Koroll & Company Blog

The start of fall marks a lot of things, among them a number of runs, walks, and other similar events held to raise money for a broad range of Canadian charities. And, in a few months, as the holiday season approaches, charities will launch their year-end marketing campaigns.

Canadians have a well-deserved reputation for supporting charitable causes, through donations of both money and goods. Our tax system supports that generosity by providing a tax credit, at both the federal and provincial/territorial levels, for qualifying  donations made.

Each spring, Canadians are required to fulfill two tax obligations. The first is the requirement to file an individual income tax return providing details of income earned, deductions and credits claimed, and the amount of income tax payable for the previous calendar year. The second such obligation is to pay any amount of income tax owed for that year which is still outstanding. And although the Canadian tax system is for the most part a voluntary self-reporting and self-assessing one, most Canadians do comply with those two obligations in a timely way.

When it comes to questions around personal finance, two issues tend to dominate current discussions. The first is whether and to what extent Canadians are financially prepared for retirement, and the second is the seemingly inexorable increase in the value of residential real estate. For many retired Canadians, those two issues are very much interlinked. 

Most Canadians are eligible to receive Canada Pension Plan(CPP) and Old Age Security (OAS) payments in retirement. While those two programs provide the “backbone” of retirement income in Canada, they are almost never enough, on their own, to provide for a comfortable standard of living in retirement.

Having access to mobile communications is useful and practical for any number of reasons. In fact, Canadians who don’t have a cell or smart phone are likely now the exception, rather than the rule. But, did you know that cellphone rates payable by Canadians are among the highest in the world? As such, having an employer provide a cellphone (and pay the associated costs) is consequently a valued employment benefit.

That being said, Canadians who enjoy such an employment benefit should be aware that, while they may not have to pay a monthly cell phone bill, there still can be a cost in the form of a taxable benefit, as with an employer-provided vehicle, which must be reported on the annual return.  

Teaching supplies can be expensive and while many schools provide the essentials, teachers are often expected to contribute their own art supplies, educational decor, puzzles/games and similar items. While these items may not be seen as essential to a child's education they are important in providing students with a positive learning environment.

It's for this reason that the Government of Canada has decided to reward the generosity of teachers and educators across Canada with a new tax credit called the Teacher and Early Childhood Educator (ECEs) School Supply Tax Benefit. 

While our health care system is not without its problems, Canadians are fortunate to benefit from a publicly funded system in which individuals are not required to pay personally for the cost of necessary medical care. Generally speaking, acute care provided in a hospital setting is covered by that system, as is more routine care provided by physicians in their offices. 

Canadians who, as the result of illness or accident, require care in our medical system are nonetheless often surprised to find that there is a long and ever-increasing list of expenses which are not covered by government-sponsored health care, or for which the individual is required to make at least a partial payment.

By the time this summer reached the halfway mark, most Canadian taxpayers have filed a tax return for 2015, received a Notice of Assessment with respect to that return, and considered that their income tax obligations for this year were complete.

For a significant number of those taxpayers, however, the filing of that return will trigger the issuance of a 2016 Tax Instalment Reminder from the Canada Revenue Agency (CRA), and that reminder will show up in their mailboxes sometime during the month of August. On that form, the CRA will suggest to the recipient that he or she should make instalment payments of income tax on September 15 and December 15, 2016, and will identify the amount which should be paid on each date.

The fact that the cost of residential real estate in Canada’s largest cities has reached unaffordable levels for most Canadians, especially young families, isn’t really news any more. What’s relatively new, however, is that significant price increases are now being seen in cities which are within daily driving range of those major cities, presumably as individuals and families move further and further out in search of affordable housing.