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the plan do not need to be ‘qualified investments’. All contributions will be deductible for tax purposes but limited to the RRSP contribution limit for the year. Once again CRA will be conducting its letter
campaign. There will be two types of letters sent to tax payers across the country. The first letter will explain to tax payers the eligibility criteria for certain deductions that they have claimed on their recent tax return and will include a T1 Adjustment form should the tax payer decide that they may wish to amend their taxes. The second letter will contain the same information, but will also inform the tax payer that their return may be selected for audit. Tax payers who have rental income, business income, employment expenses or capital gains and losses from dispositions of publicly traded shares or mutual fund units will be targeted. The goal of the letter campaign is to educate the public and to promote compliance with the income tax act. Results published from the 2010 letter campaign indicated that the first letter caused 4% of all tax payers to make a change to their returns while the second letter caused 8% to make a change. The CPP changes came into effect this month
which are that all employed individuals aged 60 to 65 will be required to make CPP contributions even if the individual is receiving the CPP pension. Employed individuals aged 66 to 70 years of age who are receiving the CPP pension will be required to contribute to CPP unless they elect to stop their CPP contributions. They must fill in form CPT30 sending the original to the CRA and a copy to their employer. The election will take effect on the first of the month on which the employer receives the form. Self employed individuals will need to complete schedule 8 of their income tax return. Employees cannot contribute to CPP after the month that they turn 70.
The changes to the 2011 taxes are:
- Volunteer firefighters may be able to claim an amount of $3,000
- Parents may be able to claim a Children’s Arts Tax Credit for registration or membership of your child in a prescribed program of artistic, cultural, recreational or developmental activity. Your child must be under the age of 16 (18 if disabled) and the maximum expenditure would be $500 which would result in a tax credit of $75. To be an eligible program it must be at
least 8 consecutive weeks where 90% of activities are eligible or five consecutive days where more than 50% of activities are eligible. If the program is part of the school curriculum, it will not be eligible. Receipts must be provided by the organization offering the program. - The maximum limit of $10,000 per eligible dependent for medical expenses has been removed
- The mineral exploration tax credit has been extended yet another year for agreements entered into before April 1, 2012
- If you have a change in marital status you need to notify CRA of any change in status by the end of the month following the month in which your status changes, except in the case of separation when you need to be separated for 90 consecutive days before changing your status
- There have been changes to the examination fees that will qualify for the tuition amount and courses taken at a university outside of Canada will qualify for the tuition tax credit as long as it is at least 3 consecutive weeks.
Gabriele Banka is a Certified General Accountant and the owner of Banka & Company Inc. She can be reached at 250-763-4528 or
info@bankaco.com
35 Sales Professional
Holiday Trails Resorts has immediate openings for membership consultants. If you rank among the top in the vacation industry, then this could be for you. Company offers in-house financing. This is a great opportunity for some seasonal work.
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