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Five Steps To Calculating 2015 TFSA Contribution Room

Five Steps To Calculating 2015 TFSA Contribution Room -

Five Steps To Calculating 2015 TFSA Contribution Room

A new version of form RC343 has been released by the CRA to calculate TFSA contribution room for 2015, taking into account the new 2015 contribution limit of $10,000.
The new form is available here.  Here’s how the calculations work:
1. Start with your TFSA contribution room as of January 1, 2014
2. Subtract any TFSA contributions made in 2014
3. Add any TFSA withdrawals made in 2014
4. Add $10,000 (your new  TFSA contribution limit for 2015)
5. If you’ve already made TFSA contributions for 2015, subtract those
Here’s an example:
Joni had  TFSA contribution room of $12,000 as of January 1, 2014, including the $5,500 of new contribution room for 2014. She made a $10,000 TFSA contribution in 2014 and withdrew $15,000 that same year. She has not made any contributions in 2015 yet.  Following the steps outlined above, her 2015 TFSA contribution room is:
1. $12,000
2. - $10,000
3. + $15,000
4. + $10,000
5. - $0
Total: $27,000
Beware of TFSA Traps:  The biggest trap, other than holding non-registered investments outside a TFSA when there is contribution room available, is recontributing to the TFSA in the same year as the withdrawal is made. Withdrawals do increase TFSA contribution room, but not until the beginning of the following year.
In the example above, after her $10,000 contribution, Joni’s TFSA contribution room for 2014 was reduced to $2,000. Her $15,000 withdrawal did not open up contribution room until January 1, 2015. If Joni had re-deposited the $15,000 in 2014, she would have had a $13,000 excess contribution. All excess contributions are subject to a 1% penalty tax for each month they remain in the TFSA.
For these reasons, it’s important for wealth advisors to encourage their clients to seek their assistance or consult with  A Tax Services Specialist  before withdrawing money or recontributing it to a TFSA.

Adjusted Family Tax Cut: Was Spouse A Student?

Adjusted Family Tax Cut: Was Spouse A Student? - Family Tax Cut: Was Spouse A Student?

Last week, CRA reminded families to apply for the generous new Universal Child Care Benefit (UCCB) being delivered to families this week. But there may also be more good news:  enhanced Family Tax Cut dollars available for the 2014 tax filing year for families in which one spouse was a full- or part-time student... $2 to $750 more in fact.
The calculations for the Family Tax Cut have recently been adjusted to take into account the unused portion of tuition, textbook and education credits transferred from a spouse or common-law partner. The result is an additional refund of somewhere between $2 and $750, according to the CRA, which will do the calculation automatically if it looks like the family might qualify for the adjustment.
To be sure, however, qualified  Tax Services Specialist  should be consulted to review the calculations for their clients who  have made a tuition, textbook and education credit transfer to their spouse on line 326 of the 2014 T1 return and determine if any other adjustments should be made to the tax return.  Then, find out what your estimated Family Tax Cut will be in 2015 to maximize your investment planning opportunities.
The adjusted calculation can be found on line 499 on the new Schedule 1A, released on June 25:

The Rule of 72

The Rule of 72 -
The Rule of 72

Written by Sarah Milton
“Compound Interest is the eighth wonder of the world.” – Albert Einstein
Einstein described compound interest as the eighth wonder of the world because he felt that those who understood it, earned it and those who didn’t, paid it. Compounding is what makes saving early and saving regularly such a powerful part of building wealth and it’s also what makes it so hard to get out from under the mountain of consumer debt that so many of us accumulate. In an nutshell, compound interest is earning (or paying) interest on interest. When you earn interest at a compounded rate, your money grows faster because you are earning interest on your total balance (principal + interest) rather than on the principal alone. Similarly, when you pay interest at a compounded rate (as you do with credit cards) your interest charges grow much faster and your debt load gets larger.
We can see the power of compounding in the table below, which shows how $1000 earning 5% annual interest grows over time. The first column shows how the $1000 would grow earning 5% simple interest (earned on just the $1000 principal) and the second column shows how it would grow earning 5% interest compounded annually (earned on the principal + interest).
The Rule of 72
The rule of 72 is a simple way to estimate how long it will take your money to double in value at a given interest rate. If you divide 72 by the annual interest rate, the answer is the number of years it will take to double. For example, 72 divided by 5 is 14.4. This means that, as you can see in the table above, it takes just under 15 years for $1,000 to become $2,000. 15 years later (in year 30) the money has doubled again to be just over $4,000 and, 15 years after that (in year 45) it has doubled again to become more than $8,000. In year 60, it will have doubled yet again and become $16,000. Using this rule, it’s clear to see that both time and interest rate are two key factors in building wealth. At 8% interest, your money will double in 9 years (72 divided by 8 = 9) but it will take 36 years to double earning 2% interest. For a 20 year old, $100 invested at 7% is worth $2,100 at age 65. For a 30 year old, that same $100 invested at the same rate is only worth $1,068 at age 65 and for a 40 year old, $100 invested at 7% is worth just $543 at age 65. This means that, at 40 years old, even though I’m only twice the age of the 20 year old, I have to save four times as much each year in order to achieve the same level of wealth at age 65. It’s a concept that I wish I had understood as a teenager because I’m pretty sure it would have motivated me to manage my money differently!
At the end of the day, saving is always a very personal decision: the choices we make about whether to save, where to save and how much to save, vary enormously from person to person. However, all too often, I hear people in their twenties saying that they’ll wait to save until they’re older because then they’ll be earning more. When you consider how powerful a factor time is in the wealth building equation, it just doesn’t make sense (especially when you consider that just because you’re earning more doesn’t mean you have more discretionary income). If you can do as much with $25 at 20 as you can do with $50 at 30 or with $100 at 40, it makes sense to start the saving habit early.
Even if you feel like you’ve “missed the boat” because you should have started saving years ago, remember that whatever you save today has a greater power to grow than money you save next month, next year or 3 years from now. We can’t change our past choices but we always have the power to choose to change our financial future by making different choices today.

