SRJ Chartered Accountants wishes you a very Happy and Healthy New Year! This new monthly newsletter is designed to keep all our loyal clients up to date on the latest accounting and tax updates. Be sure to e-mail us at email@example.com or phone us at 647-725-2537 with any questions you may have as personal tax time is just around the corner.
New Year & New Home:
SRJ is proud to announce that it has added an additional office in 2014. Our new head office is located right near Toronto Pearson Airport at Unit 28, 2601 Matheson Blvd East, Mississauga, Ontario. Our new state of the art office also features dedicated board room and remote access technologies to keep better connected to our clients. We welcome you to drop on in to say hello. As a note of relief to all our clients not located near our new premises, we still have a full time dedicated downtown office along with professional client private meeting rooms located throughout several locations in the GTA.
SRJ is proud to announce that is has been chosen as the preferred vendor for the Ontario Chiropractic Association. As a result of this new partnership, SRJ is now a part of the OCA Advantages Program and all OCA members can take advantage of the benefits of the Advantages Program. Our next event with the OCA is on March 12, 2014 where we will be discussing about the Healthcare Industry. This event is open to all OCA members free of charge but be sure to register on their website as space is limited.
Inheritance Taxes- how to save your tax bill when passing down the family wealth
We all work hard to create a better life for ourselves and our families. It is a shame that without the proper tax planning many individuals pay a hefty tax bill upon the death of parents and the inheritance of the family fortunes. Let’s take a look at what we can do to alleviate the tax bill due to inheritances.
It is common for parents to transfer up to 50% of their home ownership to one or more individuals in an effort to save on probate fees. However, these “transfers” are considered to be a partial sale and if the child has their own principal residence, they will most likely be taxed at 50% of any future appreciation of the home.
Thus as a rule of thumb parents should not transfer the properties to their children until they die. The property is always a tax free transaction in the hands of the parents and the children will always have to bear the overall tax liability. Careful tax planning may include shifting the children’s principal residence to that of the parents or buying insurance to cover the prospective tax bill.
The transfer of the cottage results in the same tax liability of that of the home. Some tax planning experts recommend that cottages be transferred at an earlier time so that any future appreciation is earned in the hands of the children not the parents. Again, it is common to buy insurance to cover the prospective tax bill.
It is common for parents to change the name of their bank accounts to that of their children in order to avoid probate fees. However, the CRA deems that when a parent simply change the name of the account, but the child does not report any income from the account, there is no true joint tenancy and the individual will not be able to save any probate fees.
Thus, in order to save probate fees it is important that the child reports income from the account as well as have a document of intention as to how much income is to be reported by each child or children.
Jewellery and Antiques:
Many Canadians feel that jewellery and antiques are personal items that have a great deal of sentimental value and should not be the concern of the government. However, by trying to escape these items through this “backdoor” strategy is illegal according to the CRA as you are encouraging your children to evade taxes and the law.
Another problem occurs when these items are not listed clearly in the parent’s will and there are litigation issues between siblings for the fight of these goods.
One good strategy is to originally buy these goods in the name of the children so they will personally be responsible for any appreciation in value.
What new tax credits can I claim for the 2013 Tax Return?
As we are well past the holidays and into the new year, another tax season quickly approaches. With that said, it is increasingly important to take note of some of the new tax credits that may be available to us on our upcoming 2013 personal income tax returns. The following is a quick summary of some of the newly introduced tax credits that you may qualify for this year:
- First-time donor’s super credit – This new tax credit for first-time donors gives an extra 25% credit for cash donations when you claim your charitable donations on your tax return. This means you can get a 40% federal credit for up to $200 in donations and a 54% credit for the part of donations that is over $200 but not more than $1,000. This is in addition to the provincial portion of the tax credit.
- Family caregiver amount – If you have a dependant with an impairment in physical or mental functions, the additional amount you may be eligible to claim has increased to $2,040 when calculating certain non-refundable tax credits.
- Pooled registered pension plan (PRPP) – The PRPP is a new retirement savings option for individuals, including those who are self-employed. For more information, go to www.cra.gc.ca/prpp.
- Adoption expenses – The period to claim adoption expenses has been extended for adoptions finalized in 2013 and later years.
- Investment tax credit – Eligibility for the mineral exploration tax credit has been extended to flow?through share agreements entered into before April 1, 2014.
- Tax-free savings account (TFSA) – The annual TFSA dollar limit increased to $5,500 on January 1, 2013, for the 2013 contribution year, and remains at that amount for the 2014 contribution year.
For more information on how these tax credits may apply to you, please feel free to email one of our Partners directly.
SRJ is proud to continue their relationship with the Real Estate Council of Ontario (RECO). SRJ is entering the 2nd year of their partnership with RECO to be the only CA firm in Ontario to offer Tax and Accounting Seminars to the Real Estate Industry in Ontario that will be counted towards their CE requirements. SRJ has in depth knowledge about the Ontario Real Estate Industry which has led us to become one of the foremost CA firms for Real Estate Professionals. If you think your brokerage might be interested in hosting a seminar, please contact Junaid Usmani at Junaid.firstname.lastname@example.org.
SRJ is proud to announce the addition of a new member of our team. Kevin Fok is a 4th year University of Waterloo Accounting Student who is working for SRJ on a 8 month co-op term. He is working as a staff accountant during his term and will be responsible for looking after many of our accounting clients. He has previously worked at the Ontario Ministry of Finance. We are excited to have him on our team for this upcoming busy season! Feel free to congratulate him directly at email@example.com
SRJ’s Google + and Yelp Pages need your help!!!:
We want to sincerely thank you all for your support and business. We have grown so rapidly due to the loyal patronage of our clients and their fantastic word of mouth referrals.
However, as many of you know an important part of our business has become our presence on the web and providing great content on accounting and tax issues for free through our blog, website and various social media outlets.
We can also use your help today by letting others know about your positive experiences with our firm. It would be greatly appreciated if you could login to your yelp & Google+ account and leave a kind review for us.
Links to our pages are below:
February 28th is the 2013 RRSP Deadline!
Reminder! RRSP Contribution deadline for the 2013 tax year is Monday, March 3, 2014. Don’t miss the opportunity to lower your taxes and build your wealth.
February Schedule of Events
Please mark your Calendars for the following SRJ/Tax Events in the month of February:
- February 28th, 2014- T4 Submission Deadline ( self-employed)
- March 3, 2014- 2013 RRSP Deadline
- February 14th, 2014- Valentine’s day- spend with your loved one 😉