Highlights:
Year-End Tax Planning for 2022
2022 Remuneration
Tax Tips & Traps 2022 Year End Tax Planning
Blog | Tax
Canadian Dental Benefit
Do you have a child under the age of 12? If so, you may qualify for the Canadian Dental Benefit!
This benefit will give eligible families up-front, direct payments of up to $650 a year per eligible child under 12 for two years to help cover the costs of dental care services.
Payments will range between $260 and $650, depending on the adjusted net income. This payment will be tax free, and available for each eligible child, for two periods. The first period is for children under 12 as at December 1, 2022 who had dental care between October 1, 2022 and June 30, 2023.
Full criteria include:
- Have a child or children under 12 as of December 1, 2022 and are currently receiving the Canada Child Benefit (CCB) for that child;
- Have an adjusted family net income of less than $90,000;
- The child does not have access to private dental insurance;
- Have filed their 2021 tax return; and
- Have had or will have out of pocket expenses for their child’s dental care services incurred between October 1, 2022 and June 30, 2023, for which the costs are not fully covered or reimbursed by another dental program provided by any level of government.
More information on the Canada Dental Benefit can be found here: Canada Dental Benefit – Canada.ca
Tax Tips & Traps – 4th Quarter 2022 – Issue 140
Highlights In This Issue:
- Tax Tidbits
- Crowdfunding: Taxable or Not?
- Trusts: New and Expanded Disclosure Requirements
- Director Liability: Is Asking About Source Deductions Enough?
- Executor: Whether to Accept this Role
- GST/HST Input Tax Credits: Reasonable Expectation of Profit
- Tips Collected Electronically: Withholding Requirements
Tax Tips & Traps –3rd Quarter 2022 – Issue 139
Highlights In This Issue:
- Tax Tidbits
- Poker Playing: Hobby or Business?
- Required Travel: Between Home and Work
- Principal Residence Exemption: Land in Excess of One-half Hectare
- Personal Services Business (PSB): CRA Education Initiatives
- TFSA Overcontribution: Information in Your CRA Online Account
- CPP Disability Benefit: Following the Doctor’s Advice
- Shared Custody Arrangements: Impact of School Closures
Tax Tips & Traps – 2nd Quarter 2022 – Issue 138
Highlights:
Tax Tidbits
Buying and Selling a Home: Budget 2022
Principal Residence Exemption
CERB/CRB: Eligibility Verification
Estimated Sales by CRA: Audit File Selection and Assessment
Auditing Old Tax Returns: CRA Abilities and Limitations
Money Received from Abroad: CRA Reviews
Digital Adoption Program: Grants, Loans and Professional Assistance
Uplift – Your Voice, Your Business, and Your Community
Last night, Managers and Partners from GSE attended the Uplift – Your Voice, Your Business, and Your Community event, presented by Elgin-St. Thomas Small Business Enterprise Centre. This amazing event featured guest speaker Jam Gamble, and focused on gaining confidence and finding your voice to help elevate your life, business, and community. This was a great opportunity to gather with business and community leaders, and spend time together as a team!
Tax Party 2022
This past Monday marked the end of Personal Tax Season for us at Graham Scott Enns LLP. GSE marked the occasion with our usual end of tax season party. This year, we held our tax party at the wonderful Wildflowers Farm in St. Thomas. It was a great opportunity to socialize outside of the workplace and de-stress after a busy few months. There were lots of games, good food and great company. We’ve missed the opportunity to gather as a large group over the last two years, so we all enjoyed the opportunity to spend time together. A big thank you to Wildflowers Farm for hosting our party!
Work From Home – Personal Income Tax Deduction
Did you work from home in 2021? If the answer is yes, you may be eligible for a tax deduction on your 2021 tax return.
CRA has provided two options when claiming employment expenses related to working from home due to COVID-19.
- Temporary Flat Rate Method
- Detailed Method
Temporary Flat Rate Method
To qualify for the temporary flat rate method, the taxpayer must meet all the following conditions below:
- The taxpayer worked from home due to the COVID-19 pandemic
- The taxpayer worked more than 50% of the time from home for a period of at least 4 consecutive weeks in the year.
