Tax Avoidance, Financial Stress & Well Being

Earlier this month, Statistics Canada published a report titled Stretching the Loonie: a time series analysis of financial difficulty and quality of life. The report is based on a nation-wide survey and the results are concerning. They reveal a serious trend and it is possible this is contributing to the late filing trend we are seeing this tax season.

Did you fail to file an accurate tax return or not file at all, but should have? The Canada Revenue Agency's (CRA) Voluntary Disclosures Program allows people to come forward and correct their tax information and avoid being penalized, criminally investigated and prosecuted. By encouraging taxpayers to come forward and correct the information they filed with the CRA, this Program helps protect the tax base and makes tax administration fair for all Canadians. If you make a full disclosure before we start any action or investigation, you may only have to pay the taxes owing, plus interest. If we come to you with compliance action first, you could end up paying penalties and fines, and even face jail time. Last year the CRA processed 8,244 disclosures for taxpayers who used the Voluntary Disclosures Program and got a second chance to comply with their tax obligations. Coming clean saved these taxpayers from an audit or a criminal investigation, which can result in penalties, fines, and even jail time. Their valid disclosures involved more than $525 million in taxes. For more information about the Voluntary Disclosures Program, visit www.cra.gc.ca/voluntarydisclosures.

NEW RRSP MAXIMUMS FOR 2009 Plan now to make your RRSP maximum contribution in 2009ó18% of earned income to a maximum of $21,000 (this is possible when earned income in 2008 was $116,667). MEAL AND VEHICLE RATES FOR 2008 CRA has released the new rates for meal and vehicle expenses. For meal expenses, the simplified rate is unchanged from 2007, a flat rate of $17 a meal or $51 per day, per person is allowed without receipts. For the simplified method of claiming vehicle expenses, the number of kilometres driven during the year may be multiplied by the appropriate cents/km rate below for the province in which travel begins. Province or territory Cents/kilometre Alberta 53.0 British Columbia 54.0 Manitoba 50.5 New Brunswick 52.0 Newfoundland and Labrador 55.5 Northwest Territories 64.0 Nova Scotia 52.5 Nunavut 64.0 Ontario 55.5 Prince Edward Island 52.5 Quebec 58.0 Saskatchewan 49.5 Yukon 66.0