Koroll & Company Blog

The principal residence exemption provides Canadian taxpayers with substantial tax relief.

When you sell property, you realize either a capital gain or a capital loss. A capital gain will occur if you sell your property for more than you paid to acquire it and make improvements, known as capital costs. The opposite is true for a capital loss.

While it would seem like good news to find out you made a profit on the sale of the property, the existence of a capital gain means that you have an additional tax liability. 

If, however, the property was your principal residence for all or part of the time you owned it, you may be able to avoid all or some of the liability.

If you or your spouse or common-law partner are self-employed, the last day to file your 2016 income tax return is June 15, 2017. If you do so by this date, you will not incur a late-filing penalty.

You will not, however, escape interest for unpaid balances owing.

As per legislation, any balances owing, on your income tax return are due on April 30 unless April 30 falls on a weekend. 

Please note that because April 30, 2017 was a Sunday, the due date for balances owing on your 2016 return were due May 1, 2017.  

For several years, the Canada Revenue Agency (CRA) has been encouraging taxpayers to manage their taxes and benefits online, through the CRA website, and has been largely successful in that effort. More recently, the Agency has taken the next step, by creating mobile apps which taxpayers can use to obtain most of the same information, and carry out many of the same tasks, as can already be done online.

For individuals, there are currently two such apps – MyCRA and MyBenefits CRA. The former gives users access to a range of information about their own tax affairs, as well as more general information about the CRA’s services, as follows:

Older taxpayers who have recently completed and filed their tax returns for 2016 may face an unpleasant surprise when that return is assessed. The unpleasant surprise may come in the form of a notification that they are subject to the Old Age Security “recovery tax” – known much more familiarly to Canadians as the OAS clawback.

The OAS clawback is a product, in part, of the way in which Canada’s government-sponsored retirement income system is structured. OAS is one of the two main components of that system – the other being the Canada Pension Plan (CPP).

While many retired Canadians receive both OAS and CPP benefits, the two plans are quite different. 

As just about everyone knows, individual income tax returns for the 2016 tax year should have been filed, by most Canadians, and any tax balance owed must've been paid by all individual Canadians, on or before May 1, 2017. And, most Canadians do file that return, and pay any tax balance owed, on or before the deadline.

As of April 24, 2017, the Canada Revenue Agency (CRA) had received just over 18 million individual income tax returns for the 2016 tax year. There are, however, a significant minority of Canadians who don’t file a return, or pay taxes owed (or both) by the annual deadline.

The Canadian tax system is in a constant state of change and evolution, as new measures are introduced and existing ones are “tweaked” through a never-ending series of budgetary and other announcements.

However, even by normal standards, 2017 is a year in which there are larger than usual number of tax changes affecting individual taxpayers. And, unfortunately, most of those changes involve the repeal of existing tax credits which are claimed by millions of Canadian taxpayers.

For the majority of Canadians, the due date for filing of an individual tax return for the 2016 tax year was May 1, 2017. (Self-employed Canadians and their spouses have until June 15, 2017 to get that return filed.) In the best of all possible worlds, the taxpayer, or his or her representative, will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency (CRA) will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and tax result obtained by the taxpayer.

Not infrequently, though, the taxpayer realizes that information has been inadvertently misstated, or perhaps omitted because an information slip was received (or located) after the return was filed.

In such situations, the taxpayer is often at a loss to know how to proceed, but the process for amending a return is actually quite straightforward.

Many Canadians are called upon to act as a caregiver for a family member who either cannot live independently or who requires varying degrees of assistance in order to be able to continue to live on their own.

Sometimes that family member is a disabled adult child, while in other cases it’s an aging parent who needs help.

Whatever the circumstances, caregiving is a demanding and often stressful role. And, while such caregiving imposes demands on caregivers in a number of areas, one of those demands is almost always financial. Sometimes that takes the form of financial support, or disability-related costs incurred for the dependent relative, while in other cases a caregiver’s income is reduced because of the need to re-allocate time from paid employment to unpaid caregiving.

The Canadian tax system recognizes the financial costs which are borne by caregivers and has, for many years, provided those caregivers with the opportunity to claim tax credits, which seek to mitigate those financial costs.