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Tuesday, October 30, 2007

October 30, 2007 Tax Relief for Individuals, Families and Businesses

Ottawa, October 30, 20072007-083
Canada’s Government Delivers Broad-Based Tax Relief for Individuals, Families and Businesses
The Honourable Jim Flaherty, Minister of Finance, today presented the Government’s 2007 Economic Statement, which proposes broad-based tax relief for all Canadians, including a further reduction of the goods and services tax (GST).
"Given the uncertainty in the global economy, now is the time to provide additional tax relief for Canadians," said Minister Flaherty. "Our strong fiscal position provides Canada with an opportunity that few other countries have—to make broad-based tax reductions that will strengthen our economy and leave more money in the pockets of ordinary Canadians."
Since coming to office 21 months ago, the Government has taken action that will reduce the overall tax burden for Canadians and businesses by about $190 billion, bringing taxes to their lowest level in nearly 50 years.
At the heart of the Tax Relief Package is an additional 1-percentage-point reduction in the GST, effective January 1, 2008. This tax cut fulfills the Government’s key campaign commitment and builds on the initial GST reduction introduced in Budget 2006. For consumers, the total savings from the 2-percentage-point reduction in the GST will amount to approximately $12 billion next year.
Individual savings will be significant:
A family purchasing a new $300,000 home will save $3,840 in GST.
A family spending $10,000 on home renovations will save $200 in GST.
A family spending $30,000 on a new minivan will save $600 in GST.
The GST credit will be maintained at its current level, translating into more than $1.1 billion in benefits annually for low- and modest-income Canadians.
The Government is proposing additional tax relief for individuals and families by:
Increasing the basic personal amount to $9,600 retroactive to January 1, 2007. The basic personal amount will be increased to $10,100 on January 1, 2009. This proposal will provide Canadians with an additional $2.5 billion in tax relief in 2007 and 2008.
Reducing the lowest personal income tax rate to 15 per cent from 15.5 per cent retroactive to January 1, 2007.
Families earning between $15,000 and $30,000 will pay on average almost $180 less in tax in 2008 as a direct result of the tax measures announced in the Fall Economic Statement.
Families earning between $45,000 and $60,000 will pay on average almost $400 less in tax in 2008 as a direct result of the tax measures announced in the Fall Economic Statement.
Families earning between $80,000 and $100,000 will pay on average $602 less in tax in 2008 as a direct result of the tax measures announced in the Fall Economic Statement.

In order to make businesses even more competitive, it is essential
that Employment Insurance rates be reduced for employers and
employees.
The premium rate for employees will fall to $1.73 from its current level of $1.80 per $100 of insurable earnings, effective January 1, 2008. The rate paid by employers will be reduced as well, to $2.42 from $2.52 per $100 of insurable earnings.

The maximum insurable earnings (MIE) for 2008, will be $41,100, up $1,100 from its 2007 level.
The MIE is the income level up to which earnings are insured and on which premiums are paid by employees and employers.

Also for Canadian businesses, the Government will be:
Reducing the general corporate income tax rate to 15 per cent by 2012, starting with a 1-percentage-point reduction in the rate in 2008 beyond the already scheduled reductions.
Reducing the small business income tax rate to 11 per cent in 2008, one year earlier than scheduled.
"We are putting business taxes on a five-year track downward to help stimulate further economic growth and create even more jobs," said Minister Flaherty. "We are ushering in a new era of declining business taxation in Canada. It will be a steady, predictable decline that businesses can count on and can plan on."
With these reductions, Canada’s general federal corporate income tax rate will fall by one-third between 2007 and 2012, and Canada’s corporate tax rate will become the lowest among the major industrialized economies.
The Government also announced it is planning additional debt reduction of $10 billion this fiscal year, for a total of more than $37 billion in debt relief since coming to office. This is the equivalent of $1,570 for each man, woman and child in Canada.
As a result, the federal government’s debt-to-GDP ratio—its debt load as a share of the economy—is expected to fall below 25 per cent by 2011–12, three full years ahead of the original target and its lowest level since the late 1970s.
With the additional debt reduction in the Economic Statement, the total value of personal income tax relief provided under the Tax Back Guarantee will rise to $2.5 billion by 2012–13.
The 2007 Economic Statement is available on the Department of Finance website.

Wednesday, June 6, 2007

CRA Apprenticeship Job Creation Tax Credit (AJCTC)

There’s a new government incentive that your company might be able to take advantage of (started May 2, 2006). Timing: you have 1 year from your fiscal year end to file. The link is below for you to read through. In a nutshell, you get an ITC (Investment Tax Credit) on the corporate tax return for up to $2,000 per apprentice (for their first 2 years of apprenticeship) if they are in a qualifying trade.

