Claiming Medical Expenses: Free Healthcare?

Free Health Care? Did you know that Canadians spend on average more than $1,000 on medical expenses each year? It’s estimated that government programs, via our taxes, cover about 72% of medical expenses, which means that we pay for the rest. Your clients may be over-paying on their taxes because they don’t know about medical expense deductions. 

The third quarter prescribed rates have been announced by CRA and are continuing with the lowest prescribed rates in recent history - a 1% rate for certain taxable benefits and loans.  The biggest change is the interest rate paid to corporate taxpayers on overpayments, reduced to 1% from the 3% being paid to non-corporate taxpayers per the March 2010 Federal Budget (subject to Royal Assent).   The Canada Revenue Agency announced the prescribed annual interest rates that will apply to any amounts owed to the CRA and to any amounts the CRA owes to individuals and corporate and non-corporate taxpayers. These rates are calculated quarterly in accordance with applicable legislation and will be in effect from July 1, 2010, to September 30, 2010.   Income tax The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance Premiums will be 5%. The interest rate paid on overpayments by corporate taxpayers will be 1%. The interest rate paid on overpayments by non-corporate taxpayers will be 3%. The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%. Other taxes The interest rate on overdue and overpaid remittances for the following taxes will be: Tax and Duty Overdue remittances Overpaid remittances Corporate/Non-Corporate GST 5% 1% / 3% HST 5% 1% / 3% Air Travellers Security Charge 5% 1% / 3% Excise Tax (non GST) 5% 1% / 3% Excise Duty (except Brewer Licensees) 5% 1% / 3% Excise Duty (Brewer Licensees) 3% N/A Softwood Lumber Products Export Charge 5% 1% / 3%   <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" />  Educational Resource: For more information on tax planning provisions and compliance requirements subscribe to The Knowledge Bureau's online tax reference for taxpayers, financial advisors and their clients: EverGreen Explanatory Notes.  

As most advisors are aware, when it comes to taxes, it's not only about getting those returns filed on time, but most importantly, it's about storage and retrieval! After all the tax filing deadlines are met, the "off-season" is fraught with the potential for tax audit activity by CRA and the need to adjust returns for omissions, missed slips, and of course, the inevitable errors made during the rush! This can cause stress and strife, especially for couples. What should you do if you missed an important provision or document? Most advisors will tell their clients to come back and see them immediately upon discovery. They will also cover an important technique in avoiding expensive gross negligence or tax evasion penalties: voluntary compliance (you tell CRA about errors or omissions before they tell you, on that off-chance that you overstated deductions or credits, or understated income.) The following filing milestones should also be noted to answer these and other questions about tax compliance responsibilities all year long: Adjusting a return to correct an error or omission: 10 years following the end of the relevant taxation year. Appeals with the Tax Court: No later than 90 days from the date of mailing of a Notice of Reassessment or confirmation of an assessment No earlier than 90 days following the date of mailing of a Notice of Objection, if CRA has not responded to the Objection Collection of taxes owing: Generally, 10 years from the date of assessment. A collection action cannot generally be undertaken until 90 days after the related Notice of Assessment or Reassessment has been mailed. Where a Notice of Objection has been filed, or an appeal has been made to the Tax Court, collection of the tax debt will be suspended until the dispute is finalized. Filing Deadlines: Final Returns of Deceased Taxpayers: Where the individual (unless self-employed or the spouse of a self-employed taxpayer) dies before October, April 30 Where the individual dies after September, 6 months following death Where the individual is self-employed or the spouse of a self-employed individual, the later of June 15 and six months following death The due date for the surviving spouse is the same as the due date for the deceased taxpayer To defer payment of income tax by making up to 10 equal consecutive annual payments: first instalment must be paid on or before the day on which payment of tax was otherwise payable. Filing Deadlines: Trust Returns March 31 for inter vivos trusts No later than 12 months following death for testamentary trusts, and annually thereafter Filing Deadlines: Corporations: 6 months following the end of the taxation year Instalment Payments: Corporations: On or before the last day of each month Objection to a Notice of Assessment or Reassessment: Generally, 90 days from the date of mailing of the Notice Individuals and testamentary trusts can file within one year of the due date of the related return Record retention, Individuals: Generally, six years from the end of related taxation year. Record retention, Corporations: Permanent corporate records must be retained for two years following dissolution. Registered investments: Manage registered investment accounts around these milestones: Contributions, RRSP: During the calendar year or within 60 days of the year end Deduction, Refund of Unused RRSP Contributions: Form T746, with tax return filed for the year in which amounts were withdrawn. Refunds from the CRA: Generally, three years from the end of the related taxation year. However, individuals and testamentary trusts can apply for refunds for up to ten years following the end of the related taxation year. Where the application for a refund reflects a loss carryback, the application period is generally extended to six years, and to seven years for corporations that are not Canadian controlled private corporations. Refunds, Overdeducted CPP or EI Premiums: File separate from PD24 for each worker with T4 information return within the following time limits: CPP Contributions: no later than 4 years from end of year in which overpayment occurred EI Premiums: no later than 3 years from end of year in which overpayment occurred For more tax saving ideas, order Evelyn Jacks' Essential Tax Facts 2010 Edition.   For more information on tax planning provisions and compliance requirements subscribe to The Knowledge Bureau's online tax reference for taxpayers, financial advisors and their clients: EverGreen Explanatory Notes.

