September is Back to School Month! Wondering what you should be claiming as income if you're a student? Some students may not realize that paying income tax or filing tax returns applies while enrolled in school. However, all income made while working, whether occasional, part-time, or full-time, is considered income and should be claimed. If you work in an industry where tips are included, the Income Tax Act states that all gratuity earnings must be declared as well. Students should also keep in mind that portions of scholarships and bursaries may also be taxed. Full tax exemption will apply to students who have received scholarships, fellowships and bursaries that have been awarded for full time studies towards diplomas and degrees (with the exception of a postdoctoral study.) If an apprenticeship grant has been received, this must be declared as income and will be on your T4 slip which is provided to you by your employer at the beginning of the next tax year. https://turbotax.intuit.ca/tips/what-to-claim-as-income-if-youre-a-student-5617 |
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PUMPKIN SPICE MARTINI 1.5 oz jigger vanilla flavored vodka (Such as Stoli) 1.5 oz jigger Irish cream liqueur (Such as Bailey's) 1.5 oz jigger pumpkin flavoured liqueur (Such as Hiram Walker) 1 cup of ice cubes 1 pinch of ground cinnamon 1 pinch of ground nutmeg Method: Pour the vanilla flavoured vodka, Irish cream liqueur and pumpkin flavoured liqueur into a cocktail shaker over ice. Cover, and shake until the outside of the shaker has frosted. Strain into a chilled martini glass. Garnish with a sprinkle of cinnamon and nutmeg to serve. Enjoy! |
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Beware the Scammers Representing CRA Recently there have been a number of people receiving calls from individuals claiming they are the CRA. (Canadian Revenue Agency.) Typically, they will state that you owe a lump sum of money and will need a lawyer and/or will get arrested if the sum is not paid. Do not give them any information or funds that they demand be paid. This is a scam. If you are ever owing a balance to the government, the CRA will contact you with an official document stating what is owing. You will be made aware via letter first, and then by a collection agent if the balance is not paid. Always be wary when receiving phone calls demanding payment and if ever not sure, we advise that you call the Canadian Revenue Agency directly and ask to speak to a representative about your account. |
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Canada Revenue Agency Reviews Recently we have received several notices from the Canada Revenue Agency regarding reviews of HST returns or expenses deducted for tax purposes. While these reviews are less extensive than an audit, they must be addressed and the documents must be provided to the CRA within the allotted time frame. HST Returns When preparing an HST return, we recommend that you keep a summary of the HST collected and paid that you are using to make your remittance for that period. This will ensure that at the time of review all can be reconciled to what was submitted to CRA, especially if a transaction is posted back in to the period after the HST return is filed. Remember that you must be able to provide support, such as invoices and receipts, for HST paid should your remittance be chosen for review. Expenses Currently, the CRA is challenging professional fees being deducted as expenses on corporate tax returns, but we expect that they will move on to another area once this area is exhausted. Again, for any expenses deducted, you must be able to support the amount paid in the form of an invoice and also substantiate the business purpose of the expense. Should you receive notification of any reviews, please contact us so that we can ensure the information provided is accurate when submitted to the CRA within the time limits. |
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Everything You Need to Know on Surviving a Tax Audit Let's say you have done your due diligence and and filed your taxes on time. You receive your notice of assessment in the mail but now there is an additional letter from the CRA with a request to see more backup. Don't panic. Here are some tips on how to successfully survive a tax audit. If an expense is claimed and submitted electronically, the Canada Revenue Agency may ask you to produce your reciepts for this expense to prove that you are eligible. We always encourage our clients to keep copies of their receipts in case this occurs. (Receipts should be kept for a minimum of six years.) Ensure that your papers are in order and respond by the deadline. If you do not do this, the CRA will refuse to declare your tax break as valid and may even chose to audit you. If You are Selected for an Audit Don't panic. The CRA will want to examine your records and books to ensure that you have paid the taxes you've owed for that year, as well as in the past. A desk audit may be conducted if the taxman is digging into a particular aspect of your return, this is especially common for business income, losses that have been declared, as well as if your return shows real estate transactions. Some times there are even field audits. This is when the CRA will send a representative to your place of work, or even your doorstep. So what next? Get organized and be cooperative. It is advised to seek professional help as soon as the audit letter has been received. Tax accountants with the proper qualifications, such as a firm with the Chartered Professional Accountant (CPA) designation can help ensure that the audit process is as painless as possible. Legal help is not typically recommended, however if you feel that things are getting off track it is suggested to lawyer up. One such instance may be when the CRA decides to do a net-worth audit. If it is determined that the CRA is correct and you are not, it is advised to admit the error and pay quickly to minimize interest and penalties. https://globalnews.ca/news/4161436/cra-audit-what-to-do/ |
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"For some, doing taxes is like ripping off a Band-Aid. The sooner you're done with it, the better." But we can help! |
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Preparing your Business for International Expansion When a business does well, an owner may consider expanding internationally as it can help diversify and find new opportunities in other fast-growing markets. However, making this move can be tricky and furthermore requires careful planning and logic. If you are considering international expansion, planning and advice are critical. First, readiness for expansion must be assessed, markets must be selected, an entry planned, and financing needs are to be considered. Once all of these factors have been thought out, a plan can be executed. Note that patience is key when expanding a business. It can often take at least six to eight quarters for an international expansion to occur. https://www.bdc.ca/en/articles-tools/marketing-sales-export/exportation/pages/how-get-ready-expand-abroad.aspx |
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"Money can't buy happiness, but it keeps the kids in touch." |
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CRA Falls Behind as uncollected Taxes Owed rises to 44 Billion The amount of tax that Canadians admit to owing but have not paid rose to a new record of $43.8 billion this year. Some may find this shocking as the Liberal Government promised to stabilize that sum.CBC news conducted an internal CRA projection and determined that this amount of unpaid tax is set to hit more than $47 billion by 2020. It has also been determined that there has been a steady increase to this debt (approximately $2 billion annually) since the Liberals came in to power. Another factor of this rising debt also appears to be linked to major staff reductions within the CRA. https://www.cbc.ca/news/politics/tax-debt-liberal-budget-collections-1.4715967 |
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Effective September 1st, Shirley Dalrymple will be retiring. We want to thank her for her years of dedication and will miss her greatly. We will be hosting an open house reception from 3pm-6pm on September 18th to officially say our goodbyes. All are welcome! Please RSVP by September 11th to christine@wrayca.com. |
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