The Power of the TFSA

The Power of the TFSA
The Power of the TFSA
As the calendar year changed on January 1, so did the Tax Free Savings Account (TFSA) contribution room available to all adult residents of Canada. 
Although indexing did not increase the earned contribution room, everyone can now contribute at least $5,500 more to their TFSAs.  Those who made withdrawals in 2013 can now put back the money withdrawn in addition to the extra $5,500.  For those who have never made a TFSA contribution, the accumulated TFSA room is now $36,500 (less if they are between 19 and 24).
Through the power of tax-free compounding the TFSA can yield spectacular results, especially for those who are young enough for compounding to do its magic.
If you’ve put the maximum into your TFSA at the beginning of each year and it earned 5% income in each year, your current balance (after your last deposit) will be over $40,800.  See the table below.
YearContributionInterest EarnedEnding Balance2009$5,000$250.00$5,250.002010$5,000$262.50$10,512.502011$5,000$525.63$16,038.132012$5,000$801.91$21,840.032013$5,500$1,092.00$28,432.032014$5,500$1421.60$35,353.632015$5,500$1767.68$42,621.32
For the younger generation, consider the potential for a tax-free retirement.  Making the maximum contribution each year starting at age 19 would yield a nest egg of about $900,000 at age 60 (assuming 5% annual return, 2% inflation, no change in maximum contribution levels and no withdrawals).  Even in today’s dollars, that’s $400,000 in spending power.  For a couple that’s $1.8 million dollars.  Even assuming an extended 40-year retirement, that’s an indexed tax-free pension of over $74,000 a year ($33,000 in current dollars).

Pay Yourself First

Pay Yourself First
Pay Yourself First
Although submission of a TD1 form is not required each year, it’s always a good idea to ensure that your employer is not withholding more taxes than absolutely necessary – after all, it’s your money.
The TD1 form – 2015 Personal Tax Credits Return – along with its provincial counterpart, determines how much tax your employer (or other payer) will withhold from your payments. To ensure that you get the money all year long rather than a year from now when you file your tax return, update your TD1 whenever your family situation changes and check it at least once a year.  January is a good time to make that check.
On the TD1 you can claim your own personal amount ($11,327 for 2015), the amount for your spouse or common-law partner, amounts for eligible dependants, the caregiver amount, amount for infirm dependants, amount for pension income, tuition, education and textbook amounts, as well as amounts you are eligible to transfer from your spouse. Parents should note that the exemption for children under 18 is eliminated for 2015 unless the child is infirm.  Even for infirm children, the claim is reduced to $2,093 for 2015 (down from $4,313 for 2014).
A sister form to TD1: Form T1213 Request to Reduce Tax Deductions at Source for Year(s) ______ can also be used to reduce tax withholding for taxpayers who have RRSP contributions, Child Care Expenses, deductible support payments, employment expenses, carrying charges, charitable donations, rental losses or other significant tax deductions. For all expenses except deductible support payments which may be authorized for two years, you’ll need to file Form T1213 each year.  The form must first be sent to CRA for their approval before your employer is authorized to reduce your withholding tax.  Approval may take four to six weeks so the earlier you submit the form the better.

TFSA Withdrawals


TFSA Withdrawals

Here is the basic information regarding withdrawals from a tax-free savings account:

Withdrawals will create additional contribution room equal to the amount of the withdrawal, for deposits in future years (not in the year of the withdrawal).

Income earned in  and withdrawals from a TFSA will not affect eligibility for federal income-tested benefits and credits such as

guaranteed income supplement (GIS)

old age security (OAS)

age exemption tax credit

Any fees paid related to the TFSA will not be tax-deductible.

In kind withdrawals can be made, with the investments being transferred to a non-registered account, or as a contribution to an RRSP, subject to available RRSP contribution room.  When in kind withdrawals are made, the value of the transaction will be the current market value of the investment.  This will be the contribution amount if the investment is transferred to an RRSP.  If the investment is transferred to a non-registered account, the current market value at time of withdrawal will be the cost basis for the non-registered investment.  Any subsequent capital gain or loss when the investment is sold will use this value as the cost basis.
If the maximum has been contributed to a TFSA, and then a withdrawal is made, no further amount can be contributed (without penalty) until the following year.  On January 1st of the following year, the withdrawal amount from the previous year will be used to increase your regular annual contribution room.

Family Tax Cuts Could Fatten December Coffers

Family Tax Cuts Could Fatten December Coffers
Family Tax Cuts Could Fatten December Coffers
It’s always a good idea to re-evaluate the requirement to make the December 15 quarterly tax instalment payment (December 31 in the case of farmers) but this year end it’s even more important because the introduction of the Family Tax Credit for 2014, which has the potential to reduce family taxes by up to $2000.
Who has to pay taxes by instalment?  Those taxpayers whose net taxes owing is more than $3000 in 2014 and in either 2013 or 2012.  Net taxes owing include personal income taxes plus CPP and EI premiums owing on self employment.
What’s different this year is that couples with children at home (under age 18) where one spouse is in a higher tax bracket than the other are likely to benefit from the Family Tax Cut of up to $2,000.  The credit will be calculated on new form Schedule 1-A.

The New $2000 Family Tax Cut

The New $2000 Family Tax Cut -
The New $2000 Family Tax Cut
This new federal non-refundable credit will provide up to a maximum of $2,000 in tax relief to benefit one-earner or two-earner couples where one spouse’s income is taxed at a higher rate.
The higher income spouse can transfer up to $50,000 to the lower- income spouse. To qualify for the Family Tax Cut the taxpayer must
• be a resident of Canada at the end of the taxation year;
• have a spouse or common-law partner;
• have a child who is under the age of 18 at the end of the year and who resided with the taxpayer or their spouse or common-law partner; and
• not be confined to prison or similar institution for 90 days or more during the taxation year.
To claim the Family Tax Cut credit, couples must file income tax returns. Either parent can claim the credit but not both. However, if the parents of a child are divorced or separated, and have remarried or have a new common-law partnership, one parent in each of the new family may claim the credit of up to $2,000. The child must reside with each couple during the year in that case. If the parents have joint or shared custody, there may be cases where it is the same child who resides with each parent.
The Family Tax credit cannot be claimed for a year in which the couple does not file an income tax return; elects to split pension income; or in cases where one of the spouses becomes bankrupt.
The Family Tax Credit will be calculated as the difference between
·         the combined taxes payable (after all credits are claimed) by the couple, and
·         the combined taxes that would be payable by the couple, if the higher income spouse could have notionally transferred taxable income to the lower income spouse.
If the difference exceeds $2,000, then the credit would be limited to $2,000.