The link is pretty well laid out. The most difficult part is to get your employees registered as apprentices. We can then claim the ITC on the tax returns.

We just put through a claim for a hair stylist working at one of our clients’ salon. The company is getting $1900 back.

The formula is Wage paid to the individual in the year (from May 2, 2006) * 10%.

Here’s the link

http://www.cra-arc.gc.ca/whatsnew/apprenticeship-e.html#q4

Wednesday, April 25, 2007

Allowable Home Office Expenses:

These claimable expenses include:

home mortgage interest
property taxes
home insurance
utilities
business phone
landscaping costs

The claimable percentage of these expenses is based on your dedicated home office space divided by the total square footage of your liveable home area space.

Thursday, April 19, 2007

Testamentary Trust Planning

This type of trust (testamentary: included in the will) is very useful for a family with young children. The survivors benefit from this in future tax savings. The tax savings result from the trust earnings being taxed in the child's hands. Since the children make little or no income, no taxes are incurred.
Here's an example of how this testamentary trust works: When the insured dies, his/her life insurance proceeds are transferred into this trust, with the remaining property going to the surviving spouse.
In the trust documentation, it is indicated that the beneficiaries are the children and spouse, the spouse is also the trustee. The spouse is now able to spend the trust money in the interests of the children. These expenditures such as camps, computer purchases, and any other purchase that aids in the progress or enrichment of the children's life are eligible.

Sunday, April 15, 2007

Reasons to Incorporate Your Business:

1)Qualified Small Business Exemption: If the owner of this business ultimately sells the shares of the business, they may qualify for up to a $750,00 lifetime capital gains exemption. There are 4 criteria that need to be met to qualify for this tax-free capital gain. See February blog notes for these 4 rules.
2) Income splitting: You may pay a reasonable salary, and /or bonus and to your family members. This compensation is for the services they have provided to the business.
It's best to document a list of each person's responsibilities performed within the business.
The 'reasonableness' test does not apply to dividends paid. This means that the owner of the business can pay any amount of dividend to a shareholder who doesn't provide any services to the company.
3)Tax deferral opportunities: such as,
a) if your company's year-end is established between July 1 and Dec. 31, employee bonuses payable can be paid up to 180 days, resulting in the individual declaring his/her bonus in the next calendar year and
b) retaining income within the company when not needed personally. This would save you an amount that you would have otherwise paid in personal taxes owing, had this amount been withdrawn and declared personally.
4) Private Health Services Plan (PHSP): This plan recognized by CRA under bulletin IT-339R2 was introduced as a cost efficient and tax effective means of providing health and dental benefits for small and medium sized businesses. This plan is an inexpensive way for incorporated employers and sole proprietors to provide tax free health and dental services for themselves and their dependents, their employees and their dependents. These services are 100% tax deductible to the corporation or the sole proprietor, but not taxable as benefits to the individuals.
We (Elliott & Company CMAs, http://www.ellco.ca/) have an alliance with a Benefit Plan company that offers our clients a special rate due to the referrals that we are providing to this company. If you are currently under a plan (i.e. Shield, London Life, etc.), this alliance will waive the $150 one-time sign up fee. If you are not with an existing plan, your sign up fee will be reduced to $75. A 5% admin fee will be charged, rather than the 10% admin fee that you may be used to for medical/dental claims put through your plan. Those of you that are sole proprietors, you should talk to our associate company about eligibility. If you have employees, you may still be able to use this.
5) Universal Life Insurance: This allows for tax-sheltered growth of the company's retained earnings. One condition is that the premiums of this policy are not deductible within the company. The owner can use these insurance funds for his/her business or personal needs, if a collateral policy is arranged through bank loans. Appropriate documentation and steps need to be taken to ensure that these funds used for personally aren't later deemed from CRA as a personal benefit.
6) Corporate limited liability.

7) Corporate image presence.

COSTS: Being incorporated does come with other costs such as: incorporation fees, annual corporate tax return preparation and financial statement preparation (Elliott & Company CMAs: http://www.ellco.ca/ year-end (notice-to-reader) cost ranges between $500-$800/year).
Also, you may have no choice but to incorporate, if the companies you contract to require you to do so for liability purposes.






