Tenant & Landlord Rent Receipts – What you Need to Know

bookkeeping services Newmarket

I covered this topic briefly a few years ago but all through this past tax season numerous questions and situations continued to arise as to what is acceptable and what to do if audited by the Canada Revenue Agency (CRA) when it comes to tenant and landlord rent receipts. Here is some information on what you need to know and what you will need to supply if requested.

Since the credit varies by province I will address what the CRA across Canada requires and then for the province of Ontario only.

First let’s look at the process when preparing a personal tax return. The form name when preparing an Ontario Income Tax and Benefit Return is called ON-BEN. ON-BEN is also used for credits relating to:

  • Property tax paid
  • Student residence
  • Long term care facility and,
  • Living on a reserve

I will only be addressing the rent aspect of the form. You will need the following information for each address that you are claiming the rent expense for:

  1. Address
  2. Postal code
  3. # of months residence in the tax year (this number cannot exceed 12 so be cautious of how you claim last month’s rent, or prepaid rent)
  4. Total amount of rent paid in that year for that address
  5. Name of landlord

The CRA will not accept a lease agreement, as that is only an agreement between you and the landlord.

The CRA will accept cancelled rent cheques. If they are photocopies, then front and back are required.

Be proactive when meeting with a prospective landlord. Ask the question – Will you be supplying me with a rent receipt? And get that in writing. If you’re paying month to month, get a rent receipt each month. Some landlords insist on post-dated cheques. If that’s the case then ask for a rent receipt covering the post-dated cheques. It’s better to know where you stand with your landlord at the beginning than being refused receipts one or two years later when the CRA is requesting copies and you lived at a number of addresses since then.

To calculate if you are eligible for the additional credits generated by the rent you pay in Ontario please click here.

Please click here to view/print a sample of a receipt that would be accepted by CRA and applies to all of Canada.

As always, I welcome your feedback. You can leave a comment right here on the site.

Until next time,

Maureen

Lying to Revenue Canada about Foreign Property or Investments?

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Specified Foreign Property (SFP) includes: Continue reading

3 Questions to Ask a Prospective or Current Bookkeeping Provider

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1.  Do you offer fixed price invoicing?

Fixed pricing is an agreement between you and your provider which details what and when you the customer, will supply your provider with information. It also details what the service provider will do with that information. Whether it’s: Continue reading

3 Problematic Responses to Probing Bookkeeping Questions

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Tax Audit from Hell? – Part 2

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In my previous blog, I finished with the auditor’s request for a 2011 personal breakdown of expenses and income. And, the income wasn’t just related to T4s and Child Tax Benefits. It related to every deposit made to all of their bank and investments accounts along with that of their children for all of 2011. The auditor wanted closing balances of all their accounts at 2010 and opening balances for 2012 which included but wasn’t limited to: Continue reading

Are you Prepared for an Audit from Hell? – Part ONE

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5 Tips & Tricks for QuickBooks Online (QBO)

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1. In order for you to allocate the GST/HST in QBO you must first set-up Sales Tax. You do this by selecting the Sales Tax tab from the menu bar and follow the on screen guidelines. QBO then automatically adds two default accounts; GST/HST Payable and GST/HST Suspense. You cannot allocate a payment amount directly to the GST/HST Payable account. But, you can allocate it to the GST/HST Suspense account. If you can’t easily relate to the word Suspense you can rename it to something that will be more familiar to you i.e. Clearing. Continue reading

Time to Move from QuickBooks Desktop to QuickBooks Online (QBO)?

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Reducing Canadian Payroll Taxes with a Tax Waiver

reducing taxesIt makes a world of difference to all business owners in surrounding themselves with intelligent and professional associates. Carolyn Bogseth is one of my associates that I certainly respect for her intelligence and genuine desire to help those she meets. Whether they are her clients or someone that would like a general investment question answered she will take the time to assist those who contact her. Below is an excerpt from her recent newsletter outlining how reducing payroll taxes can help you. Continue reading

2 Great Accounting Software Deals for Businesses

cost savingsI’ve been in the accounting, tax preparation and training business for a number of years. And over those years, I’ve developed some great relationships with customers and vendors. So it has to be big for me to get excited about sharing these 2 great accounting software deals for businesses.

Whether our businesses are operated by a single person or 20 employees, we all have challenges. For the purpose of this blog I’m referring to great software at a good price and handing over the responsibility of payroll to a 3rd party provider.

Continue reading