Do you have unreported or under-reported income? New developments and old powers for the CRA may reveal unreported income.

Recent actions by the Canada Revenue Agency may give you reasons to start declaring unreported income. CRA has broad powers to require the production of documents and information including the right to compel the production of third party information under Section 231.1 of the ITA.

CRA recently received the rigth to assess Ebay power sellers.

CRA can ask construction suppliers for their customer’s order amounts.

CRA can review your assets and bank accounts without your permission.

This is pretty scary stuff. If you have any kind of weath or assets, these penalties can get very serious, very fast.

Come on in and talk to an accountant and we will get you on the road to peace of mind.

T4s are a focus this year for the CRA.

The fine is $1000 per business with no or late T4s. In prior years, a strategy was to post management salaries to business income on the T1. CRA is does not consider this to be in compliance with filing requirements.

Is this greek to you? Give us a call to see how this applies to your business.

Jamie Abbott, CMA
905 492 6383

Top Ten Tax Saving Ideas for 2010
1. Deduct home office expenses for self employed individuals, commission employees and T2200 employees.

2. Deduct automobile expenses if eligible

3. Deduct tax credits for

• Medical Expenses
• Public Transit
• Child Fitness Tax Credit
• Tuition and Education Credit
• Charitable Donations

4. Deduct Child Care Expenses

5. Deduct Carrying Charges

6. RRSP Deductions

7. Apply business losses (if any) against employment income or carry them back against prior years.

8. Consider RESP for your children.

9. Keep your receipts.

10. Avoid scams and “too good to be true” offers.

As a business owner, you work hard to grow your business. The work of an entrepeneur is never done! Taxes and paperwork piled upon our already busy lives can be too much to maintain. Let us focus on the books & taxes so you can focus on growing your business.

The steps to getting back on track are:

Firstly, bring your records together and estimate your taxes owing. Payroll withholding funds and HST are the personal responsibility of owners and directors. Don’t wait for the assessment to come or the auditor to call.

Secondly, use a program like the CRAs Voluntary Disclosure program where penalties and interest can be reduced. You don’t need a lawyer to participate in this program.

More info can be found at: http://www.cra-arc.gc.ca/gncy/nvstgtns/vdp-eng.html

Thirdly, provide a complete and accurate disclosure to avoid penalties. The key is clean and accurate books & records.

Lastly, tax avoidance is perfectly legal. Every taxpayer has the right to arrange their affairs to minimize tax. Tax evasion is illegal and is the act of hiding income or taxes to defraud the government usually after the fact. Talk to accountant and your alternatives and choose the one that’s best for you.

We would be pleased to discuss all of your alternatives and help you get back in the black. Click on the attached link or contact tab above. Someone will contact you shortly to set up an appointment at your convenience.

http://www.summitcma.ca/contact/

Instalment Payment Summary

So you’ve just received an Instalment Payment Summary from CRA. What should you do?
Speak to your accountant to determine why you are being asked for instalments. Did owe more than $3000 in taxes in 2009 as a result of inadequate payroll withholding or business income?
Secondly, assess whether that situation is expected to reoccur. If you plan to make a RRSP contribution to reduce the taxes owing or you expect to make less income, you are not required to pay the instalment. But beware, if after calculating your 2010 taxes you owe again, CRA will assess interest in any unpaid amounts from the planned instalment dates.

Several options exist to minimize instalments based upon your situation. Work with your accountant to set up an instalment schedule that works for you. If you are employed, speak to your employer about withholding additional taxes if you cannot make lump sum payments.

Summit CMA services clients throughout Toronto and the Durham Region including Pickering, Ajax, Whitby and Oshawa.

Tired of nasty surprises at year end? Let’s get together and plan to reduce your expected tax liability. CRA and the Income Tax Act allow you to arrange your affairs to minimize tax but this requires proper planning, set up and documentation. Planning and action equals tax avoidance. Actions taken after the year end usually equal tax evasion.

Summit Certified Management Accountants specialize in accounting for Small and Mid-Sized business in Durham Region. We can help you stay in compliance and out of trouble. We can recommend strategies to minimize your tax burden while providing peace of mind. We take the time to understand your unique situation and work with you to improve cash flows, lower expenses and minimize taxes. Call us for help with your Personal Taxes, Corporate Taxes (T2), Bookkeeping and Payroll needs. We help clients in Pickering, Ajax, Whitby, Oshawa and Toronto.

1. The Home Renovation Tax Credit

2. Medical Expense Credit

3. Public Transit Credit

4. Child Fitness Tax Credit

5. Tuition and Education Credit

6. Child Care Expenses

7. Charitable Donations

8. Employment Expenses

9. Carrying Charges

10. RRSP Deductions and non-deductible but important TFSA contributions

Summit Certified Management Accountants – We specialize in accounting for Small Businesses and individuals. Call us for personalized service with your Personal Taxes, Corporate Taxes (T2), Bookkeeping and Payroll needs. We’re helping clients in Pickering, Ajax, Whitby, Oshawa and Toronto.

“We filed this way last year and CRA was okay with it”….. “It’s been two years so I guess we’re alright now”….”We file when we can, and they’re okay with it”

When CRA contacts you for an audit they generally look at three years at the same time. Let’s assume that a $100K loan to shareholder is re-assessed as Employment Income. The corporation will be charged for payroll withholding taxes, interest and penalties for those three years. Because CRA found this item, the corporation will not be allowed this deduction however it will be fully taxable in the hands of the shareholder resulting in double taxation. Can you imagine the effect of a $100K+ tax bill on your finances? In cases of fraud, CRA will open more than three years.

Not filing on time increases your risk of being audited. CRA is a profit center; they track revenues and have goals just like every other business. They know that their reassessments are higher for businesses which do not file their GST, Income Taxes and Payroll Withholding on time. They fish where the fish are!

We can help you stay in compliance and out of trouble. We can recommend strategies to minimize your tax burden while providing peace of mind.

Summit Certified Management Accountants specialize in accounting for Small and Mid-Sized business in Durham. We understand the unique situations small business owners face and work with them to improve cash flows, lower expenses and minimize taxes. Call us for help with your Personal Taxes, Corporate Taxes (T2), Bookkeeping and Payroll needs. We assist clients in Pickering, Ajax, Whitby, Oshawa and Toronto.

File your returns on time. CRA will assess interest from the point at which tax was due regardless of your filing date; however CRA will assess late penalties and fees for late filed returns. CRA’s 2009 prescribed interest rates can be found at:

http://www.cra-arc.gc.ca/nwsrm/rlss/2009/m03/nr090304-eng.html.

If your cash flow won’t allow a payment, separate the return and payment. File your return on time and make payments as your cash flow allows. CRA’s interest rates for 2009 were more affordable than some bank loans. Late filing fees can be 50% of any amounts owing, so watch out.

Summit Certified Management Accountants specialize in accounting for Small and Mid-Sized business in Durham. We can help you stay in compliance and out of trouble. We can recommend strategies to minimize your tax burden while providing peace of mind. We take the time to understand your unique situation and work with you to improve cash flows, lower expenses and minimize taxes. Call us for help with your Personal Taxes, Corporate Taxes (T2), Bookkeeping and Payroll needs. We help clients in Pickering, Ajax, Whitby, Oshawa and Toronto.