Online Tax Filing Deadline Has Been Extended to May 6

The Canadian Revenue Agency (CRA) has extended the electronic tax filing deadline to May 6 (NETFILE or EFILE). So any taxpayer preparing their tax return with tax software like QuickTax is able to file their return Online up to Tuesday, May 6 at midnight without receiving any penalties. 

But..... If you owe money to the government you still have to send the money by April 30 deadline...you just don't have to file your taxes Online until May 6.

Learn more about the NETFILE filing extension  or here 

Tax Filing Deadline Extension for Taxpayers Affected by Manitoba Flooding

Taxpayers affected by flooding in the Province of Manitoba will have until June 1, 2009, to file their 2008 personal income tax returns. In order to determine if you qualify for the tax deadline extension you will need to compete the CRA's Taxpayer Relief Request and send it to the CRA.

Businesses affected by the flooding may also qualify for the taxpayer relief provisions if they are unable to meet their tax obligations due to the flooding. The business tax relief requests will be handled on a case-by-case basis by the Canadian Revenue Agency.

CRA contact Information:
Personal taxpayer relief 1-800-959-8281
Business tax relief 1-800-959-5525
For more information visit the Canadian Revenue Agency's website

What’s the “simplified method” for calculating moving expenses?

You can claim travelling expenses, meals & accommodation under something the CRA calls the ‘simplified method’. Basically,instead of keeping receipts for every time you filled up the gas tank or bought a coffee, you can claim a flat rate. Example:

Note: These amounts are based on the CRA's 2008 rates which are updated every year.

Stephanie moved in October 2008 from Edmonton to Toronto to start a new job. She drove 3532 kilometres, leaving Edmonton on Wednesday,October 22nd and arriving in Toronto on Sunday, October 26th. Under the simplified method:    

• Travelling expenses: Stephanie needs to multiply the kilometres she drove by the cents/km rate for Alberta (the province where she’s travelling from) from the CRA’s chart. 3532 kilometres x $0.53/km = $1871.96 
• Meals: Stephanie can claim a flat rate of $17 a meal to a maximum of $51 per day, without receipts. $51 per day x 5days = $255 
• Accommodation: Stephanie spent $150 a night for hotel rooms during her drive. $150 per night x 4 nights = $600 She also spent $750 per week for 2 weeks (14 days) of temporary accommodation upon her arrival in Toronto. $750 per week x 2 weeks = $1500
• Simplified travelling, meals & accommodation expenses = $4226.96

Add $4226.96 to the $3902.04 Stephanie spent packing, hauling and storing her household

effects. Stephanie can deduct total moving expenses of $8129.00 on her 2008 taxes from the income that she earned at her new position in Toronto between October 27, 2008 and December 31, 2008.

HINT: The EasyStep Interview in QuickTax guides you through your moving expenses, helping you determine if you’re eligible and calculating all of your expenses.

What moving expenses can you deduct?

You can deduct expenses that you paid for moving yourself, your family and your household effects. Note that not all members of your household have to travel together or at the same time.

Eligible moving expenses include:

• Transportation and storage costs for household items (such as packing, hauling, in-transit storage and insurance). This includes items such as boats and trailers.
• Travelling expenses, including vehicle expenses, meals and accommodation, to move you and members of your household to your new residence.
• Meals and temporary accommodation, near either residence, for you and the members of your household for up to 15 days.
• Cost of cancelling a lease for your old residence, except any rental payment for the period during which you occupied the residence.

To learn more about moving deductions visit the CRA's website or use the QuickTax  Live Community.

Stop wondering! Your Top 10 Tax Questions Answered by QuickTax

Taxes and social media helping Canadians get every dollar they deserve! Live Community is a forum built into QuickTax giving Canadians the ability to get instant answers from other QuickTax users or tax experts online. It provides real-time answers right when users want them, or lets them search a database of thousands of context-specific tax scenario questions. Last year, more than 140,000 people connected on Live Community, asking and answering almost 16,000 questions.

What tax help are you looking for? Here are the 10 most viewed questions on our QuickTax Live Community this tax season.

With the help of our tax analysts and QuickTax product support – not to mention our always intelligent customers – we’ve gathered the info to answer these popular questions. Read on to learn about the latest top tax tips for Canadians.

1. Can I claim rent or property tax that I paid?
2. What is the Ontario Property Tax Credit? What are the qualifications?
3. I can't find box 40 on the T4 section.
4. What activities qualify for the Children's Fitness Tax Credit?
5. Can I claim my spouse as an eligible dependant?
6. I’m a mother of two. Can I enter both of my kids as eligible dependants?
7. I have an amount on my T4A in box 28. Where do I enter this?
8. My company pays a portion of my benefits and I pay the rest. Can I claim what I pay under "private medical plan"?
9. What can be claimed as medical expenses?
10. I’m married: is it better to file together or separately?
    