On June 20, 2014, the Honourable Jason Kenney, Minister of Employment and Social Development (ESDC), and Chris Alexander, Minister of Citizenship and Immigration, announced a comprehensive overhaul of the Temporary Foreign Worker Program (TFWP) and the creation of new International Mobility Programs (IMPs).
The new IMPs will incorporate those streams in which foreign nationals are not subject to a Labour Market Impact Assessment (LMIA), and whose primary objective is to advance Canada’s broad economic and cultural national interest, rather than filling particular jobs. The LMIA is a labor market verification process whereby ESDC assesses an offer of employment to ensure that the employment of a foreign worker will not have a negative impact on the Canadian labor market. Employers will be required to provide a variety of information about the position for which they want to hire a foreign worker, including the number of Canadians who applied for the position, the number of Canadians who were interviewed, and detailed explanations for why the Canadian workers considered were not hired.
The goal is to ensure the TFWP is only used as intended, as a last and limited resort to fill acute, temporary labour shortages when qualified Canadians are not available.
If you currently participate in the TFWP, or are intending to, find out more detailed information in the official federal government news release and Background Documents.
On June 1, 2014, amendments to the Immigration and Refugee Protection Regulations (Regulation) modifying working rights for foreign nationals, under the International Student Program (ISP), came into force.
Effective June 1, 2014, permits for off-campus work will no longer be required, nor will international students be expected to study full-time for a period of six months prior to seeking such employment.
The new rules governing off-campus work require that international students hold a valid study permit similarly to before, but moving forward, these study permits will not be obtained as easily as in the past. Previously, study permits were issued to students attending any type of educational institution, whether or not accredited or regulated. Such permits will now only be issued to students enrolled at a “designated learning” institution.
Consult the Government of Canada’s website for additional details.
Provincial/territorial updates
At the time of this release, all provincial and territorial jurisdictions have tabled their budgets. The CPA has prepared a Budget Report for each jurisdiction, all of which are available at the CPA’s website. This section of the CPA website is updated with new budget information as it becomes available.
The Nova Scotia government recently announced that the new statutory holiday to be celebrated on the 3rd Monday of February every year will be known as Heritage Day.
The first Heritage Day celebration will take place on Monday February 16, 2015.
Nova Scotia now joins the jurisdictions of Alberta, British Columbia, Manitoba, Ontario, Prince Edward Island and Saskatchewan, to celebrate a holiday in the month of February.
Access the official News Release for additional information.
The Ontario Government gave Royal Assent to Bill 14, Building Opportunity and Securing Our Future Act (Budget Measures), 2014which puts into effect the provisions presented on July 14, 2014.
Some of the payroll related measures included:
§  Retroactive tax rate changes for individuals whose incomes are in excess of $150,000
§  The introduction of an Ontario Retirement Pension Plan (ORPP) that would come into effect in 2017
§  The introduction of Pooled Registered Pension Plans (PRPP)
§  The proposal to amend Ontario’s Insurance Act which would require benefits from a long-term disability (LTD) plan to be insured
The Budget also discusses initiatives in other areas that may affect payroll including job training, hiring employees with disabilities and public sector pension plans.
For additional information, consult the CPA’s Ontario Budget Report. The CPA has also prepared a document with the top questions and answers regarding the retroactive tax rate changes.
The Canada Revenue Agency (CRA) has published an updated edition of the T4127, Payroll Deductions Formulas for Computer Programs to enable employers to implement the revised rates in their system effective September 1, 2014.
The September 2014 version of the Payroll Deductions Online Calculator (PDOC) that includes the Ontario tax changes is now available.
The CPA has forwarded a Legislative Briefing: Ontario Personal Tax Changes to its members.
On April 29, 2014, Bill 21, the Employment Standards Amendments Act (Leaves to Help Families), 2014, passed its third reading with all-party support in the Ontario legislature. The legislation has received Royal Assent and will come into effect on October 29, 2014.
The new legislative measures build on the existing
Family Medical Leave by creating three new job-protected leaves:
§  Family Caregiver Leave: up to eight weeks of unpaid, job-protected leave for employees to provide care or support to a family member with a serious medical condition.
§  Critically Ill Child Care Leave: up to 37 weeks of unpaid, job-protected leave to provide care to a critically ill child.
§  Crime-Related Child Death or Disappearance Leave: up to 52 weeks of unpaid, job-protected leave for parents of a missing child and up to 104 weeks of unpaid, job-protected leave for parents of a child who has died as a result of a crime.
A doctor’s note would be required to qualify for Family Caregiver Leave and Critically Ill Child Care Leave.
Access more information at the websites below:
On July 16, 2014, the Ontario government introduced Bill 18 Stronger Workplaces for a Stronger Economy Act, 2014. The legislation, if passed will impact several areas within the various labor and employment laws.
Some of the proposed changes include:
§  The elimination of the $10,000 cap on the recovery of unpaid wages by employees through the Ministry of Labour claim process under the Employment Standards Act, 2000.
§  Increasing the limitation period to two years for employees to recover unpaid wages through the Ministry of Labour claim process under the Employment Standards Act, 2000. The current limitation period is six months or one year depending on the type of claim.
§  Requiring employers to provide each of their employees with a copy of the most recent poster (including translations) published by the Ministry of Labour that provides information about the Employment Standards Act, 2000.
§  Making temporary help agencies and their clients jointly and severally liable for unpaid regular wages and unpaid overtime pay.
§  Requiring the Workplace Safety and Insurance Board to assign workplace injury and accident costs to temporary help agency clients when an employee is injured while performing work for the agency’s client.
§  Expanding employment protections for foreign nationals who are in Ontario under an immigration or foreign temporary employee program. The protections include a prohibition on charging a recruiter fee or taking possession of the foreign national’s property, such as their passport or work permit.
§  Tying future minimum wage increases to the Consumer Price Index. The new minimum wage will be announced by April 1 of each year and will come into effect on October 1 of that same year.
Access Bill 18 Stronger Workplaces for a Stronger Economy Act, 2014 for additional details.
The CPA will continue to monitor the progress of these new legislative measures and advise employers accordingly.
With Ontario’s budget having received Royal Assent on July 24, 2014, certain amendments to the Pension Benefits Act (PBA), known as the Carrigan amendments, have become law.
Changes to Section 48 of the Pension Benefits Act modified within Bill 14, Building Opportunity and Securing Our Future Act (Budget Measures), 2014 clarify that in circumstances where a pension plan member is legally married to a spouse from whom they are separated, is living with a new spouse in a common law conjugal relationship, and dies prior to retirement, the common law spouse will be entitled to the pre-retirement death benefit.
Minimum wage update
The following table includes the minimum wages currently in effect in all jurisdictions as well as any rate changes announced at the time of writing.
JurisdictionRate/hourEffective dateFederal
(Canada Labour Code, Part III)
Aligned with provincial/territorial minimum wage in each jurisdictionDecember 1996Alberta§  General$9.95
September 1, 2013
September 1, 2014
§  Liquor server$9.05
September 1, 2011
September 1, 2014
British Columbia§  General§  Liquor servers$10.25
 May 1, 2012
May 1, 2012
October 1, 2013
October 1, 2014
New Brunswick*$10.00April 1, 2012Newfoundland and Labrador$10.00
July 1, 2010
October 1, 2014
Northwest Territories$10.00April 1, 2011Nova Scotia§  Experienced workers§  Inexperienced workers$10.40
 April 1, 2014
April 1, 2014
Nunavut$11.00January 1, 2011Ontario§  General §  Students under 18 working 28 hours/week or less§  Serving alcohol on licensed property  $11.00
 June 1, 2014
June 1, 2014
June 1, 2014
Prince Edward Island$10.20
June 1, 2014
October 1, 2014
Quebec§  General§  Employees receiving tips$10.35
 May 1, 2014
May 1, 2014
December 1, 2012
October 1, 2014
Yukon $10.72April 1, 2014
An inexperienced employee is an employee who has not been employed by their current employer or other employers to do their current job for three calendar months.
Will increase each year based on the Consumer Price Index (CPI).
*There are special minimum wage rates for certain categories of employees in government construction work, and counsellors and program staff at residential summer camps.
The Canadian Payroll Association (CPA) is implementing a one-year Payroll Experience (PE) requirement, effective January 1, 2015, for all Payroll Compliance Practitioner (PCP) candidates. This requirement will enhance the quality of PCP graduates and demonstrate to employers that a PCP certification holder has both the education and experience competencies required to keep organizations compliant.

