Mark Your Calendar: Critical Deadlines for May and June

Tax season never truly ends, it seems, as there are many more upcoming tax filing, investment planning and education milestones to discuss with your clients over the next six months. Check out our handy checklist below and then test yourself – what are the conversation openers you’ll use and with which clients? It’s your opportunity to shine with every member of the household:

As we discussed in our last issue of Breaking Tax and Investment News, with the end of the year now past us, it is worthwhile to review changes that have occurred during 2009 that may impact you or your clients at tax filing time.   Following are recent tax changes specific to those who are employed. It is important to review various tax provisions available to employees in this year of change, as the economic downturn has led to numerous job losses, especially in the automotive, media and manufacturing sectors. Travel Within a Municipality or Metropolitan Area. Starting with tax year 2009, allowances paid for an employee to travel within the municipality or metropolitan area may be excluded from income if the allowance is paid primarily for the benefit of the employer. Certain criteria must be met including that the vehicle is specifically designed or suited for the employer's business and essential for the performance of the employee's duties, and that there are legitimate business reasons why the employee must take the vehicle home at night. Gifts and Awards. Effective for 2010, the CRA's policies regarding gifts and awards paid to employees will be as follows: ï Non-cash gifts and non-cash awards to an arm's length employee, regardless of number, will be non-taxable to the extent that the total aggregate value of all non-cash gifts and awards to that employee for the year is less than $500.   ï In addition, a separate non-cash long service/anniversary award may also qualify for non-taxable status to the extent its total value is $500 or less.   ï For the purposes of applying the $500 thresholds, the annual gifts and awards threshold and the long service/anniversary awards threshold are separate. Nominal Value Gifts. Items of an immaterial or nominal value, such as coffee, tea, T-shirts with employer logos, mugs, plaques, trophies, etc., will not be considered a taxable benefit to employees.   All of these amounts will already be included in Box 14 of the T4 slip, however, it's good to know about them as you negotiate your compensation from your employer. Transit Passes. Effective for 2010, note the following for employees of transit companies (including bus, streetcar, subway, commuter trains or buses and ferry services): ï Passes for the exclusive use of the employee will be tax-free. ï Free or discounted passes for the use of the employee's family will be a taxable benefit. 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 <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" />Tax Efficient Investment Income Planning                      Master Your Real Wealth      Master Your Investment in the Family Business

The Knowledge Bureau management and staff would like to extend warm holiday wishes to all Knowledge Bureau clients, students and faculty members and all the best for a happy and healthy 2010. Please note that The Knowledge Bureau's offices will be closed for the holiday season, beginning on December 24th and will open with reduced holiday hours from December 28th - 30th. The offices will be open with regular hours beginning on Monday, January 4th, 2010.      Student support questions received from December 24th - 27th will be responded to by end of day December 28th.   The Knowledge Bureau Management and Staff

The Minister of Finance, The Honourable Jim Flaherty, has announced that consultations with Canadians will take place nationally in order that the country can be led into an economic recovery with the help of measures in the 2010 Federal Budget. Flaherty plans to continue with the implementation of measures introduced through the Economic Action Plan introduced in January 2009. Some of the items introduced under the Action Plan are: Income tax reductions put in place since April 2009 Increased child benefits beginning mid 2009 Availability of the Home Renovation Tax Credit of up to $1,350 for renovations completed by February 1, 2010 Increased Working Income Tax Benefits of up to $925 per individual or $1,680 per couple for low income Canadians to access Increased small business deduction Increased capital cost allowances for specific purchases such as computers Minister Flaherty advises "We would like to hear from Canadians on how best to implement the remaining stimulus measures in Canada's Economic Plan and to keep on track towards a stronger economic future.î The Government will be looking for answers to the following: To what level has your industry or community been impacted by measures provided by the Economic Action Plan? Do you have any suggestions for making the making the various programs more effective? Are there other steps that could be taken in order for the Canadian economy to remain competitive? Can you suggest a time period over which the Government can rebalance the budget? The Federal Government will be holding consultations with Canadians across the nation, and in addition individuals can go on-line and and submit their views by linking here. Educational Resource: For the latest budget information sign up now to Canada's leading  online tax reference for taxpayers, financial advisors and their clients: EverGreen Explanatory Notes.

