Newsroom

 

If you recently received a letter in a plain, brown envelope from the Canada Revenue Agency, chances are it was because your 2017 personal income tax return is being reviewed to “make sure the benefits or credits you’re receiving are correct.”

If you received such a letter, the CRA’s advice, issued in a press release this week, is: “Don’t panic. You’re not alone.”

Each year, the CRA sends out approximately 350,000 letters and questionnaires asking taxpayers to provide additional information to ensure that taxpayers are properly entitled to the various benefits, deductions and credits which they claimed on their returns.

They may ask for documents to confirm that the information in the CRA’s records is correct and up to date. For example, the CRA may ask you to validate your marital status, where you live, and who cares for your children. This information can change as life events occur and may affect both whether you’re eligible to receive certain benefits and credits and how much you may be entitled to receive.

Read more from Financial Post

 

With the dog days of summer in full drag, what better to break up the humdrum than a refreshing gust of QuickBooks® Online updates and improvements.

Here’s a peek at the new features coming your way this month. 

What’s new in August

  • Bulk trip deleting in QuickBooks Self-Employed
  • Test-drive new features in QBSE Labs 
  • Simplified Chart of Accounts setup in QuickBooks Online
  • Create new accounts when you add items in QuickBooks Online 

Read more from Intuit

 

This week marked the one-year anniversary of the launch of the government’s much-maligned plan to overhaul the tax rules governing Canadian controlled private corporations (CCPCs), which originally proposed to shut down three areas: income sprinkling of dividends among family members, the accumulation of passive income inside of CCPCs, and surplus stripping, whereby dividend income is effectively converted into lower-taxed capital gains.

The proposal regarding surplus stripping has been abandoned (at least for now), but legislation limiting income sprinkling has been passed and is effective for 2018. Similarly, a new rule addressing the accumulation of passive income in a CCPC by restricting the corporation’s access to the small business deduction’s low tax rate once its passive investment income exceeds $50,000 will begin applying in 2019.

Read more from Financial Post

 

As every reader will surely recall, the federal government issued a number of tax proposals for private corporations last summer. The government ultimately abandoned or replaced all of them, except for new rules that address so-called “income splitting.” Those rules, now in force, are extraordinarily complex and will impose a heavy compliance burden on small business. The rules should be set aside.

Income splitting involves diverting dividend income (and certain other types of income) from one family member to another member in a lower tax bracket. The planning is disarmingly simple.

Read more from Financial Post

 

“Fair market value” is an important concept in tax law. That phrase, FMV, is used throughout our Income Tax Act, appearing literally hundreds of times, from the rules to be used to value inventory (“lower of cost and fair market value”) to the determination of the appropriate amount that a charity should put on a donation receipt when property is donated “in-kind” to the charity.

How fair market value is actually established, however, can be the subject of some disagreement, as we learned in a decision released by the Tax Court this week concerning the appropriate value to be ascribed to wine that was donated to two Ottawa charities.

In 2005 and 2006, the taxpayer donated 21 bottles of wine, consisting of 19 different labels and vintages, for use in charity wine auctions held to benefit the Ottawa Food Bank and the Ottawa Chamber Music Society.

Read more from Financial Post