The capital dividend account (CDA) is an important tax planning device for private Canadian corporations and their shareholders.

The capital dividend account (CDA) is an important tax planning device for private Canadian corporations and their shareholders. The amount of the CDA can be paid out tax-free to Canadian shareholders as a “capital dividend".

The CDA is a notional account that is calculated at any point in time and is composed of various items. The principal component is the “untaxed half” of a corporation’s capital gains, net of the non-deductible half of its capital losses. Any capital dividend that the corporation pays out reduces the CDA by the amount of the dividend.

For example, suppose a corporation with no CDA sells property on December 1 for a $1,000 capital gain. Immediately after the sale, the corporation's CDA will be $500, and this amount can be paid out tax-free to shareholders as a capital dividend.

Suppose the corporation does not pay out the above capital dividend, but sells property on December 10 for a $1,300 capital loss. The CDA will be reduced by $650 so, immediately after the sale on December 10, the CDA balance will be reduced to negative $150.

A negative CDA balance does not trigger any tax. However, it remains negative, and until the corporation realizes enough capital gains (or other items as per below) to bring the CDA balance back to a positive amount, no tax-free capital dividends can be paid out.

Capital gains are not the only way the CDA can increase. The CDA definition is extremely complex, and includes capital dividends received from other corporations, certain life insurance proceeds and certain amounts from eligible capital property dispositions (e.g. goodwill).

Consideration should be given to paying out capital dividends before capital losses are realized.  Such planning will allow shareholders to access corporate funds tax-free before the CDA is reduced.  For example, using the above example, the corporation can pay out $500 tax-free, after the sale on December 1 through to immediately before the sale on December 10. After the sale on December 10 it cannot pay out any capital dividend. Paying out $500 prior to the sale on December 10 would provide the shareholders with $500 tax-free and later leave the corporation with a $650 negative balance in its CDA.  This is a better result than no tax-free money to the shareholders until future realized taxable capital gains exceed $300.

If, over time, capital gains exceed the capital losses, this strategy provides tax-free money earlier rather than later, but the total amount will be the same. The time value of money is reason enough to try to pay out positive CDA balances before they are ground down. However, if the corporation will not have future capital gains to offset future capital losses, there is a permanent benefit, as otherwise no capital dividend could be paid out at all.

For example, corporations are often dissolved after a shareholder dies as part of the post-mortem planning process. Selling the "winners" before liquidating the "losers", and paying out the CDA in between, can yield substantial permanent tax savings.

For more information on the above, please contact HazloLaw, Founder & Business Lawyer, Hugues Boisvert at 613-747-2459 begin_of_the_skype_highlighting 613-747-2459 FREE  end_of_the_skype_highlighting x 304 or hboisvert@hazlolaw.com

Do you need a Business Number (BN)?

If you need at least one CRA business accounts (RT, RP, RC or RM), you will need a BN.

However, before you register for a BN, you need to know a few things about the business you plan to operate. For example, you should know the name of the business, its location, its legal structure (sole proprietorship, partnership, or corporation), and its fiscal year-end. You should also have some idea of what the sales of your business will be. Without this information, you will not be able to complete Form RC1, Request for Business Number (BN).

If you are registering for a GST/HST account, it is important that you provide all of the information required to register. If you register for the GST/HST and your business claims a net tax refund, the refund may not be paid if this information is inaccurate or incomplete.

Notes

If you are a sole proprietor or a partner in a partnership, you will continue to use your social insurance number to file your income tax and benefit return, even though you may have a BN for your GST/HST, payroll deductions, and import/export accounts.

If you decide to incorporate, you will need a BN to pay your corporation income tax and to make instalment payments to your corporation income tax account.

For more information about the BN, go to Business Number registration, see Booklet RC2, The Business Number and Your Canada Revenue Agency Program Accounts, or call 1-800-959-5525.

For more information on the above, please contact HazloLaw Founder & Business Lawyer, Hugues Boisvert at 613-747-2459 x 304 or at hboisvert@hazlolaw.com

Did you know....as a tradesperson, you can save on the tools you buy!

Did you know?

 

If you are an employed tradesperson, you may be able to deduct up to $500 of the cost of eligible tools you bought in 2013.

You may also be able to get a rebate of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) you paid. For more information, see Employee GST/HST rebate.

