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A checklist of items for review and what to bring in when its time to do your taxes.


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For most Canadians, tax planning for a year that hasn’t even started yet may seem too remote to even be considered. However, most Canadians will start paying their taxes for 2023 with the first paycheque they receive in January of 2023, less than two months from now. And, of course, with inflation running at over 7% and interest rates having nearly doubled in the last eight months, managing cash flow and maximizing take-home (after tax) income is a priority for everyone right now.


Over the past three years, the structure of work-from-home arrangements for employees has been a constantly changing landscape. In 2020, almost all employees who could work from home were required to do so, as most workplaces were closed under pandemic public health lockdown rules. As the pandemic eased (slightly) in 2021, employees began, in some cases, to return to the workplace on a part-time or full-time basis. That trend has continued in 2022, although in most cases employees are now working from home by agreement with their employer, rather than because of the requirements of a public health mandate.


The majority of Canadians who are not members of an employer-sponsored defined benefit registered pension plan save for retirement through a registered retirement savings plan (RRSP). For those Canadians who have accumulated retirement savings in an RRSP, the year in which they turn 71 is decision time. By the end of that year, all RRSPs must be closed, and the RRSP holder must decide whether to transfer his or her accrued savings into a registered retirement income fund (RRIF), or purchase an annuity, or both. (It’s also possible to collapse the RRSP and include all RRSP amounts in income for that year, but such a course of action is rarely advisable from a tax perspective).


While the current state of the Canadian health care system is not without its problems, Canadians are nonetheless fortunate to have a publicly-funded health care system, in which most major medical expenses are covered by provincial health care plans. Notwithstanding, there is a large (and growing) number of medical and para-medical costs – including dental care, prescription drugs, physiotherapy, ambulance trips, and many others - which must be paid for on an out-of-pocket basis by the individual. In some cases, such costs are covered by private insurance, usually provided by an employer, but not everyone benefits from private health care coverage. Self-employed individuals, those working on contract, or those whose income comes from several part-time jobs do not usually have access to such private insurance coverage. Fortunately for those individuals, our tax system acts to help cushion the blow by providing a medical expense tax credit to help offset out-of-pocket medical and para-medical costs which must be incurred.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


The fact that Canada is in the middle of a housing crisis isn’t really news to anyone. Whether it’s having difficulty finding an affordable apartment or putting together enough money for a down payment, or coping with ever increasing mortgage interest rates and mortgage payments, housing availability and affordability is a concern for Canadians across all age groups.


The Canadian tax system is a “self-assessing system” which relies heavily on the voluntary co-operation of taxpayers. Canadians are expected (in fact, in most cases, required) to complete and file a tax return each spring, reporting income from all sources, calculating the amount of tax owed, and remitting that amount to the federal government by a specified deadline. And, although the rate of compliance among Canadian taxpayers is very high – more than 30 million individual income tax returns for the 2021 tax year were filed with the Canada Revenue Agency between early February and mid-September of 2022 – there are, inevitably, those who do not either file or pay on time.


Most Canadians know that the deadline for making contributions to one’s registered retirement savings plan (RRSP) comes 60 days after the end of the calendar year, around the end of February. There are, however, some circumstances in which an RRSP contribution must (or should) be made by December 31, in order to achieve the desired tax result.


Since early 2022, the finances of Canadian households have been hit with what Statistics Canada has called a “trifecta of market challenges”, which increasingly stretched and squeezed the efforts of Canadians to maintain their financial stability during the second quarter (April 1 to June 30) of this year.


One of the most valuable tax and investment strategies available to Canadians is home ownership. While the real estate market can (and does) go and up down, home ownership has proven to be, over the long term, a reliable way of building net worth.


Transitioning into retirement is a complex process, one which involves decisions around finances (present and future) as well as one’s way of life. While it was once typical for an individual to work full time until retiring (usually at age 65), the word “retirement” no longer has a single meaning – in fact, it’s now the case that almost every individual’s retirement plans look at little different than anyone else’s. Some will take a traditional retirement of moving from a full-time job into not working at all, while others may stay working full-time past the traditional retirement age of 65. Still others will leave full-time employment, but continue to work part-time, either out of financial need or simply from a desire to stay active and engaged in the work force.


This year, for the first time since 2019, most (if not all) post-secondary students will be preparing to go to (or return to) university or college for in-person learning. While that’s an exciting prospect after two years of pandemic restrictions, starting or returning to post-secondary education is also an expensive undertaking.  There will be tuition bills, of course, but also the need to find housing and pay rent in what is, in most college or university locations, a very tight and expensive rental market. Those who choose to live in residence and are able to secure a place will also face bills for accommodation and, usually, a meal plan.