Read more
As a payroll professional, keeping up with federal and provincial requirements is key. The following article by HRinfodesk concerns a case in Ontario. The conclusions from this case involve the legal implications of not including termination compensation provisions in employment contracts. This may have implications for employment contracts in other provinces.
Limiting termination compensation
By Adam Gorley, Editor, HRinfodesk, published by First Reference, August 2014

In recent termination cases, Ontario's courts have often inferred missing termination notice or severance pay provisions into employment contracts, usually to employers' benefit. But in Paquette v. Quadraspec Inc., 2014 ONCS 2431 (available in French only), the Superior Court has released a decision that suggests a stricter approach. Justice Paul Kane found that where an employer has drafted an employment contract that doesn't comply with the Employment Standards Act (ESA)—either by omission or error—it is inappropriate to assume that the employer intended otherwise.
Facts of the case and decision
The employee, Alain Paquette, had worked for Quadraspec Inc. or its predecessors since 1983. In 1998, the employer made Paquette director general of the company's Oakville operations, under a new contract that was in effect until 2011, when he was terminated without cause or notice. Quadraspec paid Paquette six months of salary in lieu of notice, plus unpaid bonus amounts, in accordance with the contract. The contract expressly limited claims for other unpaid compensation such as benefits or severance to the notice period. Paquette complained that the termination clause of the employment contract was not valid since it prevented him from making claims for these unpaid amounts, contrary to the ESA.
It is well-established that an employer may not contract out of the minimum standards set in the Act, and by attempting to do so, that employer will nullify any offending contractual clause. On termination notice, the ESA states:
Requirements during notice period (section 60.1)
During a notice period, the employer:
(a) Shall not reduce the employee's wage rate or alter any other term or condition of employment;
(b) Shall in each week pay the employee the wages the employee is entitled to receive, which in no case shall be less than his or her regular wages for a regular work week; and
(c) Shall continue to make whatever benefit plan contributions would be required to be made in order to maintain the employee's benefits under the plan until the end of the notice period.
Pay instead of notice (section 61.1)
An employer may terminate the employment of an employee without notice or with less notice than is required if the employer:
(a) Pays to the employee termination pay in a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section; and
(b) Continues to make whatever benefit plan contributions would be required to be made in order to maintain the benefits to which the employee would have been entitled had he or she continued to be employed during the period of notice that he or she would otherwise have been entitled to receive.
Quadraspec admitted that the clause excluded benefits to which Paquette was entitled, but argued that it understood it had an obligation to pay these benefits to Paquette regardless of the wording of the contract.
However, Justice Kane found that when drafting the contract, the employer intentionally chose a wording that violated the ESA, despite simple valid alternatives. Quadraspec clearly put substantial effort into the drafting of the detailed 15-page employment contract, and as a result, it didn't make sense for the court to infer terms into the ambiguous termination notice clause.
The court further noted that the offending clause looked like an attempt to avoid or limit the employer's obligation to maintain Paquette's benefits during the notice period, placing the onus (and expense) on the employee to challenge the ambiguous provision in court. Justice Kane stated, “Courts shouldn't be assisting employers with such a purpose.” As a result, the court found the termination clause was null and void.
Justice Kane made another important decision in the case. The ESA states that an employer must pay severance to employees of five years or more if its total payroll is greater than $2.5 million. Quadraspec argued that this clause applies only to payroll in Ontario. Since Quadraspec's main operations are in Quebec, and its Ontario payroll was not above the threshold, this interpretation would have meant the employer didn't have to pay severance to Paquette. The court disagreed. It is clear from the reading of the Employment Standards Act and various other relevant statutes that Ontario's legislature did not intend to limit the severance clause to employers' payroll in Ontario. There is simply no evidence that this was the intention.
The Act states:
Payroll (section 64.2)
An employer shall be considered to have a payroll of $2.5 million or more if:
(a) The total wages earned by all of the employer's employees in the four weeks that ended with the last day of the last pay period completed prior to the severance of an employee's employment, when multiplied by 13, was $2.5 million or more; or
(b) The total wages earned by all of the employer's employees in the last or second-last fiscal year of the employer prior to the severance of an employee's employment was $2.5 million or more.
Since Quadraspec's total payroll was more than $2.5 million, and Paquette had worked for the company for more than five years, the court found the employer did owe the employee severance.
This case serves as another clear reminder that it is crucial to draft compliant employment contracts.
Any questions or comments, please communicate with Yosie Saint-Cyr, Managing Editor, at
This article is published on HRinfodesk---an online publication and database of payroll and employment law news, compliance and case commentaries for every jurisdiction in Canada, published by First Reference.
These articles are made available to give you general information and understanding of the law, not to provide legal advice about specific situations or problems. These articles also offer general comments on legal developments of concern to businesses. There is no lawyer-client relationship between you and the author or publisher. Every effort has been made to ensure the accuracy and timeliness of this information. These publications should NOT be relied upon as legal advice or opinions. The reader should always obtain legal advice from a qualified lawyer or other qualified professional, which will be responsive to the case or circumstance of the individual.
Please note that the content provided in this article or any content contained in or made available through any third party website linked to from this article and/or HRinfodesk, is provided “as is” without representations or warranties of any kind. All representations and warranties in respect of content or third party content, express or implied, including, without limitation any representations to warranties or conditions regarding accuracy, timeliness, completeness, non-infringement, merchantability or fitness for any particular purpose are hereby disclaimed.