Important facts

 

An eligible tool is a tool (including associated equipment such as a toolbox) that:

• you bought to use in your job as a tradesperson and was not used for any purpose before you bought it;
• your employer certified it as being necessary for you to provide as a condition of, and for use in, your job as a tradesperson; and
• is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used for the purpose of measuring, locating, or calculating).

For more details on how to calculate the deduction for tools, go to www.cra.gc.ca/trades.

New Permanent Residents: Tax-related issues and obligations you should know about before and after you immigrate to Canada

In Marcil Lavallee LLP's most recent Tax Letter, they did a fantastic job summarizing the tax-related considerations and obligations for new immigrants (Permanent Residents) living in Canada and before moving to Canada. 

Tax on worldwide income

The most important thing to know is that, once a person becomes resident in Canada, they are taxable on their worldwide income from all sources, including foreign income. This will include, for example:

• Pensions from the home country;

• Interest being earned in bank accounts in the home country;

• Gains from selling property in the home country.

You should also know that Canada now has tax treaties or “tax information exchange agreements” with over 100 countries. More such agreements are being signed all the time, specifically for the purposes of exchanging information; and new mechanisms for computerized exchange of information are going to be introduced in at least some situations.

Expect the Canada Revenue Agency to find out about pension income, bank interest, sales of real property and other sources of income in the home country. Taxpayers who do not report their income can be subject to severe penalties and even prison.

Reporting foreign assets and trusts

All Canadian residents must state, on their annual income tax return, whether they have foreign investments (cost exceeding $100,000), or, in some cases, whether they are beneficiaries of foreign trusts or own shares (directly or indirectly) in foreign corporations. Starting next year, the information required for foreign assets and investments will be very detailed.

New immigrants need to take particular note of this requirement, and disclose assets or investments they have left behind in the home country.

Steps before immigrating to Canada

There are a number of tax planning steps that the prospective immigrant should consider before

moving to Canada.

• Arrange to receive all payments for pre- immigration employment outside Canada before immigrating. If employment income is received after immigration, Canada will tax it.

• For immigrants with substantial assets, consider setting up an “immigration trust”.

 If structured properly, this can allow the immigrant to keep funds offshore and not pay any Canadian tax on the income for five years.

• Note that capital property (e.g., real estate)  is generally deemed disposed of and  reacquired at fair market value on  immigration. This will boost the cost base of the property up to its current value, for purposes of future capital gain or loss calculations. The immigrant may want to obtain a formal evaluation of such properties to document the value for later.

• Any Canadian professionals who are advising the immigrant (e.g., lawyers or accountants) should render an account for  time spent to date before the immigrant  moves to Canada. The account will not  bear GST or HST.

Tax issues after becoming resident

If you are a new immigrant, you should consider the following:

• As noted above, you will pay tax on your worldwide income from all sources. Make sure to identify and report these to the CRA, even if you have left the income offshore. Note that some forms of income (e.g., pension income) may be given special relief by the tax treaty between Canada and your home country.

• Obtain a Social Insurance Number upon arriving in Canada. This number will be used as your Canada Revenue Agency account number.

• If you are carrying on business, consider whether you need to register for GST/HST, and to collect and remit GST or HST on your revenues.

• Have you become resident in Canada for tax purposes? Aside from the ordinary meaning of “resident”, if Canada has a tax treaty with the home country, check how the “tie-breaker” rule applies if you might still be resident in both countries.

 For example, if you still have a home in both countries and travel back and forth, the answer may not be obvious.

• If you control a foreign corporation, you generally have to report its passive income as “foreign accrual property income” (FAPI), and pay Canadian tax on it each year. The FAPI rules are very complex and you will need professional advice.

• If you receive income that is subject to foreign tax (e.g., foreign withholding tax  on interest or pension income), you can normally claim a “foreign tax credit” for  this tax on your Canadian return, up to a  limit of your Canadian tax on the same  income. The rules can become complex, but in general you end up paying the higher of the two countries’ tax rates in total.

• If you are a US citizen, you must continue to file US tax returns even though you are no longer resident there. To reduce the impact of double taxation, you will want to claim the US “foreign earned income exclusion” against your employment or self-employment income in Canada, as well as US foreign tax credits and any relief provided by the Canada-US tax treaty.

 Professional advice from a specialist in both Canadian and US tax law is usually recommended. Note also that the US and Canadian tax systems differ in many ways, and your calculation of income for the two systems may be very different.

