Now that we are in 2011, it is time to gather your documents together for your 2010 tax return if you have not already done so.
Here are some random suggestions and due dates that you might find helpful.
Most slips including the T4s T4As and T5s need to be issued by your employer by Feb. 28, but most employers will try to issue them before that date. The T3s and the partnership slips do not need to be issued until March 31.
If you are considering reducing your taxable income by purchasing an RRSP, you have until March 1, 2011, to do that.
Other receipts that you may want to include for tax purposes are moving expenses, child care expenses, safety deposit box fees, charitable donation receipts, political contributions, medical expenses, alimony, employment expenses, union dues, professional dues, carrying charges and interest expenses for investments, public transit and children’s fitness.
If you are a senior and your income is above $66,733, you will lose all or a part of your old age security.
If your income is over $32,506 you will begin to lose your age tax credit.
If you are disabled please have your doctor fill out form T2201 and send that in to CRA so that you will be able to deduct the disability tax credit when filing your return.
If your disability occurred in a prior year, you can ask that the credit be backdated for the prior year(s) and have your tax returns amended.
If you have joined a weight loss clinic for the treatment of obesity where the services are provided by a medical practitioner, these fees are deductible.
If you need to achieve some income splitting consider contributing to a spousal RRSP.
Items that were deductible last year and are not this year are the home renovation expenses. That credit did not get carried over to 2010.
Some medical expenses that are considered cosmetic whether they are surgical or not, are not deductible.
Contributions to private health service plans PHSP are deductible subject to some conditions.
Separate your personal expenses from your business expenses.
If you drive an automobile, make sure that your mileage log is up to date.
If you operate out of your home calculate the percentage of your home that is used for business and gather up the receipts for utilities, mortgage interest, insurance and property taxes for a deduction.
Incorporated Small Business
If you have family working for you, they may not be required to contribute to EI and you may be able to get a refund of EI premiums paid on their behalf.
You may be able to bonus out excess earnings to the shareholder/employee, however this may not be the most beneficial tax savings for you considering the reduction in corporate tax rates.
Your accountant will need to provide you with the best analysis.
It may be a better idea to issue dividends from retained earnings or from the capital dividend account to remove excess cash from the corporation.
If you wish to contribute to the CPP or RRSP, you will need to receive salary to create the earned income threshold.
Other Items of Interest
Truckers meal deduction has been increased to 75 per cent for truckers and their employers.
The new T4 slip will now be used to report retiring allowances.
Wage replacement plans no longer qualify for CPP.
Instead of mailing out your GST/HST remittance forms, expect to receive pre-recorded phone messages from CRA reminding you that your returns are due to be filed (at least for the first return). The RRSP contribution limit for 2010 is $22,000.
The CRA cancelled the status of Biathlon Canada and Canadian Lacrosse Association as Registered Canadian Amateur Athletic Associations.
Last year, the CRA also revoked 593 registered charities because they did not file their annual returns. They also revoked 41 for other causes and completed 718 registered charity audits.
The Not for Profit Corporations Act received Royal Assent on June 23, 2009, and will be implemented in three phases.
Every charity must move towards the new Act by the end of the three years to avoid dissolution.
There are many changes to member and director matters, agreements, financial disclosure and other matters that need to be addressed.
Gabriele Banka is a Certified General Accountant and the owner of Banka & Company Inc.