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A thorough analysis of today’s financial news—delivered weekly to your inbox or via social media. As part of Knowledge Bureau’s interactive network, the Report covers current issues on the tax and financial services landscape and provides a wide range of professional benefits, including access to peer-to-peer blogs, opinion polls, online lessons, and vital industry information from Canada’s only multi-disciplinary financial educator.

This Week’s Edition of KBR:

August Poll

In your view, have recent federal tax changes contributed to economic resilience and powerful competition in Canada?
Yes: 26 votes
No: 176 votes

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Dreams on Hold for Andrew?

Andrew Brash Update Andrew Brash, Knowledge Bureau Faculty member is in the middle of climbing purgatory. The issues in Tibet and China's desire to take the Olympic flame to the top of Mt. Everest has had an impact on climbers from around the world. While the flame makes its way to the summit on the Tibet (north) side, the entire mountain has been 'closed'. This includes the Nepal side, leaving Andrew and his team in limbo. "Yes, as if any year on Everest wasn't weird, I've had to make special mention that this year really is peculiar. Guns, army, ambassadors, foreign secretaries ... admittedly there hasn't been much else to do but read while we wait for a certain group of people to summit this mountain on a certain route, carrying a certain piece of flaming hardware to the top. A tall order they've given themselves, let's face it, and it's the reason we're now waiting the strangeness out in the teahouse village of Dingboche. I have to say though, that I'm glad I'm here giving this a go and not sitting on the sidelines at home. Nothing ventured, nothing gained, as they say.", Andrew writes in his latest online posting.Further, Andrew writes: "Uncertainty, glumness, irritability - staples of any expedition, are now rising forces in base camp (thus the escape). If the bit of fire doesn't arrive at the top very soon, climbers waiting for restrictions to be lifted on the south side of the big E will face big odds against summiting. Crowding on the route will be grim and time is going to be strained to the point where not everyone will get their chance this time around ... you really do have to wonder just how unpleasant things are going to get." The Knowledge Bureau is a proud sponsor of Andrew's return to Mt. Everest. We will continue featuring an ongoing update on his climb to the summit as part of Breaking Tax and Investment News or you can track his progress by visiting his website for live updates from the expedition. Stay tuned for updates! And don't forget to book Andrew as a keynote speaker for your next conference or educational event by contacting The Knowledge Bureau now: 1-866-953-4769.

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Just How Long do You Have to Keep Those Tax Receipts in Your Closet?

An experienced advisor in the industry seemed to hit it on the head last week, when he declared May first as the start of the next phase of tax season ó adjustment and audit season! 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! The "ff-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! 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 relate 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 dies before October, April 30 or June 15 (the normal filing deadlines Where the individual dies after September, 6 months following death 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. Penalty for Excess Contributions: For 2007contributions, Form T1-OVP by by March 31, 2008. 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 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. Next time: Low hanging Fruit: Let Carry-Over Provisions Ripen for Tax Season 2008  

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Did You Know - Major challenges face family businesses today

17% of family units held equity in a business.1 By the year 2013, 41% of business owners in Canada are expected to exit their businesses2. Over 60% of entrepreneurs age 55 to 64 have yet to discuss their plans with their families. The primary reason for this: They think it's too early! These statistics are important because transitions of businesses are typically not successful. In fact, 72% of family assets will be gone within the first and 90% within the 2nd generation3, the reasons for such a significant track record of failure in successful transfers amounts to lack of trust, lack of communication and unprepared heirs. Lack of or out of date succession planning is another major factor. Addressing and working to avoid such business succession failures is an important component of wealth management for the Canadian economy. For this reason we are pleased to present Succeeding in Business Succession, a series of five "Did You Know" information segments featuring instruction from financial advisor Douglas Nelson, author of Advising Family Business, a certificate course from The Knowledge Bureau. This new course has be chosen for students in the Retirement Income Specialist program leading to the MFA Designation, for its importance in helping advisors understand the important issues business owners face in transitioning the firm or farm to a new generation. So, what keeps business owners from planning? Check it out in Breaking Tax and Investment News and NEXT TIME: Working in or on your business? 1 Statistics Canada 20072 CFIB Survey 20073 William Group Survey and Preparing Heirs 2003

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Ontario Labour-Sponsored Investment Funds Tax Credits Assessment

Alan Rowell, DFA from The Accounting Place in Stoney Creek Ontario writes: In the Ontario Economic Outlook release last November, the Ontario government raised the maximum investment in LSIF's to $7,500, creating a maximum credit of $1,125. CRA is not processing returns with this credit. CRA is processing at the "old" $750 maximum credit stating: "The legislation authorizing an increase to the maximum allowable tax credit is not yet law. If your return is affected by this legislation, we will review it for a possible adjustment to reflect the new maximum amount once the legislation has been enacted by the Government of Ontario" Although this announcement has been implemented in some tax preparation software, the printed forms distributed by the CRA do not reflect this announcement.

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It’s Expensive to Miss Filing Deadlines: April 30 and Beyond

Tax filing deadlines compel most ó but not all ó of Canada's 23 million tax filers to arrange their affairs and reconcile last year's taxes by April 30. There are however, many late filers. Last week's Breaking Tax and Investment News covered the penalties associated with non-compliance in depth. Failure to file will also cost you potentially large sums when you miss important planning opportunities. For example, tax form T1032 Joint Election to Split Pension Income must be filed by your tax filing due date (which for most people is April 30). This is a very lucrative income splitting opportunity for those receiving qualifying pension income and it would be a shame to miss the extra tax refunds due to tardy tax filing habit. Those advisors in the tax and financial services industry should be sure to call all clients who have not yet filed a return by April 30 to maximize availability of this type of provision and of course avoid late filing penalties. CRA should continue to be on the radar screen, however, even after this week's April 30 tax filing deadline. Please be sure to diarize milestones that maximize your rights under the Income Tax Act: KNOWLEDGE BUREAU CHECKLIST: INCOME TAX DEADLINE MAXIMIZER WITHIN THE TAX FILING YEAR ENDING APRIL 30 April 30 Tax Filing Deadline: Personal Tax Returns May 1 Interest accrues daily on overdue taxes owing June 15 CRA owes interest to tax filers on late processed refunds (in fact, the agency has an obligation to process refunds within 45 days of receipt of the return after April 30) Tax Filing Deadline: Proprietorship Returns Quarterly Instalment Payment Due July 1 New Benefit Year: Child Tax Benefit, GST Credit, Old Age Security (file 2007 tax return to determine benefit levels) August 31 Working Income Tax Benefit Advance Payment Application for 2008 September 15 Quarterly Instalment Payment Due December 15 Quarterly Instalment Payment Due December 31 Annual Instalment Due for Farmers, Fishers January 16 Request to Defer Tax on $100,000 of Securities Options January 30 Requirement to pay interest on inter-spousal loans February 28 T4 Slip Completion and Distribution March 15 Quarterly Tax Instalment due March 31 T3 Slip Completion and Distribution Interest Penalty Due on RRSP Excess Contributions 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. To increase your knowledge and train new staff ready to help your expanding practice in tax season 2008, enrol in tax courses within the Tax Services Specialist program from The Knowledge Bureau. Next time: Just How Long do you Have to Keep Those Tax Receipts in your Closet?

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