Tax cheats beware: zapper use will not be tolerated

Tax cheats beware: zapper use will not be tolerated
Tax cheats beware: zapper use will not be tolerated
Minister Findlay meets with local businesses to discuss new civil and criminal sanctions for possession or use of electronic suppression of sales software
August 13, 2014 - Saskatoon – Canada Revenue Agency
The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, joined by Minister Lynne Yelich, Member of Parliament for Blackstrap, and Kelly Block, Member of Parliament for Saskatoon-Rosetown-Biggar, today took part in a roundtable discussion with business owners to discuss new sanctions introduced earlier this year to combat the use of electronic suppression of sales (ESS) software and its contribution to the underground economy.
  • Economic Action Plan (EAP) 2013 proposed new administrative monetary penalties and criminal offences under both the Excise Tax Act and Income Tax Act targeting those participating in the use, possession, sale or development of ESS software. Those EAP measures took effect on January 1, 2014.
  • Earlier this year, the Canada Revenue Agency (CRA) began an awareness campaign to ensure that businesses were aware of the new sanctions. The awareness activities will conclude this summer.
  • As of September 1, 2014, the CRA will begin to impose these new civil penalties and criminal sanctions for participating in the use, possession, sale or development of ESS software.
Quick facts
  • ESS software (commonly known as “zapper” software) selectively deletes or modifies sales transactions in point-of-sale systems, electronic cash registers and business accounting systems, leaving no record of the original transaction behind. The software allows businesses to underreport their revenue and avoid paying taxes.
  • Under the new measures, businesses that use, possess, or acquire ESS software will face a fine of $5,000 for the first infraction and $50,000 on any subsequent infraction. Anyone who participates in manufacturing, developing, selling, possessing for sale, offering for sale or otherwise making available ESS software will face a fine of $10,000 for the first infraction, and $100,000 on any subsequent infraction. They may also face criminal charges of up to $1 million in fines, up to a five year jail term, or both.
“Our Government is serious about cracking down on tax cheats—including those who manufacture or use electronic suppression of sales software. We now have the tools to penalize these tax cheats with stronger civil and criminal consequences, including fines and even jail time. Participation in the underground economy hurts all Canadians.”
“The severity of these sanctions speaks to how serious a crime this is. We are committed to rooting out tax cheats and making sure they are punished accordingly. In keeping with our commitment to reducing red tape, we have enacted these measures without creating additional reporting requirements for compliant businesses.”