1. Can I claim rent or property tax that I paid?
Three provinces currently allow a tax credit for rent or property tax paid.

• Quebec
• Manitoba
• Ontario residents are eligible for the Ontario Property Tax Credit (see question #2 below)

HINT: If your return is reviewed, the CRA will ask to see rent receipts. Make sure that you obtain receipts from your landlord that show how much you paid for rent and the month & year you paid it. No receipts? Get a signed letter from your landlord with the same information.

2. What is the Ontario Property Tax Credit? What are the qualifications?

The property tax credit helps people in Ontario with low-to-moderate incomes pay for housing costs. To qualify you must meet all of the following qualifications:

• You were a resident of Ontario on December 31, 2008
• You paid rent or property tax on a principal residence in 2008 or it was paid for you
• You were 16 or older on December 31, 2008
• As of December 31, 2008, you were not under 19 and living with someone who received a Canada Child Tax Benefit payment for you in 2008

To enter the amount, go to the Provincial section of your return. Check the box for "Ontario Property Tax Credit”. You’ll be asked to select the taxpayer claiming the amount if you are preparing joint returns. After that, enter the housing details and amounts paid for rent or property tax.

HINT: The amount you can receive depends on your individual or family net income, the amount of rent or property tax paid and your age. So, your tax credit this year may be bigger (or smaller!) than last year.

3. I can't find box 40 on the T4 section.

Good news! You don’t have to enter the amount in box 40 on your tax return because it’s already included in box 14 (your employment income).

Box 40 is the amount of taxable benefits that you received from your employer, such as group life insurance policies and transit passes, but it’s for CRA use only. If you’d like to include it, box 40 appears immediately after box 55 (the 8^th box down in the first column) in the EasyStep™ interview in QuickTax.

HINT: The amounts in boxes 30, 32, 34, 36 and 38 are also already included in box 14, so you don’t have to report them on your taxes.

4. I’m married: is it better to file together or separately?

In Canada, your household income is household income: you can’t ignore your spouse’s or common-law spouse's income on your tax returns. Whether you prepare separate returns or prepare both returns together in QuickTax, you must declare your spouse’s income.

You can share deductions/credits with your spouse that can optimize your taxes, like splitting pension income. If you prepare your returns together, any unused amounts listed on Schedule 2 will automatically calculate across, including tuition amounts that you transfer to your spouse. Also, QuickTax will automatically fill out the forms that require information from your spouse’s return, like childcare expenses.

HINT: QuickTax identifies tax-saving opportunities before you file, so don’t worry if you missed something – we’ve got you covered.

5. What can be claimed as medical expenses?

You can claim money that you spend on allowable medical costs that you pay for out of your pocket. This includes prescriptions, non-cosmetic dental expenses, prescription glasses, etc. provided you were not reimbursed for them (for example, by your employer or a private insurance or drug plan). You can claim medical expenses for any one-year period ending in the year for which you are filing.

Click here to see a complete list of eligible and ineligible expenses.

HINT: There is a minimum amount that you must reach before you can claim medical expenses. QuickTax automatically determines your eligibility.

6. My company pays a portion of my benefits and I pay the rest. Can I claim what I pay under "private medical plan"?

Yes, you can claim any medical expenses over and above what your plan pays, as well as any premiums that you paid, under "private medical plan". However, it has to fall into the same 12-month period as any other medical claims you may be submitting. If your employer only pays a portion of your medical plan and they deduct the rest from your pay, then you can claim that amount as well.

To enter the Private Medical Plan amounts, click the Deductions tab. Proceed through the deductions pages until you reach "Your Health Profile for 2008." Check the Medical Expenses box on this page. Click Continue.

On the next page, check the "Private medical plans and other claims" box. Click Continue. The next page will ask the name of the Private Plan, and the premium paid. Enter your amounts as required.

HINT: Make sure you don’t claim everything that you pay to a group insurance plan, like your life or disability insurance premiums. Only the premiums related to dental and medical coverage are deductible as a medical expense. You should get that number directly from your employer, not from your pay stub, to avoid any mistakes.

7. I have an amount on my T4A in box 28. Where do I enter this?

On the T4A, box 28 is not shown as a data entry box. Box 28 - Other Income is shown as a heading above the Footnote Code boxes where you will enter the income into the appropriate Footnote Code box.