The Knowledge Bureau and the Association of Professional Accounting and Tax Consultants (APATC) are pleased to announce their strategic educational alliance which will bring professional development opportunities to APATC members through certificate courses leading to the prestigious Distinguished Financial Advisor (DFA) and Master Financial Advisor (MFA) designations in specialized studies including tax, retirement, investment and business services. "We are delighted to work more closely with APATC members on their educational needs and look forward to their participation in Distinguished Advisor Workshops, Distinguished Advisor Conferences and the certificate self study programs offered by The Knowledge Bureau,î says Evelyn Jacks, President of The Knowledge Bureau. "These programs are ideal for in-office team training in advance of the busy tax season as well as tax efficient business succession and retirement planning at the highest national standards.î David Jex, Executive Director of the Association of Professional Accounting and Tax Consultants, responded by saying "We are excited to be working with a respected organization like The Knowledge Bureau. This partnership will provide a wealth of educational opportunities for our members. At the same time, our organization offers the students and graduates of The Knowledge Bureau all the benefits of joining a professional organization for accounting and tax practitioners such as representation to government, networking with fellow practitioners and participation in our Errors and Omissions Insurance Group Plan.î Members of APATC can begin their learning experiences with a complimentary subscription to The Knowledge Bureau's national e-newsletter, Knowledge Bureau Report. "KBRî brings up-to-the-minute interpretive news reports on legislation and industry changes that affect daily business matters of interest to tax and accounting professionals. Summer School opportunities are also available on a 24/7 access basis for individual practitioners and in-office study groups. Students and graduates of The Knowledge Bureau can apply for membership in the APATC by contacting admin1@apatcinc.com or by completing the application at http://www.apatcinc.com/. The normal application fee of $30 plus GST/HST will be waived. ABOUT THE KNOWLEDGE BUREAU The Knowledge Bureau is a national designated education institute and publisher, which provides excellence in financial education to tax and financial advisors and their clients. The Knowledge Bureau's programs lead to certification and designation at a post-secondary level, as well as CE accreditation by most regulators and professional associations. For more information, please visit http://www.knowledgebureau.com/ or call 1-866-953-4769. ABOUT THE ASSOCIATION OF PROFESSIONAL ACCOUNTING AND TAX CONSULTANTS: The APATC is a national not-for-profit organization representing self-employed practitioners in the fields of accounting, bookkeeping and tax. Formed in 1982, the organization has been providing members with such benefits as information seminars on advanced tax and accounting issues, building and marketing a practice, and hiring and developing a professional staff. The APATC's Errors and Omissions Insurance Group Plan is among the most comprehensive available for non-designated practitioners. The Association also represents their members as an advocate with various levels of government.

A study released by Statistics Canada determined that by the age of nine, variations in scholastic achievement were affected by gender, province of residence and the income level for their household. The study also concluded there were significant differences based on their "education environmentî, which includes such factors as the parent's attitude toward education, their involvement in their child's school and school activities as well as their homework. Not surprisingly, children with lower attention spans tended to have academic performance that was lower than those that were better able to pay attention in class, and those with better attention skills were less likely to fail a grade or be in special education classes. The study also supports previous research which determined that the level of school readiness children bring when they first begin school will be a determining factor for future learning in the early years. "Children from households with very low income tended to have lower achievement than children from more affluent households on many measures.î Therefore, family wealth management is a critical component of financial planning with intergenerational consequences. Educational resources: For more information on tax planning provisions and compliance requirements subscribe to The Knowledge Bureau's online tax reference for taxpayers, financial advisors and their clients: EverGreen Explanatory Notes.  

