6 Things The Montana Group Learned from Our Co-op Student

The Montana GroupNear the end of February this year, I took on the responsibility of a co-op student from the York Region District School Board. As a co-op placement, their time was at no cost to me.  I was very hesitant initially since there were as many bad experiences I’d heard from other employers as there we good experiences.  I told the high school counselor that was looking for placements that the student would be treated the same as any adult looking for a full-time position.  That meant a full interview after I reviewed the resume, and a police criminal check was required. This was not going to be a body that filled a chair 4 afternoons a week. I needed a fully committed worker with an aptitude for numbers and willingness to learn and work.  The learning part included QuickBooks, an introduction to Personal Tax Returns and dealing with clients in person and on the phone. As we were going into tax season, there was no time available for someone who wasn’t committed to their success and that of the business. What I didn’t anticipate were all the things The Montana Group would learn from our co-op student, itemized below in 6 points.

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Look For the Wagemark Label

wagemarkI recently read an article by Carol Goar in the Toronto Star about the Wagemark label.  This was introduced in Toronto July 17th of this year by founding director Peter McLeod. On July 24, 2013 it was mentioned on a New Zealand post.

The concept of it is “to create a common standard for wage-responsible businesses”. To display the Wagemark insignia a company must pay its chief executive no more than eight times the amount its lowest paid worker earns. The article also went on to say that currently the chief executives of Canada’s top 100 corporations, make 235 times the average worker’s pay. Wagemark certified organizations commit to capping top compensation at eight times the wage of their lowest paid decile (definition of decile – I had to look it up)  of employees.

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Canadian Parent’s Guide to the Student Moving Expenses Tax Deduction

11774830_sI know from the experiences of my nieces and nephews, and brothers, that it is a major event when the young adults move away for school.  It’s not just the emotional and tuition costs but also the selection of the new home. In addition, the transporting of furniture and the associated costs can play havoc with a parent’s budget.  I’ve mentioned the Moving Expenses Deduction available for personal tax returns to family, friends and clients but very few seem to want to take advantage of it when preparing personal tax returns for the students.  Some of the reasons for ignoring this potentially valid tax savings are; I didn’t keep the receipts, it’s too complicated, it’s not going to help me, or I don’t know where to start.  So as the exodus from family homes begins in a month or so, I thought I would share the simplified version of preparing for and the preparing of the Moving Expenses Deduction (CRA form T1-M).

Who qualifies?

If you move to study courses as a student in full-time attendance at a university, college or other educational institution that offers courses at a post secondary school level, you would qualify. The institution can be in Canada or not.

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1-2-3 QuickBooksTM Training in Newmarket Ontario

3540678_mAs a QuickBooksTM Pro Advisor here in Newmarket, Ontario, one of the key question clients ask me when looking for QuickBooksTM training is; “How long do you think it will take for me to learn what I need to know to do the bookkeeping for my company?”  The answer is not straight forward if I don’t have all the facts i.e.; Have you done bookkeeping before? Have you used accounting software before? If yes to either of those questions then;

  • How long ago,
  • What type of software and
  • What type of business was it?

If you did bookkeeping on the old one-write system, I can’t assume you’ll grasp the concept of computerized bookkeeping.  Once I have a better understanding of your experience I can suggest the amount of time I think it will take. The following is the guideline I use when doing QuickBooksTM training.

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T5018s – What You Need to Know

21945782_sWell we’re coming up to the 6 month deadline for reporting payments made to subcontractors for construction services for 2012.  Most of my clients report on an annual December 31st basis but those that are incorporated, report based on their year end. The reporting of T5018s is The Contract Payment Reporting System (CPRS) which must be filed with the Canada Revenue Agency (CRA) annually. This system became mandatory in February of 1998. Here is what you need to know.

A subcontractor, according to the CRA, is an individual, partnership, or corporation that provides constructions services.  It doesn’t matter if the individual or company does not have a GST/HST number, or if their revenue is under $30,000.  If the total amount of services supplied is $500 or more per year it must be reported.  If an individual or business does not have a Business Number (BN), which is the same as the GST/HST registration number, then they must supply their Social Insurance Number (SIN).

