May 2025 Poll

Does the Liberal promise expected soon to cut the lowest personal income tax rate by 1% to 14%,  go far enough to help Canadians impacted by high costs?

The Canada Revenue Agency (CRA) announced the prescribed annual interest rates for the 4th quarter, which remain unchanged from all the previous quarters in 2011. Note that at a 1% prescribed rate, investors who wish to transfer capital to their spouses using a bona fide inter-spousal loan should consider making those plans now, to lock in those low rates for the life of the loan, particularly if they fear interest rates will rise in the future. The rates have held steady since the second quarter of 2009: 2009 2010 2011 Quarter 1 2 3 4 1 2 3 4 1 2 3 4 Overdue Taxes 6% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% CPP/EI  Premiums 3% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Tax Overpayments 4% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Tax Overpayments (Corporate) - - - - - - 1% 1% 1% 1% 1% 1% Taxable Benefits, Low or No Interest Loans 1% 1% 1% 1% 1% 1% 1% 1% 1%   1%   1% 1%   Additional Educational Resources:

Evelyn Jacks, Your Money, Your Life   To read the latest blog entry by Evelyn Jacks: To Recover Financially, Protect Financial Stability <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" />   

Back to School Road Rage? With workers returning from summer holidays and students heading back to school, you may notice heavier traffic on the road this September. You'd think nerves would be more frayed, and yet, true to Canadian style, we continue to be happy campers about the commute, according to Stats Canada, which recently reported (say when) that in 2010 Canadian commuters were generally satisfied with their average commute time of 26 minutes. The study also found that there was a correlation between commuting time and stress. 36% of workers who traveled more than 45 minutes to work found that most days were quite or extremely stressful. Only 23% of workers who traveled less than 15 minutes to work found that most days were stressful. Therefore it's not surprising that 23% of public transit users were dissatisfied with their commute, compared with 18% of car commuters. Public transit users take longer on average to get to work, which an average 44 minute commute time. This study included all modes of transportation. 12% of commuters took public transit, while 6% walked or bicycled. Overall, only 15% of study participants were dissatisfied with the length of their commute time. Most of those dissatisfied with their commute live in one of the larger census metropolitan areas (CMAs) which have a population of more than 1 million. Not surprisingly, commuters in the CMAs of Toronto had the longest average commute time of 33 minutes, while those in Vancouver averaged 30 minutes, and 31 minutes in Montreal. Half of commuters in Toronto and Montreal traveled over 30 minutes to get to work, with one quarter traveling 45 minutes or more. The data for this study was gathered from the 2010 General Social Survey on time use, and is based on an article in Canadian Social Trends.   Additional Educational Resources:  

With the recent devastation of Hurrican Irene, many Canadians have been left to pick up the pieces. It is also difficult to forget the wildfires, tornados, and flooding that have impacted thousands the past summer.Canadians who have suffered hardship should be aware that under the taxpayer relief provisions CRA can extend leniency, as it recently reminded taxpayers in a news release. Specifically, when taxpayers are unable to file a return or make a payment on time due to circumstances beyond their control, such as a natural disaster, interest and/or penalties can be waived or cancelled. The court system can also help with fairness issues around the issue of filing deadlines. For example, following a 2010 case (Lacroix v The Queen, 2010 TCC 160), it was stated, to the corporate taxpayer's financial relief, that "unclaimed tax credits can be applied beyond the limitation period to reduce the net tax assessedî. For those who have already filed their returns in a timely manner, but did not take advantage of provisions available, claims may still be submitted. Additional Educational Resources: EverGreen, Make Sure It's Deductible - Fourth Edition

At a time when investment returns are low and markets volatile, CRA has been busy handing out stiff penalties for late filing, and invoking other weapons for collection, albeit not always successfully. Tax and financial planners can help preserve well-laid plans for savings, by reminding procrastinators to file sooner rather than later, in order to preserve capital.   There can be seriousóand expensive--consequences for failing to file your taxes on time. Late filers can face not only fines, but must pay the full amount of taxes owing, interest, and any civil penalties that may be assessed by the CRA. A Mission, BC drywaller, for example, was recently fined $5,000 for not filing returns. He was given one year to pay the fine, which resulted from not filing returns on personal income tax and GST from 2006-2008. But in another case, CRA lost, having used the GAAR (General Anti-Avoidance Rule) to deemed that a non-resident, Lehigh Cement Ltd., was wrongly withholding tax payable on interest income. Lehigh, however, won this round. While the company had used the rules in a novel way, the court concurred none-the-less they used them correctly, stating that by "the fact that an exemption may be claimed in an unforeseen or novel manner, as may have occurred in this case, does not necessarily mean that the claim is a misuse of the exemptionî. Taxpayers feeling guilty for not filing returns or reporting all of their income, should also be encouraged to voluntarily correct their tax affairs. A valid disclosure must be made before any compliance action by CRA against you. While penalties can be avoided, be aware taxes owing, plus interest, must be paid. (However, interest may be waived in hardship cases (see KBR article 'Tap Into Fairness Relief to Cancel Penalities').Additional Educational Resources: Essential Tax Facts, Tax Planning for the Corporate Owner Manager  

<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" /> The Finance Department released legislative changes that describe the proposed Income Tax Amendments announced on June 6, 2011. Of interest and significant complexity are the provisions around the following changes: Corporations: Limit on Deferral of Tax (ITA Section 34.2 and 34.3). These new sections were necessary to remove reference to the 10-year reserving period on stub period income, which has expired and to limit the deferral of tax on corporate income earned through partnership. The notes describe two new sections related to "adjusted stub periodî accrual rules and related "qualifying transitional incomeî when a partnership has a fiscal period different from that of the corporation. The income inclusion rules will not, however, apply to a corporation which is bankrupt. Special rules for cases where a foreign affiliate is a member of a partnership, or a multi-tier partnership structure are also outlined. Tax Deferred TransactionsóFlow Through Shares. Previously, tax exempt capital gains resulted with the donation of flow through shares. Now, a class of flow through shares, defined as any shares of the capital stock of a company, or certain interests in a partnership, if any other shares of the class are a flow through share, acquired after March 22, 2011. The taxpayer will be required to pay tax at normal capital gains rates on capital gains realized on these dispositions if there is a positive balance in the pool defined as the "exemption thresholdî. The gains will reduce the balance in that threshold; once it has been reduced to nil, any gain from the donation of publicly-listed shares to a qualified donee will be exempt from tax. The effect is that the exemption from tax will only occur to the extent that the "cumulative gains limitî in respect of the dispositions of share of that class of shares acquired under a flow through share agreement exceed the original cost of the flow through shares.   Additional Education Resources: Introduction to Corporate Tax, Advanced Tax Preparation and Research