Koroll & Company Blog

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.

As the summer starts to wind down, students returning to their post-secondary institutions, and those just starting post-secondary education, must focus on the details of the upcoming school year: finding a place to live, choosing courses, and — perhaps most important — arranging payment of tuition and other education-related bills.

Home renovations are big in Canada right now, as many homeowners are opting to make changes and/or additions to their current residences rather than try to find a new home in the current real estate market. And, while the cost of renovating one’s home is usually considered a personal expense, which doesn’t qualify for any tax credit or deduction, starting this year there is an exception to that rule.

For 2016 and subsequent taxation years, a non-refundable tax credit can be claimed for home renovation work that's completed to make it easier and/or safer for a senior or disabled individual to live in their home.

Complete, accurate and readable records will make a Canada Revenue Agency (CRA) audit less onerous.

Regardless of whether your business is a proprietorship, a partnership or an incorporated company, the CRA requires the business to maintain financial books and records. Here are a few ofthe CRA’s record-keeping requirements you should know about.

By now, most Canadians are familiar with the use and the benefits of a tax-free savings account (TFSA), which has proven to be a very popular savings vehicle since TFSAs were introduced in 2009. What’s been harder has been keeping track of one’s annual TFSA contribution limit.

The annual TFSA contribution limit allowed by law has been something of a moving target, subject to change after change by successive governments. As well, withdrawals made from a TFSA are added to one’s annual contribution limit, but not until the following taxation year – a fact that has escaped many TFSA holders and sometimes even their financial advisers. And finally, the Canada Revenue Agency (CRA) used to provide information on a taxpayer’s current year TFSA contribution limit on the annual Notice of Assessment, but that’s no longer the case, meaning that the taxpayer has to make an extra effort to obtain that information.

For most of the year, taxpayers live quite happily without any contact with the Canada Revenue Agency (CRA). During and just following tax filing season, however, such contact is routine – tax returns must be filed, Notices of Assessment are received from the CRA and, on occasion, the CRA will contact a taxpayer seeking clarification of income amounts reported or requesting documentation for deductions/credits claimed on their annual return.

By the end of June, all individual taxpayers should have filed their 2015 income tax returns and most will have received a Notice of Assessment (NOA). This assessment will outline the Canada Revenue Agency’s (CRA’s) conclusions with respect to that taxpayer’s income and tax position for the year. In most cases, the Notice of Assessment won’t vary a great deal from the information provided by the taxpayer in their return. When it does vary, and the change is to the taxpayer’s detriment, taxable income assessed is greater than the amount reported by the taxpayer, or a deduction or credit is denied, then the taxpayer has to decide whether they want to dispute the CRA’s assessment.