A recently released report shows that complaints filed by taxpayers and small businesses against financial advisers and financial institutions increased at a record pace in 2009. The increase in cases launched with The Ombudsmen for Banking Services and Investments was likely due to the severe drops in stock market that had occurred during the year along with the global economic crisis. Cases related to the investment industry increased by over 70%, while those that were banking related showed a 21% increase. Complaints that were made on the investment side of the business were generally related to the suitability of advice provided by advisers. This information released in the report ties in the results provided in the Summary Report on Retirement Income Adequacy, released by the Department of Finance. The summary report determined that financial intermediaries have some work to do in helping investors reduce risk. Here are highlights from the report: The role of financial intermediaries is to help investors reduce risk and information costs as well as provide liquidity to investors when they need it. The objective is not to eliminate risk but to use it wisely and better distributed it in a sensible way. Some individuals may simply need government support and CPP/QPP benefits in retirement and the house they purchased during their working lives. Given the complexities involved in investment and estate-planning decisions, Canadians often pay for asset management and advice, with the most expensive fees associated with retail mutual funds (about 200 basis points). This comes at a cost to the income they earn on their investments. These costs are acceptable to the extent that they improve returns on their saving. The research suggests that active management does not provide returns on a persistent basis any better than passive management for both pension plans and mutual funds. Once taking into account active management costs, passive managed assets would provide superior returns. Individual investors do not seem to be advised sufficiently to invest in indexed and exchange-traded funds to improve fund performance. Nor is it clear as to why pension fund managers invest in active managed funds for the same reason. The research that has been undertaken to date does not explain why pension and retirement accounts are not invested more heavily in passively managed funds.   Educational Resources: Now is a good time to look at retirement income plans, family succession and estate plans in an attempt to better understand financial needs for a future which could certainly include tax increases on both income and capital. To learn more consider the following Educational Resources available from The Knowledge Bureau: ► Tax Efficient Retirement Income Planning ► Master Your Retirement ► Master Your Taxes ► Tax Efficient Investment Income Planning ► Master Your Real Wealth ► Master Your Investment in the Family Business

Thousands of Canadians have learned a painful lesson during the recent economic downturn ñ they've been living beyond their means. Vancouver-based financial planner Erika Penner addresses that issue, and what can be done about it, in her book, Master Your Real Wealth: How to live your life with financial security. She has revealed the top 10 ways Canadians can achieve financial security: 1. Understand what real wealth means. It's what's left after debt, taxes, inflation and costs. It's the money you need for your life now -- and in the future. To get more of it, you need to understand the value of every dollar spent and saved. 2. Get started ñ even if you're not in great financial shape. The sooner you start, the better your chances of growing your pot of gold. Record your assets and debts, income and expenses. You need to know where your money is going. Until you do, you won't be able to build real wealth. 3. Don't build your lifestyle with debt. Many Canadians have fallen into the trap of using too much credit. By not paying off their credit card balances each month, they're incurring large, non-deductible interest expense. That works against the accumulation of real wealth. 4. Use your income wisely. Employ it to acquire assets that will help build, not erode, your real wealth ñ after debt, taxes, costs and after inflation. 5. Don't go it alone. A team comprised of a financial planner, insurance specialist, accountant and lawyer may be required in various life stages ñ and can bring value that will really pay off. 6. Protect your wealth. Insurance isn't just an expense. It can protect the assets you've acquired and are growing. Fully understanding the insurance products you're buying is a key to achieving your financial goals. 7. Minimize your taxes. Simple strategies can save a lot of income taxes. You have the right to arrange your affairs to pay the least amount of tax the law will allow. Various products and income streams can all be taxed differently ñ and will either be better or worse for your financial situation. 8. Pay attention to inflation. Increasingly, Canadians are living as long in retirement as they worked. It's important that our retirement income increases to overcome inflation or that we have enough financial assets to draw upon. Inflation erodes future purchasing power. 9. Ensure you get value for your money. All products, including financial products, cost money. Their prices vary, as do the ways of paying for them. Don't be afraid to ask what something costs ñ and what you're getting in return. 10. Know what will bring you financial peace of mind. Know what's important for you to achieve financial peace of mind and access the people, products and processes that can help you attain it. Remember that it's always okay to ask for help. Master Your Real Wealth is the fourth in the Master Your Personal Finances books, published by The Knowledge Bureau, a leading Canadian financial services education institute. The Knowledge Bureau is a national publisher and certified post-secondary educational institute, which provides continuing professional development to practicing professionals in tax and financial services leading to certification and designation. For more information, please visit their website at http://www.knowledgebureau.com/.