With the end of the year fast approaching, it is worthwhile to review changes that have occurred during 2009 that may impact you or your clients at tax filing time.   Following are recent tax changes specific to those who are employed. It is important to review various tax provisions available to employees in this year of change, as the economic downturn has led to numerous job losses, especially in the automotive, media and manufacturing sectors. EI Benefits. Begin by reviewing income benefits from Employment Insurance when you file your return, in tandem with the possibility of a related clawback of those benefits if you were a high income earner. One of the reasons for this is that all regular EI benefit entitlements were extended by five extra weeks by the January 27, 2009 budget. In addition, that budget increased the maximum benefit entitlement period to 50 weeks from 45 weeks. You will want to learn more about offsetting taxable amounts from this source as well as severance packages with Registered Retirement Savings Plan (RRSP) contributions, in advance of the RRSP contribution deadline of March 1. Canada Employment Credit. This credit is available to employees to offset employment expenses, and in 2009 the credit has been enhanced to $1,044. Wage Earner Protection Program. The government extended this program to cover severance and termination pay owed to workers of companies that declared bankruptcy. Employment Perks. Negotiating new employment contracts, or corporate owner-manager compensation planning should include a review of the taxation of perks and benefits, some of which have also been changed this year. Employees will be treated to new tax free perks of employment under the following circumstances: 1. Loyalty Programs (Frequent Flyer Points) Starting in 2009, the CRA will no longer require frequent flyer points earned while flying on ­business to be included in an employee's income, so long as three ­conditions exist: ï the points are not converted to cash, ï the arrangement is not an alternate form of remuneration, or ï the arrangement is not for tax avoidance purposes. Where an employer controls the points (e.g., a company credit card), the employer will continue to be required to report the fair market value of any benefits received by the employee as income on the employee's T4 slip when the points are redeemed. 2. Overtime Meals and Allowances Provided to Employees. Beginning with tax year 2009 no taxable benefit will arise if: ï the value of the meal or meal allowance provided to an employee is reasonable (a value of up to $17 will generally be considered ­reasonable), ï the employee works two or more hours of overtime right before or right after his or her scheduled hours of work, and ï the overtime is infrequent and occasional in nature; that is, less than three times a week. If overtime occurs on a frequent basis or becomes the norm, the CRA will consider the overtime meal allowances to be a taxable benefit in the category of additional remuneration. Join us in the next edition of Breaking Tax and Investment News for more tax changes that will impact employees.   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:   <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" />  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    

It's time to start your tax planning for NEXT year! Employers should ensure they include a copy of the new TD1 forms to all employees with their year end pay cheques in order that the correct source deductions are deducted for 2010. Form TD1, Personal Tax Credits Return, is completed by employees and provided to their employers. The forms are used by the employer to determine the amount of federal and provincial or territorial tax that is to be deducted or withheld from the employee's employment income. Employees will normally complete a Federal TD1 plus a TD1 for the province or territory of employment. The Federal TD1 has been revised to include the increased non-refundable tax credits available to taxpayers at the end of the year. The basic personal amount and spousal amount have now been increased to $10,382 and the amount that may be claimed for every child born in 1993 or later will be $2,101. For a link to the CRA website and the updated Federal and Provincial TD1's click here. Form T1213 is to be completed by taxpayers when requesting reduced tax deductions at source for deductions or non-refundable tax credits that don't appear on Form TD1, Personal Tax Credits Return. For example, if there are registered retirement savings plan (RRSP) contributions being made outside of contributions made through your employer or there are support payments made and tax deductions at source should be lowered due to these deductions, it is appropriate for a taxpayer to use Form T1213 to request reduced tax deductions at source for the tax year. For a copy of Form T1213, click here. For more tax tips, purchase a copy of Essential Tax Facts written by The Knowledge Bureau's President, Evelyn Jacks, to learn how to ace your 2009 tax return and save money all year long. 

" People are getting older, and many will lose legal capacity. Make sure all of your clientsí- and their parentsí planning documents are in place. You will expand your market and grow your book - and make your clientsí lives much easier - by making this part of your regular client process."   David Christianson, speaking at the 2009 Distinguished Advisor Conference in Tucson, Arizona By David Christianson, BA, RFP, CFP, TEP The Need:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com🏢office" />   The majority of advisorsí clients are boomers, whose parents are aging.  As well, many advisors have a clientele made up increasingly of older, retired people for whom estate planning issues are becoming more and more important.   The passing of an expected trillion dollars of estate assets over the next 20 years has been well documented.  What has been largely ignored, however, are the issues of incapacity and diminished capacity planning.  Few advisors have either a plan or experience in dealing with substitute decision makers (SDMs), and these parties ñ family members acting as attorneys or committees ñ may be similarly unprepared for their tasks.  They need the leadership and the help of advisors who are properly trained and prepared.   Two million Canadians are caring for older relatives and by 2031, one in four Canadians will be over the age of 65.   The Risk:   Failure to prepare properly for the incapacity of clients can have the following negative effects: Severe disruption and impairment to the lifestyle enjoyed by the client; Compromise to the level of care potentially available; Great stress for the family and often conflict between family members; Significant loss of assets under management for the advisor; Exposure to legal proceedings against SDM and/or advisor, if proper protocols are not followed. Join us in the next edition of Breaking Tax and Investment News for opportunities and processes to ensure a smooth transition for your clients with estate planning issues.   David Christianson is a Knowledge Bureau faculty member.