• Consider setting up a TFSA (Tax-Free Savings Account) and contributing funds to it so that you can earn a certain amount of investment income tax-free. (If you are a US citizen, this is normally not advisable.)

• After your first year of earning employment or business income, set up a registered  retirement savings plan (RRSP) and  contribute the maximum possible to it  (unless you are planning to emigrate from  Canada within a few years, in which case  there could be negative consequences).

• If you have children under 6, apply to the CRA for the Universal Child Care Benefit. If you have children under 18 and your family is relatively low-income, apply for the Canada Child Tax Benefit. If your family is low-income, apply for the GST/HST Credit. (See cra.gc.ca for more information.)

• Payments under pre-existing spousal support obligations may be deductible for Canadian tax purposes. If the payments qualify, keep good records and make the claim on your Canadian tax return. 

• A person who dies while owning property in the US, or a US citizen who dies, is subject to US estate taxes. A credit to reduce or eliminate this tax is provided by the Canada-US tax treaty. 

Family trusts and life insurance options are often overlooked when thinking of how to pay for a post-secondary education

Below is a great article written by Tim Cesnick and published in The Globe and Mail.

Family trusts and life insurance options are often overlooked when thinking of how to pay for a post-secondary education

Now that my kids have decided they want to be brain surgeons, I’ve been thinking about how to pay for their post-secondary education. Two methods of saving for a child’s education are often overlooked. The first is a family trust, and the second is life insurance.

FAMILY TRUST

A trust is simply a legal relationship between three parties: The settlor (the person creating the trust), the trustee (the person who holds and controls the property of trust) and the beneficiary (the person for whom the property of the trust is being held). The nice thing about a trust is that it’s possible to have the income of the trust taxed in the hands of the beneficiaries, who may pay little or no tax if they are minors and have little or no other income.

Setting up a trust does come with a cost, so it’s not generally going to make sense unless you’re willing and able to commit a sustantial sum to the trust over a short period of time. You can make this a loan to the trust if you want, so that you can take back your capital again later, as a repayment of the loan.

Once the money is in the trust, any interest and dividend income earned in the trust will be attributed back to you to be taxed in your hands while the beneficiaries of the trust are minors (unless you charge the taxman’s prescribed rate of interest on a loan to the trust), but capital gains can be taxed in the hands of the beneficiaries. Also, any second generation income (that is, income on the income, even if it’s interest or dividends) can be taxed in the hands of your children.

You can pay for all or part of your child’s education costs out of the income or capital of the trust. The taxman will consider payments to third parties, including reimbursements to you, as being paid to the beneficiary as long as those payments were clearly for the benefit of your child. To the extent that little or no tax has been paid on the income of the trust over the years (by having income taxed in your child’s hands), you’ll effectively be using pre-tax dollars to pay for the child’s education.

The benefits of the trust include: protection of the assets of the trust from creditors, splitting income with your children, maintaining control over the assets, and flexibility to use the trust funds for things other than education. There’s a lot to consider when setting up a trust. 

LIFE INSURANCE

Life insurance is an interesting tool because you can accumulate investments inside a policy on a tax-sheltered basis. Further, if it is the life of your child that is insured, you’re able to transfer ownership of the policy, including the accumulated investments inside the policy, to your child free of tax once he or she reaches age 18. Your child can then make withdrawals of those investments from the policy to pay for education. While those withdrawals are generally going to be taxable to your child, he’ll likely pay little or no tax if he has little or no other income.

One of the benefits of choosing a whole life insurance policy is that the returns have been incredibly stable over the years, even throughout 2008. The reason for this is that the insurance companies are allowed to smooth, or average, the returns you receive over a period of years.

Consider some numbers. If you pay $2,750 annually into a whole life policy each year until your child is 18, there could be $70,000 to $75,000 in the accumulating fund to be accessed (varies by insurance company), assuming a 5 per cent annual return inside the policy. If you set aside the same $2,750 in a tax-free savings account (TFSA) you could end up with approximately $84,000 earning that same 5 per cent, but this would assume a portfolio that is largely in equities that is subject to the volatility of the markets. If you earned, say, 6 per cent in the TFSA, you’d have close to $92,000 in this case, with the volatility.

Life insurance also offers asset protection, flexibility to use the assets for any purpose, and a death benefit ($265,000 in my example) over and above the investment component of the policy if your child passes away prematurely. Insurance is just another tool to consider.