Canada Revenue Agency/Ontario Government Implement Personal Tax

wwwwCanada Revenue Agency/Ontario Government Implement Personal Tax
Canada Revenue Agency/Ontario Government Implement Personal Tax
Increases Retroactive to January 1, 2014 for Employees Earning over
Key Points
Increased taxes for employees earning more than $150,000 to be implemented through
higher payroll tax deductions from September to December and/or on 2014 tax returns
CRA publishes revised Ontario tax tables to implement retroactive Ontario tax increases
for employees earning over $150,000
CRA agrees to no penalty approach for employers
Discussion points for payroll staff and management: Who will be impacted and how?
Next Steps for Payroll Staff
Most employees earning over $150,000 will have a 3% or 6% increase in their Ontario taxes on
regular pay from September to December, 2014.
Increased taxes for employees earning more than $150,000 to be implemented through higher
payroll tax deductions from September to December and/or on 2014 personal tax returns
On May 1, 2014 the Ontario government tabled a provincial budget that introduced higher personal
income tax rates for individuals earning over $150,000. These tax increases were to be retroactive to
January 1, 2014. This budget was defeated, triggering a provincial election. The current Liberal
government was elected with a majority on June 12, 2014 and re-introduced the budget which passed
July 24, 2014 with the same tax rate changes and retroactivity to January 1, 2014.
Current 2014 Ontario tax rates and
income thresholds
New 2014 Ontario tax rates and
income thresholds
Annual taxable income
From – To
tax rate (%)
Annual taxable income
From – To
tax rate (%)
0 to 40,120 5.05% 0 to 40,120 5.05%
40,120 to 80,242 9.15% 40,120 to 80,242 9.15%
80,242 to 514,090 11.16% 80,242 to 150,000 11.16%
514,090 and over 13.16% 150,000 to 220,000 12.16%
220,000 and over 13.16%
Prior to the Ontario Government’s July budget, the Canadian Payroll Association (CPA) had been
discussing various implementation scenarios for these proposed income tax rate and threshold
changes with the Canada Revenue Agency (CRA) and the Ontario Ministry of Finance.
Legislative Briefing: Ontario Personal Tax Changes
The purpose of our discussions was to advise government officials on the efficiency and compliance
implications for employers and payroll systems providers of mid-year changes and the complications
with retroactive adjustments in particular. While January 1 and July 1 income tax table updates are
expected and planned for, income tax changes at other dates require additional resources and
processes. Most government budgets are tabled in the spring, and the CRA and provinces have a tax
collection protocol that results in these changes being made using a July 1 tax table release. The
CPA has advocated strongly that these dates be honoured to provide employers, payroll service and
software providers, as well as governments, sufficient time to program payroll systems, then test and
implement changes to support compliance and efficiency. Because the Ontario budget was reintroduced
and passed on July 24, 2014, a July 1 income tax table change and resulting processes
are no longer possible.
The CPA made a number of suggestions to the CRA and the Ontario Ministry of Finance on how
employers could implement and comply with these unusual changes in an efficient and effective
manner while being fair to affected employees and protecting employers from compliance problems
and penalties. Suggestions included waiting to implement the tax rate changes until January 2015 or
enabling those affected to pay the retroactive amounts when filing their 2014 T1 personal tax return.
The Ontario government stood to forego $635 million in tax revenue by delaying the tax increases until
2015, and advised of the need to proceed with implementing the personal tax increases retroactive to
January 1, 2014. As a result, the CRA needed to determine how best to administer the rate increases
within the context of the Federal/Provincial Tax Collection Agreement that has been in place for
decades. The CRA has decided that it must apply the new tax rate by implementing a higher tax rate
in payroll deductions from September 1 to December 2014 to capture the amount of tax due from
January 1, 2014.
The majority of payroll service providers and software companies have a contractual obligation to use
the most current tax tables for their clients (employers) payroll processes.
Impact on Net Pay
CRA publishes revised tax tables to implement retroactive Ontario tax increases
The personal tax rate increases in the Ontario budget is 1% for earnings of $150,000 to $220,000
and 2% for $220,000 to $514,090. Because the tax increases are effective January 2014 but
implemented for only the last 4 months of 2014, the new CRA tax tables will result in these
employees having a 3% or 6% increase in their Ontario tax deduction on regular pay from
September to December, 2014. For employees who will reach this salary range between
September and December, the tax increase will not be retroactive.
The CPA is advising members and stakeholders that within this context, the CRA has agreed to some
of the CPA’s implementation suggestions and has posted the following on its website under “What’s
new for payroll”.
Legislative Briefing: Ontario Personal Tax Changes
Message on “What’s new for payroll” webpage
Payroll tables
The Canada Revenue Agency (CRA) will publish a September 1, 2014 version of the Ontario payroll tables
to incorporate proposed increases to personal income tax rates tabled in the Ontario budget on July 14,
2014. As the proposed changes are retroactive to January 1, 2014, the revised tables will reflect the
necessary prorated tax rates to allow employers to withhold the correct additional amounts from
employees between September and the final pay of 2014. The changes to the tables apply to employees
who earn more than $150,000 in 2014.
The September 1, 2014, version of Guide T4127, Payroll Deductions Formulas for Computer Programs is
now available on the CRA website.
The updated payroll deductions online calculator and the electronic version of the T4008 Payroll
Deductions Supplementary Tables and T4032 Payroll Deductions Tables for Ontario will be available on
our website by mid-August.
The paper and CD version of the T4032 will be available by the end of August.
Message on “T4127, Payroll Deductions Formulas for Computer Programs” webpage
Notice to the reader
The September 1, 2014, version of Guide T4127, Payroll Deductions Formulas for Computer Programs,
contains adjustments for proposed increases to personal income tax rates tabled in the Ontario budget on
July 14, 2014. The proposed changes are retroactive to January 1, 2014, and the revised tables reflect
prorated tax rates to allow employers to withhold the correct additional amounts from affected employees
between September and the final pay of 2014. The changes to the tables apply to employees who earn
more than $150,000 in 2014.
The CRA normally requires employers to withhold and remit income taxes in line with current rates, but
because of the complexities and timing of the Ontario budget measures it is recognized that these income
tax changes will be implemented on a best-effort basis where practical, in full appreciation of the different
payroll systems and administrative capacities of employers. Employers will not face penalties for failing to
withhold as a result of the Ontario budget measures introduced on July 14, 2014.
Employees whose employers are unable to change their payroll systems or processes on time can ask
their employers to increase withholdings from September to December 2014. This could reduce the
amount the employees owe when they file their 2014 income tax and benefit return.
Employers are encouraged to discuss these changes with affected employees.
Legislative Briefing: Ontario Personal Tax Changes
Implications/Points for Discussion between Payroll Staff and Management
Who will be impacted and how? Is the system change possible for September? What are the
next steps for payroll deductions?
The CPA’s advocacy goal is to increase the efficiency and effectiveness of payroll related legislation
and administration for all stakeholders - it does not advocate for higher or lower taxes. The majority of
payroll service and software providers have advised the CPA they will make the programming
changes required by September 1, 2014 to enable employers and Ontario employees affected to
comply with the higher tax rate.
The new tax table’s catch-up rate will deduct, in payroll processing, most of the additional tax liability
(approximately $485 million collectively) for those affected. A reduction in net pay ─ due to these
higher taxes ─ will reduce the possibility of a tax liability when the employee files their personal tax
The CRA states, “Where employer payroll systems or processes are not changed, employees could
request employers to increase withholdings from September to December 2014 in an effort to reduce
an amount owing on filing of their 2014 tax return.” For these organizations, the CRA will enable
employees to request the additional taxes using Ontario TD1s effective from September to December
2014 and make any final payments owing on the T1 personal tax return.
This CRA/Ontario government approach will be efficient and effective for most stakeholders
(government, employers, payroll software companies, payroll service bureaus, outsourcing
organizations and employees) because:
 The personal tax rate changes only apply to fewer than 2% of Ontario employees but require
system-wide reprogramming for employers and the government.
 Payroll systems are based on the CRA’s T4127 guide that has one prescribed tax rate for each
specific income threshold, so there can be no variability among employees within each
 For employers/organizations with in-house or off-the-shelf systems, and/or other constraints,
they have the option to not change or use the revised tax rates, and continue with the existing
rates. High income earners should be encouraged to request additional income tax using an
Ontario TD1.
 Employers using manual tax tables or the CRA’s Payroll Deduction Online Calculator (PDOC)
will have access to the new versions by mid-August.
Employers should be ready for questions from Ontario employees earning over $150,000 as their pay
cheques for the months of September to December 2014 will be lower when payroll systems are
programmed with the new tax rates.
For your benefit as a member of the Canadian Payroll Association, we suggest you share this Ontario
tax rate briefing with senior management, and initiate a discussion about the impact on employees
earning over $150,000 to explain the situation and identify the implications for them as employees and
you as the person responsible for the organization’s payroll compliance with government regulations.
Legislative Briefing: Ontario Personal Tax Changes
Next Steps for Payroll Staff
Scenario 1: You have asked and received confirmation from your Payroll Service or Software
Provider (PSSP) or your Information Systems staff that your payroll system will be updated with the
revised Ontario income tax tables effective September 1, 2014.
Step 1: Notify senior management of the implication for Ontario employees who earn over $150,000 of
the increases to their personal income tax rates by providing a copy of this CPA briefing.
Step 2: Suggest to senior management that the organization provide a copy of this CPA briefing to all
Ontario employees earning over $150,000. A French copy of this briefing is available.
Step 3: Remind affected employees that the payroll system will only calculate additional taxes for their
employment income and that the Ontario personal tax increases also apply to other sources of income
such as investment and rental income. Offer those employees the opportunity to request additional taxes
from September to December 2014 using an Ontario TD1 (TD1ON) to reduce a potential tax liability on
their taxable income when they file their T1 personal income tax return. (Suggest a discussion with a
financial advisor or tax expert.)
Step 4: Process any requests for additional income tax and set a reminder to cease additional taxes for
the first pay period of 2015 (or set the amount back to the amount that the employee had prior to this
transitional increase).
Scenario 2: You have asked and received confirmation from your Payroll Service or Software
Provider (PSSP) or your Information Systems staff that your payroll system will NOT be updated with
the Ontario income tax tables effective September 1, 2014.
Step 1: Notify senior management of the impact on Ontario employees who earn over $150,000 of the
increases to their personal income tax rates by providing a copy of this CPA briefing.
Step 2: Suggest to senior management that the organization provide a copy of this CPA briefing to all
Ontario employees earning over $150,000. A French copy of this briefing is available.
Step 3: Advise affected employees that they will likely have a tax liability when they file their T1 personal
income tax return. Offer to calculate the additional taxes that would have been deducted each pay period
by using the September versions of either the CRA’s Payroll Deductions Online Calculator (PDOC) or the
T4032 Payroll Deductions Tables for Ontario based on your employee’s payroll frequency (monthly, semimonthly,
bi-weekly, weekly). Both of these CRA publications will be updated with the new Ontario rates
by mid-August.
Step 4: Offer affected employees an Ontario TD1 (TD1ON) to request additional income taxes from
September to December 2014 to reduce a potential tax liability on their taxable income when they file
their T1 personal income tax return. (Suggest a discussion with a financial advisor or tax expert to
discuss the additional impact of other sources of income such as investment and rental income.)
Step 5 (Optional): Ask employees who reject the offer of deducting additional taxes to complete a written
acknowledgement form that you notified them of the tax increases and that they did not authorize
additional taxes be deducted. (You may use the acknowledgement form provided at the back of this CPA
Step 6: Process any requests for additional income tax and set a reminder to cease additional taxes for
the first pay period of 2015 (or set the amount back to the amount that the employee had prior to this
transitional increase).
Legislative Briefing: Ontario Personal Tax Changes
The Canadian Payroll Association is fundamentally opposed to retroactive adjustments to payroll
requirements because these cause administrative, compliance and financial burdens on employers,
employees and government, and result in costs, confusion and frustration for everyone.
However, the CPA respects the decisions of the Ontario government and the CRA to enable
employers and employees to most efficiently and effectively comply with the tax changes by:
 revising the tax tables for payroll remittances so that the majority of the tax increase for those
affected will be implemented using the existing process, while
 being flexible and enabling employers to assess the implications on their systems and
implement the changes on a best efforts basis with no penalties for employers who do not
make the payroll system changes in the short time period now available.
Legislative Briefing: Ontario Personal Tax Changes
Appendix 1
Employee Acknowledgement Form
I, ___________________________, acknowledge receipt from my employer that the
(print name)
payroll system has not been updated with the Ontario personal income tax increases and that
I will be responsible for any personal income tax liability on my taxable income when I file my
personal income tax return.
____________________________ __________________________
(signature) (date)
Legislative Briefing: Ontario Personal Tax Changes
Appendix 2
Previous Experience
The CPA’s previous advocacy experience on a similar situation
This is not the first time that the CPA has advocated on behalf of employers with the CRA and a
provincial government when the latter legislated income tax changes after July 1. In 2001, the Ontario
government lowered income tax rates effective October 1 of that year. The CRA and Ontario Ministry
of Finance asked for the CPA’s input on how to implement the changes in an efficient manner. At the
time, the CPA got involved and pointed out that:
 The tax rate changes were relatively small.
 Employees would benefit from the decrease when filing their personal tax returns if their
employers’ payroll system had not changed.
 It would cost millions of dollars for employers to implement system changes for three months.
It was therefore agreed that the adjustment to payroll system changes would be made on a best
efforts basis. Most of the payroll service and software providers made the changes, while many
smaller employers or those with in-house systems did not make the changes but advised their
employees that they would receive the benefit when they filed their T1 (personal return).
The key differences between the previous Ontario tax adjustment in 2001 and the current situation
 This is a tax increase on employees earnings more than $150,000, which represents fewer
than 2% of all employees, while in 2001 it was a small tax decrease for everyone i.e., across
all employment income thresholds.
 This adjustment is for a full year with 8 months’ retroactive and 4 months going forward
compared to a reduction for 3 months for the remainder of the year in 2001.
 The Ontario government just won an election on June 12 with a budget that included this
personal tax increase on income earners over $150,000 and which has been known since
 The province of Ontario has a big deficit and is being encouraged by most stakeholders to
reduce it.
Financial planners, accountants and media stories have already advised the higher income earners
affected to seek advice from professional finance and tax planners to determine if, and how, to deal
with any personal tax liabilities.