To determine what Footnote Code box you need, find the code in the footnote area of your slip ( box 38) and enter the income amount into the corresponding box. If there is no written footnote on your T4A, box 38 will be blank, or 00 will be displayed.

If you have more than one Footnote code, 13 will be displayed in box 38 of your paper T4. Enter the amounts into the appropriate boxes if you have Code 13. (Example: You have income amounts for Apprenticeship Incentive Grant [Box 30] and Scholarships, Bursaries, etc. [Box 5]. Your Footnote code should show 13, but you will enter the amounts on the T4A into Box 5 and Box 30).

HINT: If you’re married and claiming pension income on a T4A, don’t forget to try the new QuickTax Pension Income Splitting Optimizer. It automatically proposes the best distribution of your pension income (up to one half), which can help you and your spouse/partner pay less in taxes.

8. I’m a mother of two. Can I enter both of my kids as eligible dependants?

For tax purposes, an eligible dependant is a very specific - and quite large - deduction. You can only claim one of your dependants as your “eligible dependant” provided he or she meets the requirements set out by the CRA. Do you meet the qualifications to claim an eligible dependant? Find out here.

HINT: You should list all of your children in the dependant section of the Personal Profile but only one can be claimed as an eligible dependant.

9. Can I claim my spouse as an eligible dependant?

For tax purposes, your spouse cannot be your dependant. A specific tax credit (the amount for spouse or common-law partner) is available when one spouse has low income.

If your spouse made $9600 or less last year, QuickTax will automatically calculate the spouse or common-law partner amount for your return when you indicate your married status and complete your spouse's personal information section. Also, certain credits on one spouse's return can be transferred to the other spouse's return if they are not needed to eliminate tax for that spouse.

HINT: Both you and your spouse cannot claim this amount for each other for the same year.

10. What activities qualify for the Children's Fitness Tax Credit?

The Children’s Fitness Tax Credit lets you claim the cost (up to $500 per child) of registering your child in programs that involve physical activity.

To qualify for this amount, a program must:

• Require significant physical activity (that is, contribute to cardio-respiratory endurance, plus one or more of: muscular strength, muscular endurance, flexibility or balance)


• Be at least eight weeks long with a minimum of one session per week or, in the case of kids’ camps, five consecutive days


• Be supervised by someone who actively encourages participation


• Be safe & suitable for children

Your child (or your spouse's or common-law partner’s child) must have been under 16 years of age at the beginning of the year in which an eligible fitness expense was paid. Please note that different rules apply for children with disabilities; see the CRA website for more details.

To claim this amount in QuickTax, click on the Deductions tab and follow the interview until you come to Dependants Credits. Click Enter Dependant Credits and from there you will be able to enter your child's fitness amounts.

HINT: Still not sure if your child’s program qualifies? The CRA has a Children's Fitness Tax Credit Eligibility Checklist that explains all of the eligibility rules in detail.

To get more tax tips, hints and advice follow @QuickTax2008 on Twitter; join the Live Community; or contact QuickTax Support. Readers who do not use QuickTax can compare the Online Tax Software and CD/Download Tax Software catalogues on the QuickTax.ca web site.

Who's eligible for moving expenses?

If you moved during last year to start a new job or business, you may qualify to deduct eligible moving expenses. You’re eligible as long as your new residence is at least 40 kilometres closer to your new place of employment or business than your previous home. If you’re eligible, you can deduct moving expenses from the income you earned at your new location only. 

Full-time students (university or college) can also deduct moving expenses provided the student’s new home is at least 40 kms closer to school than where the student used to live. However, students can only deduct eligible moving expenses from the part of their scholarships, fellowships, bursaries, prizes and research grants required to be included in their income. Students, that means that the money you earn at your part-time job isn’t eligible!

Learn more about the CRA's criteria for moving expenses here

Have you Filed your taxes? Do YOU know what the CRA knows? Find out here...

Around 1 in 5 of us have missed the tax filing deadline of April 30th at one time or another. Some just don’t bother at all. Do YOU know what the CRA knows?

While some tardy filers are plain dishonest and trying to game the system, many are simply at odds with the self-assessment process and complexity.