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5 Client Surprises this 2013 Canadian Tax Season

bigstock-Tax-Worry-3308866Well the personal tax return season rush is basically over but I will continue preparing tax returns for 2012, and prior years, for the balance of the year. While reflecting on the achievements of our 2012 tax season I’m reminded of the clients surprised by information I shared with them.  Here are 5 significant 2013 Canadian client surprises this season:

1.    RESP Funds Received.  The surprise was that the money was taxable. The good news is that the money is taxed to the student, who usually doesn’t have a lot of income that year and tax payable is minimal, if any.  A T4A slip is received from the investment source and the amount is recorded in Box 42.

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10 Key Issues Regarding the Ontario Healthy Homes Renovation Tax Credit

chair liftThe Ontario government introduced the Ontario Healthy Homes Renovation Tax Credit (OHHRTC) to help make homes safer and more accessible for seniors 65 years or older. This credit could create a substantial refund for some taxpayers. The following are 10 key issues you need to know about this tax credit.

1. This refundable credit is available to a senior in their own home or that of another taxpayer living in the same home. An example would be a parent aged 65 or older living with a son or daughter. The improvements to the home and the subsequent tax credit can be used by the younger taxpayer.

2. The senior does not have to be disabled.

3. The maximum amount you can claim is $10,000 in eligible home improvements. The amount of money you could receive back is 15% or $1,500.

4. The credit is not dependent on income.  Seniors and their family members at all income levels are eligible.

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Importing the Accountant’s Copy in QuickBooks

QuickBooks Pro AdvisorOne of the challenges we have in working with client files is sharing the QuickBooks information.  This occurs when the client likes to access their file on a regular basis and we need access to it at the same time, to determine payroll, WSIB and GST/HST remittances.  And due to accessibility or speed sometimes logging into the client files remotely just isn’t the best answer.  What we do instead is ask the client to make an Accountant’s Copy of their file and email it to us.  With our copy we can reconcile the bank, make adjusting entries and almost anything else we need to do while the client can still work on their file.  The only frustration the client has had when we’ve finished with their file is incorporating the file we send back to them with the one they’ve been working on.  The following is the process we now give our clients to enable a smooth blending of the files.

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Power of the Family Responsibility Office (FRO)

15403967_sThe Family Responsibility Office (FRO) enforces child and domestic support orders and collects support payments for families. They help nearly 400,000 people every year in the Province of Ontario.

I have clients that ensure their payments are made in full and on time through pre-authorized debits from their bank account and directed to FRO. A problem we have on an annual basis is the CRA not recognizing the deduction for spousal support on personal tax returns.  For the past 8 years one of my clients gets a Notice of Reassessment stating “We have disallowed your deduction for support payments to a spouse or common-law partner.  You can deduct only support amounts paid under a written agreement or court order that are more than the child support payable for current and prior years”.  Each year we have to send exactly the same written agreement to the CRA and they then reverse their assessment. No conversations take place, no explanation of why it has to be sent year after year, it just does. And it is very stressful to those that receive the first Notice of Reassessment. When initially they thought they were getting a refund of $4,000, the CRA is asking them to pay $3,000!

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1 Cent – Phasing Out The Canadian Penny

872740_sEffective February 4th, 2013, the Royal Canadian Mint will no longer distribute pennies. In the March 2012 Federal Budget Finance Minister Jim Flaherty said it cost roughly 1.6 cents to make each penny.  This phasing out of the Canadian penny will supposedly save taxpayers $11 million dollars annually.

So how are vendors and consumers supposed to handle the demise of the penny?  February 4th is the date businesses will be encouraged to begin rounding transactions. The penny will still be acknowledged in financial transactions if payments are made by cheque, debit, charge cards or electronic transactions.  Cash transactions are to be rounded to the nearest five cent increment.

Below is a guideline supplied by the Department of Finance Canada to illustrate how cash transactions will be rounded in a fair and transparent manner.

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