Defined Contribution Pension Options at retirement

Defined Contribution Pension Options at retirement
Defined Contribution Pension Options at retirement
Written by Jim Yih
Last week, I look at pension options when you retire with a Defined Benefit Pension Plan.  When you retire from a Defined Contribution Pension Plan, your retirement options are very different than the options from a Defined Benefit Pension Plan.  The pension options you have will depend on a few different things but the biggest issues are the amount of money you have in the pension and your age.
Depends on your age
When you retire, quit or terminate, your employer will notify the pension plan and let them know you are no longer employed.  At that point, the pension plan will send you an options package outlining your options. In most provinces and jurisdictions the earliest pension age is age 55.
If you terminate before the age of 55, you will have the option to transfer funds to a LIRA but you may not have option to create retirement income. (Note:  In some provinces, the age requirements are different.  For example, the minimum age for retirement is age 50 in Alberta). Because of pension legislation, you will have to move your Defined Contribution Pension to a Locked in Retirement Account commonly known as a LIRA.
If you terminate after age 55, you will have a different set of options because you will have income options including the LIF or Life annuity
Depends on how much money you have
The other key determinate of your pension options is the amount of money you have in your pension plan.  If you have less that 20% of the YMPE, you will have the option to cash out the pension in full or transfer the balance to a RRSP.
Related article:  Online guide to RRSPs
In 2014, the YMPE is $52,500.  If you have more than $10,500 (20% of $52,500) in your pension at retirement, then you won’t have the option to cash out funds or transfer to a RRSP.  If your pension is more than the 20% of YMPE, the primary issue affecting your pension options will be your age (as discussed earlier). For example, if you have not reached the minimum pension age (55 in most provinces and territories), then you will have the option to transfer to the Pension to a LIRA.  If you are over 55, you will have more options.  You can choose to transfer the pension funds  to a LIRA, LIF (Life Income Fund) or Life Annuity.
Remember, pension legislation varies from province to province.
Unlocking Pension Money
When you move money from a pension to a LIRA, there is no unlocking privileges except for hardship issues or small balances.
The minute you want income from your defined contribution pension, you will need to utilize a LIF or Life annuity.  When this happens, you have a one time opportunity to ‘unlock’ 50% of your pension assets and move them to a RRSP.
Related article:  Unlocking pension Money
Here’s a few simple examples:
·         Jacques is 52 working and living in Ontario and has $288,000 in his DC pension.  If we were to retire, he has to move the $288,000 into a LIRA at any financial institution or purchase a Deferred Annuity. He does not have the option to move the money to a Life Income Fund or an immediate Life Annuity because he has not reached the age of 55
·         Suzanne is 42 and has $10,000 in her DC pension.  If she leaves her employer, she has the option to move the $10,000 into an RRSP of her choice to she can take the amount in cash but it will be taxable.
·         Thomas works in Alberta.  He is 62 and retiring.  He has $316,000 in his DC pension.  Thomas can move the pension into a LIRA of his choice and opt not to take income.  If he wants income, he would move $158,000 (50% of the $316,000) into a LIF or a Life Annuity.  The other 50% would go into a RRSP, RRIF or Life Annuity.