As usual, please do not hesitate to contact Hugues Boisvert should you have any questions. hboisvert@hazlolaw.com.com

Business Owners - Are you missing out on some serious tax savings???

what is a Corporate Reorganization??

A Corporate Reorganization is a way to reorganize and restructure your company so that you can reap the rewards of the existing tax regulations - often resulting in tens of thousands of dollars of potential tax savings every year into the future.

why do I need a Corporate Reoganization?

As a Business Lawyer, I sometime see situations where businesses are set up with a certain structure to take advantage of particular circumstances that were relevant at the time they were set up, but as we all know, situations change over time.

It is therefore sometimes the case that the favourable conditions existing at the time your corporate structure was put in place are no longer there, and you might end up with a somewhat cumbersome of inefficient structure in today's business climate, particularly from a tax point of view.

On a daily basis, I work with companies in this situation to help them reorganize and restructure so that they can reap the rewards of the existing tax regulations - often resulting in tens of thousands of dollars of potential tax savings every year into the future.

In many situations, for example, I may recommend a corporate reorganization, whether for corporate tax planning, creditor proofing or other organization purposes. I can also assist you in the transfer of assets on a tax-deferred basis from one entity to another, or from one corporation to another. Alternatively, I could recommend amalgamating two corporations or winding up one into the other for tax planning purposes or to rationalize a corporate structure.

Often, I will investigate the options thoroughly and advise you of the best plan to meet with your objectives.

There are many reasons companies may need to be reorganized:

•to establish and implement a family trust in the course of corporate reorganization;
•to create holding companies for creditor-proofing reasons;
•to divide the assets of a corporation among the shareholders;
•to incorporate a business, so that it may be carried on in corporate form;
•to carry out an estate freeze in the most effective manner;
•to transfer a business from a corporation to a partnership to deduct losses, take in a partner, or eliminate capital tax

If you think you are a candidate and would like to know more, I can advise on whether a corporate reorganization is required, the benefits of such a reorganization, and the disadvantages, if any.

Finally, I can also develop a plan to implement the corporate reorganization, and work with your advisors (accountants, financial planners, insurance) to execute the plan.

Please contact me should you wish more information on the above.

Business owners: 8 tax changes you should know about...

I would like to share an article published in the Globe and Mail and written by Tim Cesnick.

Business owners: 8 tax changes you should know about...

In the weeks leading up to the 2011 federal budget there was very little talk about the type of tax measures that were likely to be proposed. The silence was deafening. Now, the score is in: Taxpayers: 9, the Government: 12 – give or take. That is, there were more measures proposed in the 2011 Federal Budget to benefit the government by closing loopholes than measures designed to put more money into the pockets of Canadian taxpayers.

While I won’t dwell on every change proposed in this budget, let me share some key highlights that are sure to impact many Canadian families and individuals.

FAMILIES

1. Children’s Arts Tax Credit. This credit should have been called the “Development” credit rather than the “Arts” credit because it will apply to much more than just artistic activities. Regardless, it’s good news for families. This tax credit can be claimed on up to $500 of eligible expenses per child each year. It will put $75 of federal tax back in your pocket if you spend $500 for a child (the actual federal credit is 15 per cent of the eligible expenses). Eligible expenses include fees paid for children under 16 in an eligible program of artistic, cultural, recreational, or developmental activities. Eligible activities include things like music lessons, instruction in languages, dance, literary arts, visual arts, and even academic tutoring.

2. Family Caregiver Tax Credit. A new tax credit will be available beginning in 2012 for those caring for a dependent with a mental or physical infirmity. It applies to your total tax credits if you’re already eligible to claim the spousal or common-law partner credit, child tax credit, eligible dependent credit, caregiver tax credit, or infirm dependent credit. If you qualify for one of these credits, you can claim an additional 15 per cent of $2,000 federally ($300 in added tax savings).

3. Medical Expense Tax Credit. Up until this budget, you had the ability to claim a tax credit for medical expenses incurred for yourself, your spouse or common-law partner, your children who are under 18, or certain other dependent relatives. When it comes to these “other dependent relatives” there has been a cap of $10,000 on the amount that could be claimed. This budget has removed the $10,000 limit for dependent relatives, and applies for 2011 and later tax years.

EDUCATION

4. Exam fees. This budget proposes to amend the tuition tax credit to recognize fees paid to an educational institution, professional association, provincial ministry, or similar institution to take an exam that leads to a professional status recognized by a statute, or to be licensed or certified to practice a profession or trade in Canada. The total fees must be $100 or more to be eligible to claim a credit, and applies to exams taken in 2011 or later years. Be sure to keep your receipts for these exams.

