Koroll & Company Blog

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.

There has been much discussion, in recent years, about whether Canadians are adequately prepared for retirement and, more specifically, whether Canadians are saving enough to ensure a retirement free of undue financial stress. While the financial health of current and soon-to-be-retirees is a concern, the more pressing question is whether, under our current system, younger Canadians can expect to have some degree of financial security in retirement.

By the beginning of June, most taxpayers have filed their annual return for the previous year and have most likely received a Notice of Assessment (NOA) for that return, containing the good or bad news about their tax situation for the year. At this point, most Canadians are probably happy to put taxes out of sight and out of mind until next year’s filing season rolls around. For a number of reasons, however, that’s not the best strategy.

The mid-point of the year is, in fact, a very good time to take a look at one’s current year tax situation, to determine whether things are on track for the year or, if not, how to make things right while there’s still time to do so. There are a few basic steps which require no more than a few hours’ time to make sure of just that.