Let’s point out a few things that you may NOT know Canada Revenue Agency (CRA) is aware of…

• Certain industries are more prone to shady money management and tax reporting, including renovation, couriers, food service for example (according to MSN Finance blogger Gordon Powers)
• There is a ‘snitch line’ that enables disgruntled spouses, former business partners or jealous neighbours to blow the whistle
• Art syndications, currency hedges, and amateur offshore transactions are hot spots as far as the CRA is concerned. Here it’s not only the CRA that gets antsy, the tax judges don’t like them either – buyer beware of ‘too-good-to-be-true’ arrangements
• The CRA also employs a software program specifically dedicated to crawling e-commerce hubs including gambling & auction sites looking for cheats. The crawler creates datasets of transactions which it matches with information in various databases and tax records

Penalties
For those who get caught tinkering with taxes, the penalties can be severe.

As a criminal offence, fiddling the books is punishable by fines equal to several times the amount of tax owing, plus the tax, plus the compound interest (starting May 1st), and possibly even criminal prosecution; and contrary to popular belief, there's no time limit for the authorities to prosecute you.

Late Filing
Even if you're just a few days late, it can cost you. If you owe tax for 2008 and don't file your return by April 30, the CRA will charge you a late-filing penalty. The penalty is 5% of your 2008 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months.

Seriously Canada friends, planning on just paying the taxes owed when (not if) you get caught is a really poor strategy. The CRA's mandate is to prosecute you. In most cases, they may well make an example of you in order to show others what happens when sneaks are caught. Are you on their list?

What About My Accountants? Surely they’ll stand by my side…
Powers also says; “don't think your accountant or financial advisor is going to bail you out. Despite what you might see on television, these folks are required to report you to the tax authorities and cease acting on your behalf. They can also be forced to produce all their notes and even to testify against you, warns Ottawa lawyer Paul DioGuardi, who has written a book called ‘The Taxman Is Watching: What Every Canadian Taxpayer Needs to Know and Fear’.”

What the CRA Says (really and truly… they said it here)
The Canada Revenue Agency uses a variety of tools and methods to identify non-compliance and take action to address tax cheating, as well as to correct honest mistakes. In 2007-2008, the CRA:

• Obtained more than 761,000 tax returns from individuals and corporations who had failed to file;
• Made over 1 million adjustments to individual tax returns after comparing the information reported by taxpayers with data filed by third parties, such as employers;
• Conducted over 350,000 audit and review actions, including about 17,300 underground economy audits, and more than 1,100 audits of taxpayers suspected of earning income from illegal activities
• Reviewed nearly 4,000 businesses to ensure they were maintaining proper books and records
• Undertook legal action that resulted in the conviction of 1,296 taxpayers who had not filed tax returns or not registered for goods and services tax/harmonized sales tax (GST/HST)
• Referred 243 income tax and GST/HST criminal investigations for prosecution. Of the prosecution cases completed in the past year, 96% resulted in convictions
• Reassessed over 20,000 individuals who had participated in one or more of 20 unacceptable tax shelter gifting arrangements, and
• Recovered $11.9 billion through collections activities

I can hear you sweating (I would use a slightly different word with a one letter change, but it might be frowned upon).

But Wait! There IS a solution

You have 2 weeks left to prepare and file your taxes before April 30th.

Before you go to the expense of rushing off to an overworked, underpaid accountant who is already dealing with 8,723 other frantic last minute filers, try QuickTax online for free. Seriously, it really is free if your taxes are uncomplicated. If they are slightly complicated (most of us fall in this category) you’ll be hit for all of $14.99 – but ONLY when you print, or file online via NETFILE. Your entire preparation and review of refund or taxes owing is free.

QuickTax online also has a more advanced (though just as intuitive) Platinum edition for advanced taxes including investment and rental income ($29.99), as well as an unincorporated business tax edition ($39.99).

If you are incorporated, or wary of online tax filing, all the editions (plus Basic) come in CD and Download tax software versions as well, as does the unincorporated tax edition.

If you file online via NETFILE, you will get your refund (if you are due one) in as few as 8 days). If you require support at any point, the support is fantastic.

Some thoughts to help you make your decision

• Get your taxes done yourself in your own time, including all your income, deductions and credits (the QuickTax software will help you with this)
• Do your taxes, fast
• See your refund, or what you owe, immediately you enter your information
• Get your refund, fast (in as few as 8 days if you file with NETFILE). The QuickTax software will prompt you at the end of your preparation to file with NETFILE or print, and it will provide you with the NETFILE web address to make filing easier for you
• Get your MAXIMUM refund - guaranteed
• Keep the CRA happy, and save yourself a lot of heartache, time, confusion and money

And Finally…
Don’t wait, time is short. Get what you are due if you are due a refund, and make your life easier by quickly and easily figuring and paying what you owe – if you owe any money. May this tax year be less stressful than last, and may next year be less stressful too. You can carry QuickTax returns over year on year… it really does make life, and tax season, better.