September 2016

I just started a business. Do I need to register for GST/HST?

Only businesses that exceed $30,000 in taxable revenue are required to register for GST/HST. However, if the new business is associated with another business (or businesses) and the total amount of taxable revenue exceeds $30,000 combined, then you must register the business for GST/HST. Once registered for GST/HST, you will need to charge your customers GST/HST and file a return based on your reporting period (typically annually but this can also be set up as quarterly or monthly).

All that said, you may want to register for GST/HST even if you have not exceeded the $30,000 threshold mentioned. This is because being a GST/HST registrant allows you to claim input tax credits for the GST/HST you pay on your purchases.

It is important to note that certain types of revenue are exempt from HST and do not require registration. For more information, please visit http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/xmptgds-eng.html or contact us.

I have to make some changes to my previous tax returns. Can I do that?

You can make changes to a return that has been assessed by the Canada Revenue Agency for a tax year ending in any of the ten previous calendar years. The processing time is usually two to eight weeks depending on the method of submitting the documents and the complexity of the changes. Once processed, you will receive a notice of reassessment with the requested changes made or a letter explaining why the changes were not made.

When the changes result in a significant amount of penalties and interest charges, the Voluntary Disclosure Program should be considered. This program will allow you to correct the tax mistakes made in previous years and have the penalties or interest charges waived if certain criteria are met. If you want to know more information about the “Voluntary Disclosure Program”, please contact your accountant.

One last thing to consider is that amending a previous tax return often results in an audit…

My child is starting university, what tax implications are there?

If your child is not already filing a tax return, your child may want to file a tax return when he/she starts university even if he/she has no income for the following reasons:

1. He/she will be able to claim the tuition tax credit and carry forward any unused tuition credits to help lower taxes on future income. He/she can also transfer up to $5,000 federally ($6,922 in Ontario for 2016) of this amount to a parent, spouse or common law partner or a grandparent who can claim this on his/her return; and
2. He/she can claim the Ontario Trillium Benefit for rent paid to a student residence or otherwise in Ontario and receive the refundable credit throughout the year.

If your child is receiving a scholarship, fellowship or bursary from the school this amount will normally be fully exempt from tax as long as the child can claim the tuition tax credit.

Note that starting January 1, 2017 the textbook and education tax credits will be eliminated, but the tuition tax credit will remain.

I’m having a hard time staying on top of my filing and payment requirements for the CRA. What can I do to get better organized?

If you use a calendar or reminder app, taking the time to set up the deadlines and requirements after receiving information from your accountant or from the CRA can help remind you to make payments and file returns on time. The CRA has also launched a Business Tax Reminder mobile app that lets businesses create custom reminders and alerts for these deadlines.

Your accountant should provide you with a list of the instalment requirements for the upcoming year when your personal or corporate tax return is completed. If you pay your instalments through online banking, you can set up recurring transactions that will withdraw the required amount out of your bank account on the appropriate dates.