5. Studying abroad. It used to be that a student could qualify to claim a tuition tax credit for studying outside of Canada only where the course lasted at least 13 consecutive weeks. Because many programs are shorter than this, the 2011 budget reduces the minimum course duration to three consecutive weeks. The 13-week requirement to be eligible to withdraw educational assistance payments from a registered education savings plan (RESP) has also been reduced to three weeks for many courses.

6. RESPs. The budget introduces changes that will allow assets inside RESPs to be transferred from one sibling’s plan to another without tax penalties or triggering a repayment of the Canada Education Savings Grants (CESGs), provided that the beneficiary of the plan receiving the assets has not turned 21 by the time the plan was opened.

INVESTORS

7. RRSPs. A new set of rules has been introduced in this budget to prevent taxpayers from entering tax schemes designed to enable investors to access the funds inside their Registered Retirement Savings plans without paying tax on withdrawals. These “RRSP-strip” schemes have evolved over time and the new rules are broad enough to stop virtually all of them. Further, it used to be the case that you could potentially hold a sizeable investment in private company shares in an RRSP. The rules have been tightened to limit that investment to less than 10 per cent of a private company (this is a complex area of the tax law – so speak to a tax pro for more).

8. Donation of flow-through shares. It was great while it lasted, but a “loophole” has just been closed. It has been the case that you could purchase flow-through shares, gain a tax deduction for virtually the entire amount invested, donate the shares to charity and receive a donation tax credit for the full value of the shares. To boot, you wouldn’t have to pay tax on the resulting capital gain when the shares were “disposed of” by transferring them to the charity. The rules are now tightened so that the capital gain on the transfer of the shares to the charity will be taxable, unless the gain represents the value of the shares over and above what you paid for the shares. There’s still tax relief in this strategy, but it’s not as generous as before.

Business owners: Should you take a Salary or a Dividend??

Today I would like to share an excellent article written by Tim Cesnick published in The Globe and Mail.

Business owners: Should you take a Salary or a Dividend??

Business owners face all types of challenges. Human resources issues may be the greatest – but tax issues are also near the top of the list. How should you compensate yourself? Should you pay yourself more salary? How about dividends? Are there other alternatives? Let’s talk about your compensation.

The Theory

If you own an incorporated business, there are two primary ways to pay yourself: salary, and/or dividends. If you pay yourself salary, the amount is a deductible expense to your company and is taxable in your hands. Another alternative is to have the income taxed in your corporation and then pay the after-tax earnings to yourself as dividends. Your company doesn’t claim a deduction for dividends paid. You’ll face tax on the dividends paid to you, but at a lower tax rate than salary. Why? Because the corporation has already paid tax on the income. When you receive dividends, the amount is “grossed up” (to approximate the pretax income of the company) and then you’re entitled to a dividend tax credit (to provide a tax credit for the approximate tax that was paid by the company).

Our tax system is based on the theory of integration. The theory is that there should be no difference between earning income personally, or earning it in a corporation and then paying that income out to yourself as dividends. If integration is perfect, the amount of income in your hands would be exactly the same, either way.

In the past, integration only worked, albeit not perfectly, in the case of small, Canadian-controlled private corporations (CCPCs) that have been eligible for a lower rate of tax (on the first $500,000 of taxable income today; this results from the “small business deduction” available only to CCPCs). The government changed this in 2006 when it introduced “eligible dividends.” To make a long story short, eligible dividends are those paid after 2005 out of business income that was taxed at a higher rate – rates applicable, for example, to income earned by publicly traded companies or smaller-company income that is not sheltered by the small business deduction. Eligible dividends have been subject to a different gross-up and tax credit rate. This effectively reduced the level of personal tax paid on those dividends, to make integration work better where the company has paid higher rates of tax.

Today, you’ll face a different tax rate on eligible dividends (paid out of corporate income taxed at higher rates) and ineligible dividends (paid out of corporate income subject to lower rates, thanks to the small business deduction).

The Reality

The fact is, integration doesn’t work perfectly. And so there may be advantages to paying dividends over salary, or vice versa. To complicate things, general corporate tax rates are falling over the next couple of years, which may shift your approach. You see, as corporate tax rates fall, the level of tax you’ll pay personally on eligible dividends is due to increase. Why? To keep integration as close to perfect as possible.