- The taxpayer is not claiming any other employment expenses
- The employer did not reimburse all the taxpayer’s home office expenses.
If you meet all the above conditions, you can claim $2 per day up to a maximum of $500 (250 days is the maximum number of days you can claim under this method). If you choose to claim home office expenses using this method, please inform your advisor of the number of days you worked from home in 2021. Please note, there is no certification required from your employer if you choose to use this method.
Detailed Method
To qualify for the detailed method, the taxpayer must meet all the following conditions below:
- The taxpayer worked from home due to the COVID-19 pandemic
- The taxpayer worked more than 50% of the time from home for a period of at least 4 consecutive weeks in the year.
- The taxpayer paid for expenses related to the workspace in their home
- The taxpayer has a completed and signed form T2200S – Declaration of Conditions of Employment for Working at Home Due to COVID-19 from their employer
If you meet all the above conditions, you can claim a portion of electricity, heat, water, maintenance/repair costs, the utilities portion of condo fees, common office supplies (such as toner and printer paper) and rent related to the use of the workspace in the home. Reasonable repair and maintenance costs are light bulbs, repairing walls of the workspace or broken desks etc. Expenses that are not deductible include mortgage interest, principal mortgage payments, furniture, equipment, computers, and accessories. All the allowable expenses must be prorated to the portion of the house you are using for the office workspace, which is computed on a square footage basis. In addition, the office workspace will have to be prorated for hours used for employment purposes (i.e., personal use hours of the workspace vs. employment use hours of the workspace). If you are using this method, please be sure to send your advisor information pertaining to the square footage of your home office workspace as well as the total square footage of your home, along with a ratio of personal vs business use of the home office workspace. Under this method, you are required to keep supporting documents related to the allowable expenses in case CRA requests to review them.
If you are wondering what option would result in a better tax deduction for you, CRA has created a calculator online which can be accessed using this link: Compare the claim methods – Home office expenses for employees – Canada.ca
If you have any questions, please reach out to your advisor who can assist you in making sure you claim the deduction that works best for your situation.
Congratulations Jonathan!
The Partners and Staff of Graham Scott Enns LLP would like to congratulate Jonathan Zettler on his promotion to Senior Staff Accountant, effective January 1, 2022!
Jonathan started with GSE as a co-op student in 2019. He then started full time a year later, in 2020, and has been an integral part of the GSE team, focusing on bookkeeping and payroll. Jonathan is currently working towards his Payroll Compliance Practitioner certification, where he can continue to put his payroll skills to great use! He is also highly involved in personal taxes, and compilation engagements, as well as a member of our Health and Wellness Committee.
“Jonathan provides excellent client service and is able to provide guidance on payroll, bookkeeping and personal tax questions. Jonathan embodies professionalism, diligence and technical excellence.”
Courtney Vachon, CPA, CGA & Kelly Ward, CPA, CGA
Managers
Congratulations Jonathan of your promotion to Senior Staff Accountant, and best of luck as you take on this new and exciting opportunity!
Things to Share with Your Accountant
This personal tax season, here are some things to remember to share with your accountant as you may be eligible for related tax credits.
- Moving expenses (including for university and college students)
- Child care expenses (including summer camps)
- Changes to your health or physical abilities that may result in eligibility for the Disability Tax Credit
- A relative has moved in with you as they require your care and support (i.e. parent, adult child, grandchild)
- Home renovations completed to make your house more accessible (i.e. wheelchair ramps, grab bars, etc.)
The Canada Revenue Agency requires that all income is reported on your personal tax return. Here are some types of income that you want to remember to talk to your accountant about if they apply to you:
- COVID government benefits received
- Income and expenses related to “side hustles” (including Uber, AirBnB, etc.)
- Cryptocurrency transactions
- Change in use to a property you own (i.e. renting out all or part of your home)
Other items to share:
- Disposition of your principal residence
- Change in personal status (i.e. married, common-law, separated, divorced)
If you are a GSE client, please complete a client questionnaire and bring it in with your personal tax return – it helps us to identify changes in your life that may impact your personal tax return.
The “2021 Personal Income Tax Return Checklist” also identifies further items to consider and share with your accountant.
Both documents can be found in our Client Document Library.