2021 TD1 Basic Personal Amounts

by

Happy New Year!

For those of you who have accounting software where the personal exemption amounts need to be entered re: payroll, this can be done under each employee’s profile.  For simplicity purposes, I’m including basic personal amounts below for the 2021 calendar year (alternatively, you can follow the links provided to determine appropriate amounts).  If you’re applying an amount other than the basic personal amount, ensure that you print the worksheets provided in the links, and have the employee sign the form (if going with a basic personal amount, the employee’s signature is not required).

  1. Basic personal amount re: federal income taxes 2021 is $13,808; and
  2. Basic personal amount re: Nova Scotia income taxes 2021 is $8,481.

Link to the Federal TD1 form:

2021 Personal Tax Credits Return (canada.ca)

Link to the Nova Scotia TD1 form:

2021 Nova Scotia Personal Tax Credits Return (canada.ca)

Stay safe,

TFSA audit project by CRA

by

“To date, the CRA has reassessed more than $75 million in additional taxes resulting from audits of TFSAs.  In 2016, the CRA released Income Tax Folio S3-F10-C1 Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs, which provides information on the tax consequences of a registered plan carrying on a securities trading business.  In the Folio it is explained that the determination of whether a particular taxpayer carries on a business is a question of fact that can only be determined following a review of the taxpayer’s particular circumstances. Interpretation Bulletin IT-479R, Transactions in Securities sets out factors developed by the courts that are relevant in determining whether transactions in securities constitute carrying on a business. There is nothing unique to TFSAs when determining whether transactions in securities constitute carrying on a business.”

In other words, TFSA trading can be classified as “carrying on a business” by the CRA and would therefore result in tax consequences for the tax payer.  If you have investments in TFSA and if they are invested through a broker, it may be prudent to have a discussion with your broker to find out what trading patterns are being followed — to ensure that your retirement fund in maintaining its intended classification.

Prevent instalment penalties and interest

by

Date published: 2015-04-22

It’s now easier to comply with your instalment requirements by using CRA online services. CRA has introduced another cost-effective way for you to pay online that ensures your instalment payments are made on time.

To pay on time and prevent interest and penalty charges, go online and:
1. Calculate the required instalment payments and due dates.
2. Authorize the CRA to withdraw an amount from your bank account on your instalment due dates.

Compliance made easy.

Search and Rescue Volunteer’s Credit

by

While not a charitable donation credit, the new search and rescue volunteer tax credit is an acknowledgement of time donated to an important cause. The base for calculation of this new non-refundable federal credit, which took effect in 2014, is $3,000, so at the 15% federal credit rate it has a value of $450. The credit is available to those with at least 200 certified annual volunteer ground, air, and marine search and rescue hours. There is no prorated credit for someone who volunteers less than 200 hours in the year; it’s all or nothing. This credit cannot be claimed in addition to the volunteer firefighter tax credit, so where a taxpayer provides both types of volunteer services they will claim one credit or the other (both have the same value).

What’s New for 2014

by

Content taken from the General Income Tax and Benefit Guide – 2014 – General Information

We list the major changes below, including announced income tax changes that have not been made law at the time of printing. If they become law as proposed, they will be effective for 2014 or as of the dates given. For more information about these and other changes, see the areas outlined in this guide.

Manage online mail – When you register for online mail, the CRA will no longer mail your notices to you. Instead, you will receive an email notification that there is mail for you to view on the My Account secure online service at My Account. Have your tax record in a secure place – online!  For more information, see Email address and Manage online mail.

Family tax cut (line 423) – You may be able to claim a non refundable tax credit of up to $2,000 to reduce your federal income tax.

Emergency services volunteers (line 101) – The rules for the $1,000 exemption for emergency services volunteers have changed.

Lifetime capital gains exemption (line 254) – For dispositions of qualified small business corporation shares and qualified farm and fishing property made after 2013, the lifetime capital gains exemption limit has increased to $800,000. For more information, see Guide T4037, Capital Gains.

Adoption expenses (line 313) – The maximum amount of eligible expenses for each child has increased to $15,000.

Medical expenses (lines 330 and 331) – Costs for the design of personalized therapy plans for persons eligible for the disability tax credit and costs for service animals used to help manage severe diabetes are now eligible as medical expenses. For more information, see Guide RC4064, Medical and Disability Related Information.

Ecological gifts (line 342) – The carry-forward period for gifts of ecologically sensitive land made after February 10, 2014, has been extended to 10 years.

Cultural gifts (line 342) – For donations of certified cultural property made after February 10, 2014, special rules will apply when the property was acquired through a gifting arrangement that is a tax shelter. For more information about these new rules, see Pamphlet P113, Gifts and Income Tax.

Children’s fitness amount (line 365) – The maximum amount of eligible fees for each child has increased to $1,000.

Search and rescue volunteers’ amount (line 395) – As a search and rescue volunteer, you may be able to claim an amount of $3,000.

Investment tax credit (line 412) – Eligibility for the mineral exploration tax credit has been extended to flow-through share agreements entered into before April 2015.

GST/HST credit – You no longer have to apply for the GST/HST credit. When you file your return, the CRA will determine your eligibility and tell you if you are entitled to receive the credit.

Amateur athlete trust (AAT) – Income contributed to an AAT now qualifies as earned income in calculating the registered retirement savings plan (RRSP) contribution limit of the trust’s beneficiary. For more information see line 122.