Three keys to Developing Financial Accountability
Three keys to Developing Financial Accountability
Three keys to Developing Financial Accountability
Written by Sarah Milton
“Surround yourself with those who are on the same mission as you.” – Unknown
I believe that accountability is a critical factor in successful goal setting and that this is especially true when it comes to financial goals. A couple of months ago, I was asked to write a testimonial for a man who has helped me a great deal over the past 18 months with my personal goals and it forced me to think about what specifically it is about him and his approach that has had such a strong impact on my success. What I realized is that it wasn’t so much his natural coaching ability or his compassion that made him successful as a coach, it was the fact that he led by example and he never let me off the hook when it came to doing what needed to be done in order to reach my goals. He wouldn’t let me set the bar lower than it needed to be and he held me accountable for taking the steps necessary to reach my goals. Knowing that failure (and laziness) was not an option forced me to step up even when I was fearful or unmotivated.
Surround yourself with the right people
When it comes to managing money and building wealth, being held accountable dramatically increases our chances of success. I’ve written before about the theory that we are the sum of the people we spend the most time with.
If you spend most of your time with people who will allow you to make excuses when you get off track and who will lead you into temptation with their own spending habits it makes sense that it’s going to be much harder to achieve your goals. Conversely, if you’re surrounded by people who are committed to achieving their own goals and who won’t hesitate to let you know what they think when you don’t do what you need to in order to succeed you are more likely to be successful.
As I was writing my testimonial it occurred to me that a good accountability partner has three main characteristics:
They Don’t Let You Off the Hook
As I thought about my mentor and then back to high school and university I realized that the teachers who had impacted me the most (in a positive way!), and in whose classes I had made the most progress, all shared common traits. Each one of them was strict but fair and each one of them was known for not being willing to extend deadlines on homework or essays under any circumstances. Many students disliked them because they were so strict but I found that I thrived in their classes because I was too afraid of the consequences to risk not doing what I was required to in order to do well! An accountability partner needs to be strong enough to call you out when you’re doing less than you’re capable of and they need to be able to do it in a way that’s not confrontational or demoralizing. Putting someone down by pointing out their flaws and non-successes is not the same as holding them accountable to a standard that they’ve set for themselves. An accountability partner is someone who gives you feedback in order to build you up, not tear you down.
They Walk the Walk
If you’re relying on someone to hold you accountable for your goals then it’s important that you can see and respect the effort that they dedicate to achieving their own. Our goal group meetings are focused on the progress and challenges of the individual members and the leader’s role is to facilitate the discussion and solicit feedback rather than share his own goals. However, just knowing that he is working on his own goals and seeing his progress inspires us to dig deeper and keep working on ours. An accountability partner functions like a pacesetter, they set a standard that encourages you to push a little harder in order to keep up and their progress motivates you to keep moving towards your goal. This is especially important when it comes to financial goals because in trying to eliminate debt, manage your money more effectively and build wealth you’re aspiring to achieve goals that are in direct opposition to the materialistic, debt-laden norm of our consumer driven society. Working to achieve your goal alongside someone who is on the same path makes it a lot easier to stay motivated when it feels as though you’re paddling upstream..
They Celebrate Successes
An accountability partner should be genuinely happy for you when you reach a goal and not threatened at all by your success. They should also remind you to celebrate every step of the way. Sometimes we get so caught up in focusing on how far we still have to go to reach our goal that we need reminding of how far we’ve already come. Celebrating success with an accountability partner is powerful because their unique understanding of your journey gives them a totally different appreciation of how significant each step really is.
As human beings we have an innate need to be seen; to be recognized and validated for our progress and accomplishments. When you’re working to achieve a goal, you tend to be driven by something that is personal to you and that motivator is not always understood or supported by those around you. Having an accountability partner is more than just having someone on your side who understands your journey. It’s about having someone in your corner who believes in and supports your reason for starting that journey in the first place, who will remind you of it when you get off track and who will hold you accountable for finishing what you set out to achieve.

Schedule 88 Internet Business Activities - New requirement for 2013 tax returns

Schedule 88 Internet Business Activities - New requirement for 2013 tax
Schedule 88 Internet Business Activities - New requirement for 2013 tax returns
Schedule 88 must be filed by a corporation which earns income from one or more web pages or websites.  The schedule must also be filed if the corporation doesn't have a website but has created a profile or other page describing its business on blogs, auction, market place or any other portal or directory websites from which it earns income.The information above is from Schedule 88 on the Canada Revenue Agency (CRA) website, and seems to describe most corporations.  If a corporation doesn't have its own website, but has a web page on someone else's website from which it earns income, this form is required. Includes income from:goods and/or services sold via a web pageorders received via a form on a web pageemails received to make a purchase, order, booking, etc.advertising, income programs, or traffic your site generates - for instance this would include income from Google Adsense, Microsoft adCentre, or other affiliate programs.If the website or web page does not directly generate income, then it would not be reported on Schedule 88.  The type of website or web page that would fall into this category includes:telephone directory websites that list your website or web pageinformation-only websites or web pages, which give basic contact information for the business, and general information about the type of goods or services provided by the business.Many businesses will have an internet presence, but will not know how much of their income can be attributed to their website.  In such cases, a best estimate will suffice.This form is not yet included in many T2 tax software packages, but may be available soon.  If you are required to file Schedule 88 and are using software which doesn't yet include it, download it from the CRA website (link above).  CRA information indicates that if your 2013 tax return was filed before April 4, 2014, then you are not required to file Schedule 88 this year, but it should be filed with your 2014 return.The form asks how many internet web pages or websites your corporation earns income from.  If the corporation has 2 websites with 100 pages each, the response would be 2.  If the corporation doesn't have it's own website, but has 1 web page on a website owned by someone else, the response would be 1. The url address of the web page or website must be provided.  Up to 5 urls can be entered.  If the corporation has more than 5 websites, the addresses of those that earn the most income should be provided.CRA Resources:Internet Business Activities - updated to provide more information May 21, 2014Schedule 88 Internet Business ActivitiesTax Tip:  Unless a person has been trained in preparing corporate tax returns and is up to date on current tax laws, the return should be prepared, or at least reviewed, by a professional accountant.

Changing your tax return once you have already filed itIncome Tax Act S. 142(4.2)

Changing your tax return once you have already filed itIncome Tax Act S. 142(4.2)
Changing your tax return once you have already filed itIncome Tax Act S. 142(4.2)

If you have filed your return and then determine that you need to make a change, either because you have received another T-slip, or because you didn't claim an expense and later learned it was deductible, you can request an adjustment to your tax return.If you've just discovered that pension splitting with your spouse would save you some tax, this is also a good reason to adjust your prior return.  However, make sure that combined taxes payable are reduced by doing this, and keep in mind that the taxes payable of one spouse will probably increase, resulting in interest on the tax amount payable.The time limit for filing adjustments to your tax returns by mail is ten (10) years.  An adjustment request may be made in 2013 for the 2003 or subsequent taxation years.You can request the changeonline for your most recent return, or your returns for the previous two tax years, orby mail, for tax returns for the past ten years.Requesting a change onlineRequesting a change online is very simple, and is done by logging into your account at the CRA My Account page.  A separate request has to be filed for each tax year.You can also use the online request if you forgot to apply for the GST/HST tax credit when you filed your tax return.Requesting a change by mailYou can obtain a form T1Adj from the CRA web site, complete it and mail it in, along with documents supporting your change request.See also the CRA web page How to change your return.