Changes to Paper Filing Disempowering

Last tax season, only 7% of all Canadian tax filers filed on paper. The CRA is pushing for zero. It continues to steer the holdouts to digitized filing by adding lots of obstacles. Most recently, it is removing almost all the schedules from the tax return package it mails. This seems unfair to people who paper file because they can’t afford a computer and internet, distrust the security of online filing and those who are neither tax or computer literate. Here’s what they are up against:

Are you ready to celebrate and network with the best thought leadership in the tax and financial services at the 2024 Acuity Conference for Distinguished Advisors? Don’t miss the final opportunity for early-bird savings and reserve your spot by September 15, your tuition includes the Wine and Cheese Meet & Greet (exclusively for KB Designates), the Opening Reception and Knowledge Bureau Awards Dinner on Sunday, November 10. Then on November 11, you’re invited to join us the beautiful Rialto Theatre for the Acuity Gala for Distinguished Advisors. Details below:

Special Back to School Tax Tips Issue: It’s Back to School and that means it’s time to think about how the tax system works to help support parents, students and employers.  In this Special Knowledge Bureau Report, refresh your memory on the tax deductible do’s and don’ts when it comes to funding education through the tax system. There are two common ways to do so from investment accounts that may have been set up for these purposes.  First there are the Education Assistance Payments available from the Registered Education Savings Plan (RESP).  You may also consider the Lifelong Learning Plan under the RRSP withdrawal rules.  Here’s what to know:

Most people know that the tax system allows for a non-refundable tax credit on the T1 known as the Tuition Fee Amount. But, you need to have taxes payable for it to work to your advantage.  If you don’t the claim may be transferred from the student to the supporting individual – a parent, a spouse or a grandparent. But there is a maximum limited:  only $5000 can be transferred and unfortunately this amount is not indexed to inflation.  It’s a tax reform change that is long overdue as the cost of education has increased over the years.

This fall, more students may be stressed by debt and one of the reasons why is the repayment of the CESB.  In 2020, students could qualify for the Canada Emergency Student Benefit of $1,250 for a 4 week period for a maximum of 16 weeks.  An extra $750  for a total of $2000 per month was available if the applicant had a disability or dependants.  But now there is a cash flow problem for some students:

Effective August 1, new 30-year mortgage amortizations are available for first-time home buyers purchasing newly built homes. For our August poll we asked tax and financial professionals if this is an option they’d recommend to their clients, and there was an interesting mix of votes, 66% said “no”, but 34% said they would – their comments provide great insight for homeowners who may be eligible for this program.

The system is just wrong!  Think of the problems your clients are having with CRA and their TFSA audits.  The TFSA contribution room on the MyAccount portal does not coincide with actual contributions, yet CRA is giving.  Another issue is the lack of use, improper use and/or set up of health spending accounts which are so important to small business owners.  How do you make sure that these plans are audit proof? Lastly, there are inheritance/crypto scams out there. . .are you talking to your clients about this?  Find out more in this informative Society of Real Wealth Managers Round Table hosted by Doug Buss,  CLU, CPCA, CFP, CEA, RWM™, FDFS™ at the September 18 Virtual CE Summit.