In this year’s budget, the federal government announced a number of measures to help Canadians who are trying to put together a down payment for the purchase of a first home. The most significant of those measures was the Tax-Free First Home Savings Account (FHSA) which, as the name implies, allows first time home buyers to save on a tax-assisted basis (within prescribed limits) toward such a purchase.


By the beginning of August almost every Canadian has filed his or her income tax return for the previous year and has received the Notice of Assessment issued by the Canada Revenue Agency (CRA) with respect to that filing. Most taxpayers, therefore, would consider that their annual filing and payment obligations for the year are now in the past.


Canadian businesses should be aware that, while many programs which provided payroll or expense supports for businesses during the pandemic ended on May 7, 2022, there is still a program in place to help employers with payroll costs. As well, even for programs which ended on May 7, applications can still be made for relief for claim periods prior to that date.


Since 2009, Canadians have been living (and borrowing) in an ultra-low-interest-rate environment. Between January 2009 and January 2022, the bank rate (from which commercial interest rates are determined) was (except for a brief period in 2018) never higher than 1.50% – and was almost always lower than that.  Effectively, adult Canadians who are now under the age of 35 have had no experience of managing their finances in high – or even, by historical standards, ordinary – interest rate environments.


By the time August 2022 arrives, virtually all individual Canadians have filed their income tax return for the 2021 tax year, have received a Notice of Assessment from the tax authorities with respect to that return, and have either received their refund or reluctantly paid any balance of tax owing.


As pandemic restrictions ease, the option of sending kids to summer camp is once again a realistic one and, for both kids and parents, the possibility of doing so must be particularly welcome this year.


When a public health emergency was declared in March of 2020, the focus for the federal government was getting pandemic benefits into the hands of eligible recipients as quickly as possible, to help mitigate the sudden financial crisis faced by so many Canadians. To that end, three decisions were made with respect to program administration. First, eligibility for benefits would be determined by “self-attestation” – in other words, applicants would certify, based on the information provided to them online, that they met the eligibility criteria for a particular benefit. Such self-attestations were accepted at face value, without documentation or other verification methods. Second, application for the same benefit – the Canada Emergency Response Benefit, or CERB – could be made to either the Canada Revenue Agency or Employment Insurance/Service Canada, depending on the circumstances of the applicant. Finally, in at least in the initial round of CERB payments (which were received by over 8 million Canadians), no income tax was withheld from payments issued, although the CERB itself was taxable income.


Many, if not most, taxpayers think of tax planning as a year-end exercise to be carried out in the last few weeks of the year, with a view to taking the steps needed to minimize the tax bill for the current year. And it’s true that almost all strategies needed to both minimize the tax hit for the year and to ensure that there won’t be big tax bill come next April must be taken by December 31(the making of registered retirement savings plan (RRSP) contributions being the notable exception). Notwithstanding, there’s a lot to recommend carrying out a mid-year review of one’s tax situation for the current year. Doing that review mid-year, instead of waiting until December, gives the taxpayer the chance to make sure that everything is on track, and especially to put into place any adjustments needed to help ensure that there are no tax surprises when filing one’s tax return for 2022 next spring. As well, while the deadline for implementing tax saving strategies may be December 31, the window of opportunity to make a significant difference to one’s current year tax situation does narrow as the calendar year progresses.


Of the 27 million individual income tax returns already filed with the Canada Revenue Agency for the 2021 tax year, no two were identical. Each return contained its own particular combination of types and amounts of income reported and deductions and credits claimed. There is, however, one thing which every one of those returns has in common. For each and every one, the CRA will review the return filed, determine whether it is in agreement with the information contained therein, and, finally, issue a Notice of Assessment (NOA) to the taxpayer summarizing the Agency’s conclusions with respect to the taxpayer’s tax situation for the 2021 tax year.


Canada’s retirement income system has three major components – private savings through registered retirement savings plans or registered pension plans, and two public retirement income plans – the Canada Pension Plan and the Old Age Security program. The last of those – the Old Age Security program – is the only aspect of Canada’s retirement income system which does not require a direct contribution from recipients of program benefits. Rather, the OAS program is funded through general tax revenues, and eligibility to receive OAS is based solely on Canadian residency. Anyone who is 65 years of age or older and has lived in Canada for at least 40 years after the age of 18 is eligible to receive the maximum benefit. For the second quarter of 2022 (April to June 2022), that maximum monthly benefit is $648.67.


It is a sad fact that, every year, thousands of Canadians become the victims of scams in which fraud artists claim to be representatives of the federal government. Equally sadly, in most cases the money lost is never recovered.