New and Often Overlooked – Preparing for Your 2016 Personal Tax Return

Written by: Gwyneth James MBA CPA, CGA, Senior Partner

Another year, another tax season. And as with most tax seasons, there are a few changes to be aware of.

This year the change that has caused the most attention – and misinformation – is the declaration of the sale of your principal residence. NO, the tax exempt status of capital gains on your home has not changed. However, starting with sales in 2016, you must report that you sold it and the sale price. This also applies if you changed its use, for example, if you moved out and turned your house into a rental property.

The federal government has introduced a new Home Accessibility Expense Credit which replaces the version Ontario has had for the past 5 years and expands it to include any individual who qualifies for the Disability Tax Credit (in addition to anyone age 65 or older). Certain renovations, up to a maximum of $10,000, will result in a non-refundable tax credit of 15%. If the renovations also qualify for a Medical Expense Tax Credit you are allowed to receive both credits!

Many people engage a professional to prepare their tax return assuming that will ensure nothing is missed, but even the pros can only work with what information they are given and there is a limit to the number of questions they will ask. Here are some areas that frequently get missed:

  • “Medical Expenses” includes such things as dental costs, hearing aid batteries, and travel health insurance
  • There’s a tax credit if you pay for a monthly bus pass. It’s more common in larger centres so often gets overlooked here in Peterborough.
  • If you moved 40 km closer to your employer or to start a small business, that’s a deductible expense.
  • If you are receiving pension or RRIF income it can be split with your spouse and will often result in tax savings. You need to complete and sign a special election form.

So You Want To Start a Business….

Written by: Gwyneth James MBA CPA, CGA, Senior Partner

You have an idea, a talent, an itch to be an entrepreneur. How do you make it a reality? There are many books written on the subject and your friends have lots of opinions, but where you really should start is with a free meeting with an expert. There are three main options in Peterborough:

  • The Business Advisory Centre at the offices of Peterborough Economic Development (210 Wolfe Street) has free advice on starting a small business and they frequently have free sessions with local professionals.
  • The Peterborough Community Futures Development Corporation (351 Charlotte Street) also provides free advice with the added benefit of offering small loans and grants to successful applicants.
  • The Greater Peterborough Innovation Cluster (270 George Street) has Entrepreneurship & Small Business Programs and mentorship from local business leaders.

In addition, both the provincial and federal levels of government have websites dedicated to the subject which are packed full of information. A quick Google search using “starting a business in Ontario” will get you started.

You need to do research and you need a plan. Specifically, you need to research how your idea would stack up in the marketplace – these are known as the 4 Ps: pricing, product definition, promotion strategies, and place (where to sell). Once you have that information and have made your sales projections you need to find out all the potential costs and do a financial plan showing the cash flows.

It’s easy to come up with business ideas, but not as easy to actually launch and build a profitable business. Many start-up businesses fail in the first few years so make sure you do your homework!

Schedule your free 30-minute consultation today for more advice!

The Accounting Zone – November 2016

The November 2016 edition of The Accounting Zone has been released.

Click here to read the latest Accounting Zone newsletter.

In this issue;

  • Are all employee leaves of absence the same?
  • What the heck are preferred shares anyway?
  • Furious! Employer not charged in employee’s death while at work.
  • Make informed financial decisions – Financial Literacy Month is here!
  • Tax Planning – Do you want to know how to minimize the damage before it’s too late?

Subscribe to our monthly newsletter on our home page today and never miss another accounting tip!

Employment Standards Act, Part 3

Written by: Gwyneth James, MBA CPA, CGA, Senior Partner

This month we finish our review of the rules found in the Employment Standards Act (ESA) which is managed and enforced by the Ontario Ministry of Labour. These rules provide direction with respect to paying your employees, but there are certain individuals and organizations that the ESA does not apply to. An example is companies that fall under federal employment law jurisdiction.

Examples of what is covered by the ESA are: minimum wage, overtime, tips and gratuities, hours of work, public holiday pay, vacation pay, leaves, and termination. (See Part I and II for the first 6 of these.)

There are many types of leaves allowed by the ESA – pregnancy, parental, family caregiver, reservist, etc. A leave is unpaid, but the employee’s position, seniority and benefits must continue through the period and an employer cannot penalize the employee in any way. In some cases, the employee will qualify for Employment Insurance benefits for part or all of the leave period.

The ESA requires employers to give either written notice, pay in lieu of notice or a combination if they dismiss an employee after 3 months without cause. These notice periods do not apply if there is a well-documented cause for the termination.

The amount of notice or termination pay depends on how long the employee has been employed. The lump sum payment of termination pay must be treated like any other payment of wages with vacation pay applied and payroll deductions withheld.

Severance pay is separate and in addition to termination pay, but only applies when an employee has worked for 5 or more years for an employer with a payroll of $2.5 million or more. The amount paid also relates to the years of service.

As always, there are exceptions so checking the Special Rule Tool is wise.

The Accounting Zone

Our latest newsletter from The Accounting Zone is now available!

In this issue;

  • Top 5 signs you are an “Anti-preneur”
  • Is your marketing budget giving you the ROI you expect?
  • Introducing the Cody & James team.  Meet Pam – baker extraordinaire!
  • 8 Things every student needs to know about their taxes….NOW!
  • Does WSIB Bill 119 still have you confused?  Attend our information session

Click here to read our latest issue of The Accounting Zone.

To sign up to receive The Accounting Zone, please visit our home page.

Employment Standards Act – Part 2

Written by:  Gwyneth James MBA CPA, CGA, Senior Partner

This month we continue our look at the rules found in the Employment Standards Act (ESA) which is managed and enforced by the Ontario Ministry of Labour. These rules provide direction with respect to paying your employees, but there are certain individuals and organizations that the ESA does not apply to. An example is companies that fall under federal employment law jurisdiction.

Examples of what is covered by the ESA are: minimum wage, overtime, tips and gratuities, hours of work, public holiday pay, vacation pay, leaves, and termination. (See Part I for the first 4 of these.)

There are 9 Public Holidays (“Statutory” Holidays) in Ontario for which employees can take the day off work and be paid. The amount they receive is calculated as the average of the wages and vacation pay (not overtime) from the past 4 work weeks, divided by 20. The same calculation is used if an employee works; however in addition, they are either paid overtime pay for the hours worked or paid regular pay and given a substitute day off. Some jobs are exempt from public holiday pay. Note: The August Civic Holiday is not one of the public holidays.

Vacation pay is compulsory at 4% of earnings, including holiday pay and overtime. It is typically accrued and paid out when the employee takes a vacation. After one year of employment the employee should have two weeks’ worth of pay accumulated that they can ‘cash in’ for time off. The vacation time earned must be taken within 10 months. Employees can forego vacation time with written agreement from the employer, but the employer still must pay the vacation pay. There is no requirement to increase this rate or the weeks of vacation earned after certain years of employment. Very few jobs are exempt from vacation pay.

For more information please contact our office at 705-876-6011 or use our contact form by clicking here.

1-888-511-2791
info@codyandjames.ca