www.HandT.ca
handt@handt.ca

 Tel: 905-858-0775
Fax: 905-858-8645

Attention please!

For your benefit we have recently installed a new website. We put on it much information useful to existing—besides new—customers. Visit it to access a treasure of resources, e.g. scores of Tax Tips, most important do’s and don’ts for small business owners/managers, lists of papers required to get business books or tax returns prepared properly, good habits for doing small business paper work,  important Canada Revenue Agency forms and phone numbers and urgent compliance deadlines.  The site also takes you to many calculators to evaluate loan payments, returns on investments, putting cash in mortgages versus RRSP etc. Visit the site habitually. Let us know any suggestions for making it more useful to you


You are a very good customer!

Audit victim Mr. John Borg says,” Looking for an Accountant?  Don’t go to one with a big sign,’ Guaranteed Refund’; that may get you in trouble in the future. I’ve been through it, top to bottom. Eventually I met the team of H&T Accounting Services for getting professional accounting. They provided forensic level accounting, very little mistakes and orderly books.

With H&T working for you, you’ll have quality service, timely results, professionals on your side working for strong audit defense—no other will direct you better to success. The longer you are with this firm, the more vigorous will be the growth and success of your business. If you are looking for an accountant, trust me, H&T are the best, all others can be hardly Second Best!!!!”

Mr. Borg, thank you for recognizing our hard work.

Urgent Deadline

Personal tax returns must be filed by May 2nd unless you or your spouse owns a non-corporate business.

 Tax saving plans (TSPs) for employees 

• Accounting fees: Some tax payers are not sure how much of the fees paid accountants are tax deductible.  Except for some 65 dollars, fees for preparing the personal tax return, most other fees are tax deductible. For example, if you paid $865, of which $65 was for the tax return and the remainder for accounting of your investments, business or rental operation, you may claim a deduction of $800.  If you are in a high tax bracket, your tax refund/savings would increase by approximately $350 and your after-tax cost of would be only $515. Ensure you claim the maximum possible.
• Compensation package: When negotiating this, prefer taking benefits that are not taxable.
• Commission income - for: If a part of your income was commissions, you may be eligible for many claims—more information on the TSPs for Commission Earners.
• Donation receipts: You may get into serious trouble if you have a donation receipt showing an amount more than what you actually paid.
• Foreign property: If you own a property worth $100,000 or more, you must disclose it on your personal tax return.
• Interest on loans: If you borrowed funds through a loan or line of credit to make any investments—other than RRSP, interest on this loan is deductible if audit trails are set up properly.
• Interest on your mortgage: If you have investments while still having a mortgage on your house, the interest on mortgage may be deductible if audit trails are set up properly.

• Investment income: If tax brackets of two spouses are different, the one with high income should lend money to the other to make investments. The income earned will be subject to less tax.
• Low income students - for: Many of them believe there is no need to file returns, because they have no taxes payable. In fact by filing the return and claiming the tuition fees, you may accumulate much tax credits to reduce your future taxes substantially. You may also transfer a part of credits to your parents to reduce their taxes.  
• Missing papers (MPs) – solutions for: MPs usually leads to missing deductions and hence paying more tax. If you have some papers missing when preparing books tax returns, include estimates of the amounts—that were to be found on those papers. To save penalties, do not delay filing returns. If estimates turn out far off, the amounts can be fixed later by filing adjustments to returns. A category of important MPs is Notices of Assessment (also read paragraph with this title). We strive to—and help you—procure the MPs somehow. If it is hard or impossible to procure a specific paper we will tell you which alternative substitute may suffice.
• Missing information (MI) – solutions for: Many times you do not know you are missing papers and which ones. Missing information (MI) helps you determine which papers are missing. Unprofessional bookkeepers and tax return preparers undertake none or minimal MI determination because it takes time and requires special skills. We strive to procure the MI somehow.
• Notices of Assessment (NOAs) – for saving taxes: After filing your personal tax returns, you receive from the Canada Revenue Agency (CRA) or other government offices certain documents called Notices of Assessment. They are very important for many reasons. Send us copies of your NOAs as soon as you receive. They help us confirm that all amounts we used in preparing your returns have been accepted. If we find any discrepancies, we discuss these with you. We also inform you of their effect on your taxes payable or tax refunds receivable. Unprofessional tax return preparers do not care to do all this because it takes much time. NOAs also contain important information to prepare your future returns properly—which includes producing more tax savings for you. NOAs are also usually required in applying for loans.
• Retirement allowance - for: Consider making direct transfer of the allowance to an RRSP—up to your contribution limit—to avoid paying withholding tax.
• Save late filing penalty: To save late filing penalties, file your tax returns by April 30th. If some papers are missing at the time of filing, make an estimate of the missing information and file the return. The estimated amount can be later fixed by filing an Adjustment.
• Tax Papers – often forgotten: Do bring us the often-forgotten important receipts regarding: Universal child benefit, Tuition fees, Children fitness, Trade tools,

Student loan interest, Public transit passes, Interest on investment loan, Safety deposit box and Property tax. 

• Taxes withheld on wages - reduce: In beginning weeks of a calendar year inform your employer of some unusual deductible expenses you will be incurring this year, e.g. tuition fees, RRSP contribution. This will reduce your taxes withheld from the pay checks.
• Transit passes: Retain receipts: you can also claim these expenses for your spouse, and children under 19. Ten trips a week ticket will not qualify. You need a weekly pass allowing unlimited travel. Additionally you should have many passes to cover all weeks of a month to be treated equivalent of monthly passes, the ones that qualify easily.
• Very low income earners - for: Many of them believe they need not file returns because they have no taxes payable. In fact, you may receive some tax refund.
• Withdraw RRSP funds – tax efficiently: If your family gets short on cash, you may draw funds from your RRSP. Just plan to draw them in a year when you have less income; this will minimize taxes owed on withdrawals.  You will pay no tax if the withdrawals are for some reasons like going to school or buying your first home.

Bookkeeper fined for tax evasion
Doreen Davis and a related corporation Dead Reckoning Enterprises Inc. (Dead Reckoning) were sentenced in November 2010 for evading personal income tax and goods and services tax (GST). She was fined a total of $90,728m. Besides, as a director she was convicted of GST evasion and failure to file the 2000 to 2003 corporate income tax returns. She was fined an additional $28,511 for those offences. The corporation was also sentenced for GST evasion and failure to file tax returns. The corporation was fined a total of $28,511.
Through Dead Reckoning, Davis provided film production accounting services to companies for the years 2000 to 2004. Rather than reporting the revenues and GST collected, Davis and her partner used those revenues for personal expenditures including rent, personal credit card charges, boat moorage and life, home and auto insurance. In total, she failed to report $517,360 personal income and to remit $5,728 in GST. Dead Reckoning failed to file income tax returns and report $24,511 in GST.
When you are convicted of tax evasion, besides court fines you must pay the taxes, interest and any penalties owed. If convicted, the court may impose a fine of up to 200% of the federal tax evaded and a jail term of up to five years. Information source - CRA.