal enhanced basic personal amount.
Enhanced Canada Pension Plan (CPP)
Are you confused about the 2019 changes to the CPP? The contributions are separated into 2 parts for the tax return. The original 4.95% CPP is used for a tax credit as usual, and the additional contribution for enhanced CPP is allowed as a deduction from income.
Unclaimed Money - Is Some of it Yours?
The Bank of Canada holds about $888 million of unclaimed balances, and the BC Unclaimed Property Society holds over $159 million. There are separate Alberta and Quebec unclaimed property registries.
January 2020
Automobiles, Passenger Vehicles and Motor Vehicles - Tax Issues
Deductible expenses, need for a trip log (CRA has a car expense project), expense limitations, auto taxable benefits, and GST/HST input tax credits on vehicle allowances.
Why You Should File a Tax Return
There may be circumstances that require you to file a tax return, including the sale of your principal residence. You should file a tax return even if you have little or no income, to receive refundable tax credits, GST/HST credit, and to establish eligibility for other government programs and services.
Filing Your Tax Return - Income, Deductions, Tax Credits
We have many articles on filing your tax return and how this can be done, as well as articles about different types of taxable income, deductions and tax credits, and many other topics. Make sure you take advantage of available tax credits!
This month's video discusses:
- Joint Tenancy - Cautions
- Executor Personal Liability
- Condo Pre-Sale - GST/HST Issues
- Home Accessibility Tax Credit
- Tax Promoter Schemes
- Negligence - Erroneous Donation Claims
Federal 2020 Pre-Budget Consultations
Surveys are available to be completed on the Your Budget website, and you can share your ideas via email.
Ontario Estate Administration Tax Eliminated for Estates up to $50,000
As per the Ontario 2019 budget, estate administration fees are now zero for estates of $50,000 or less.
Hoping To Be a Business Owner?
Are you an aspiring entrepreneur? Should you start your own business, or buy the shares or assets of an existing one? Check out advantages and disadvantages.
Transfer Shares to a Registered Account, But Not at a Loss!
You can do an in kind transfer of shares from a non-registered account to a registered account such as an RRSP. However, if you transfer shares on which there is a loss, the loss will not be deductible. If you transfer shares on which there is a gain, you will have a taxable capital gain.
Provincial 2020 Budget Consultations
Give your ideas! Ontario budget consultations end February 11, 2020. Manitoba will end January 31, so give your input now.
RRSP/RRIF Withdrawal Calculator
Use our calculator to calculate your 2020 minimum annual withdrawal, and to estimate your earnings and withdrawals for the next 40 years. Works for non-registered also!
Historical Returns on Investments - Stocks, Bonds, T-Bills
2019 was a great year for stocks! See returns for 1/5/10/20/40/50 & 70 years, and the growth of $1,000 invested. Over the past 10 years one would be losing money after inflation by investing in Canadian 3-month T-bills or Canadian government 1-3 year bonds.
Use our investment return calculator to determine your returns for 2019 or any time period for a particular investment or investment account, or your entire portfolio.
Assets are sometimes put into joint ownership with right of survival in order to minimize probate fees. A recent court case highlights why this is sometimes a very bad idea!
Reporting Foreign Income and Expenses on the Tax Return
All income and expenses must be reported on your tax return in Canadian dollars, converted either at the transaction date exchange rate, or the average exchange rate for the year. The average US exchange rate for 2019 is 1.3269, which can be used for dividends, but not for purchases and sales.
See also Prior Years:
Revised: March 31, 2020