The general federal corporate tax rate is currently 18 per cent in 2010, will be 16.5 per cent in 2011, and 15 per cent in 2012. The top federal marginal tax rate on eligible dividends is 15.88 per cent in 2010, will be 17.72 per cent in 2011, and 19.29 per cent in 2012. Regardless of your province of residence, it’s still true that the tax rate on eligible dividends is going up.

So, what does all this mean for you? First, if you do plan to pay yourself eligible dividends, your best bet may be to accelerate those dividends to pay them out in an earlier year rather than later, to take advantage of the current lower tax rates. There was some confusion from my article last week where I had mentioned that it could be beneficial to wait until 2011 to pay out eligible dividends. That read incorrectly. I had intended to suggest that paying dividends sooner, say in 2010, would be better.

You screwed up your taxes, now what?

For many of us, we had until April 30th to file our taxes, by now you should have received your notice of assesment from CRA... did you receive a surprise letter??

Over the weekend I came accross this great article from Tim Cesnick.

You screwed up your taxes, now what?

Taxes can be intimidating for some people. Don’t let your tax return scare you. Think of this tax filing exercise as an open-book test. Did you ever write one of those? They gave you the book, for crying out loud. The answers are right in front of you. And to be truthful, filing your tax return is even better than an open-book test because there isn’t always one right answer, and you’re allowed to choose the answer that gives you the best mark – that is, the lowest tax bill – as long as you’re not lying when you complete the forms.

Finally, unlike any test I’ve ever written, you can go back and change your answers after the fact if you discover you made a mistake or forgot something. And if you disagree with the grade you receive, you can often have it changed by a simple phone call or formal objection.

Today I want to talk about what to do after you’ve filed your tax return and discover you’ve forgotten something, made a mistake or disagree with the assessment the taxman sends you.

Making changes
Picture this: You send in your tax return thinking that all is well and then discover after the fact that another T-slip arrives in the mail a few days later. Or perhaps you’re going through your files from last year’s tax return and discover some receipts that should have been kept in this year’s file – so they were missed when you prepared this year’s return (you did check last year’s file, didn’t you?).

Could it be that you didn’t forget anything, but simply made a mistake? Common mistakes include failing to transfer certain tax credits to a family member to save more tax (age, disability, pension, tuition, education, textbook, public transit and donation tax credits come to mind), forgetting some types of business expenses (did you claim capital cost allowance on your computer, desk or owned vehicles used in business?), forgetting safety deposit box fees, among other mistakes.

If you did forget something, or made a mistake, you can easily make a change by filing Form T1-ADJ (called an “adjustment request”). It’s a one-page form where you simply make note of the lines on your tax return you’d like to change, provide an explanation at the bottom, and send it in. No need to file a complete amended tax return. You’ll find a copy of Form T1-ADJ on the Canada Revenue Agency’s (CRA’s) website at cra.gc.ca.

Today I want to talk about what to do after you’ve filed your tax return and discover you’ve forgotten something, made a mistake or disagree with the assessment the taxman sends you.

Making changes

Picture this: You send in your tax return thinking that all is well and then discover after the fact that another T-slip arrives in the mail a few days later. Or perhaps you’re going through your files from last year’s tax return and discover some receipts that should have been kept in this year’s file – so they were missed when you prepared this year’s return (you did check last year’s file, didn’t you?).

Could it be that you didn’t forget anything, but simply made a mistake? Common mistakes include failing to transfer certain tax credits to a family member to save more tax (age, disability, pension, tuition, education, textbook, public transit and donation tax credits come to mind), forgetting some types of business expenses (did you claim capital cost allowance on your computer, desk or owned vehicles used in business?), forgetting safety deposit box fees, among other mistakes.

If you did forget something, or made a mistake, you can easily make a change by filing Form T1-ADJ (called an “adjustment request”). It’s a one-page form where you simply make note of the lines on your tax return you’d like to change, provide an explanation at the bottom, and send it in. No need to file a complete amended tax return. You’ll find a copy of Form T1-ADJ on the Canada Revenue Agency’s (CRA’s) website at cra.gc.ca.

&&&&&&&&&&&&&&&&&&&

As usual, its wise to consult a professional before undertaking any appeal. For any questions, please do not hesitate to contact me at hugues.boisvert@andrewsrobichaud.com