Tuesday, March 20, 2007

2007 Federal Budget Business Tax Updates

Business Tax Updates:
Increased Capital Cost Allowance ("CCA") for Buildings - Non-residential buildings are eligible for a CCA rate of 4% under Class I of Schedule II to the Income Tax Regulations. The Federal Budget proposes that the CCA rate for buildings used for manufacturing or processing in Canada of goods for sale or lease be increased to 10% and that the CCA rate for other non-residential buildings be increased to 6%. Eligibility requirements for either of the 2 new classes:
1.) the building must be placed into a separate class, and
2.) at least 90% of the building (measured by square footage) must be used for the designated purpose at the end of the taxation year. These new rules apply for properties acquired on or after March 19, 2007 or where the building was under construction on or after March 19, 2007.
Increased CCA Rate for Computers - Class 45 is presently eligible for a CCA rate of 45%. This rate will increase to 55% for assets acquired on or after March 19, 2007.
Increased Installment Threshold - The Federal Budget proposes to increase the minimum threshold from $1,000 (based on the prior year's corporate income tax liability) to $3,000 beginning for taxation years that commence in 2008. For Canadian Controlled Private Corporations, the Budget proposes that the installment frequency be reduced from monthly installments to quarterly installments to the extent that the taxable income of the Canadian Controlled Private Corporation for either the current or previous year does not exceed $400,000, the corporation qualifies for the small business deduction for either the current or previous year, the taxable capital employed in Canada of the corporation does not exceed $10 million in either the current or previous year and the corporation has no compliance irregularities under the Income Tax Act and the Excise Tax Act for the preceding 12 months.
GST Filing for Small Businesses - Currently, GST registrants with taxable supplies that do not exceed $500,000 in a fiscal year may elect to have reporting periods that are fiscal years which enables them to file an annual GST return and make quarterly installment payments. The Federal Budget proposes to triple the taxable supplies threshold to $1,500,000.

Budget 2007 proposes a new Vehicle Efficiency Incentive (VEI) structure that will cover the full range of passenger vehicles available today. The VEI will have three distinct components and come into effect March 20, 2007:
1. A performance-based rebate program offering up to $2,000 for the purchase of a new fuel-efficient vehicle.
2. Neutral treatment of a broad range of vehicles with average fuel efficiency that are widely purchased by Canadians.
3. A new Green Levy on fuel-inefficient vehicles. These measures, together with a new initiative to encourage Canadians to retire older, more polluting vehicles, will be broadly revenue-neutral.

New Rebate for Fuel-Efficient Vehicles Manufacturers now offer a number of vehicles that are eligible for the performance-based rebate program. Current models qualifying for the rebate will include hybrid electric vehicles, conventional fuel efficient vehicles and the most efficient of the E-85 fuel and flex fuel vehicles. The list of eligible vehicles will be established by Transport Canada by combining the city and highway fuel-efficiency ratings.The thresholds will be based on a combined 55 per cent city and 45 per cent highway rating. Initially, new automobiles with a combined fuel consumption rating of 6.5 L/100 km or less and minivans, sport utility vehicles (SUVs) and other light trucks with fuel consumption of 8.3 L/100 km or less will be eligible for a rebate. These thresholds will be reviewed periodically. The basic rebate amount will be $1,000, and an additional $500 will be added for each half litre per 100 km improvement in the combined fuel-efficiency rating of the vehicle below these thresholds. The maximum rebate value will be $2,000. Efficient E-85 fuel vehicles will be eligible for a rebate of $1,000. Eligible new vehicle purchases or leases as of March 20, 2007, will qualify for the rebate.More information on the program, including the vehicles eligible for the rebate, will be published on Transport Canada’s website (www.tc.gc.ca). The lists of eligible vehicles will be updated as information on new vehicle fuel-efficiency ratings becomes available. Consumers purchasing or leasing (long-term leasing for a period of at least 12 months) an eligible vehicle should keep a proof of purchase or a copy of the lease agreement. Consumers will be asked to show proof of registration, in Canada, of the new vehicle. While the introduction of rebates for eligible fuel-efficient vehicles is proposed to take effect March 20, 2007, the payment of rebates will be made once administration and delivery systems have been put in place. The Government is aiming to make rebate payments by fall 2007. Budget 2007 commits $160 million over the next two years to provide the performance-based rebate.
New Green Levy on Fuel-Inefficient Vehicles For new passenger vehicles (excluding trucks) with fuel-efficiency ratings of 13.0 L/100 km or more, the incentive structure will include a new Green Levy on these vehicles, payable by the manufacturer or importer when vehicles are delivered into the Canadian market. The fuel-efficiency rating will be based on the same combination of city (55 per cent) and highway (45 per cent) fuel consumption ratings used to establish the parameters for the rebate. The new Green Levy will start at $1,000 for passenger vehicles with combined fuel-efficiency ratings of at least 13.0 L/100 km but less than 14.0 L/100 km. The rate will increase in $1,000 increments for each full litre per 100 km increase in the combined fuel-efficiency rating above the 13.0 L/100 km floor, to a maximum of $4,000, for vehicles with ratings of 16.0 L/100 km or more. The levy will apply to new vehicles delivered by a manufacturer or importer to a purchaser (usually a dealer) after March 19, 2007. Inventories of vehicles held by dealerships will not be subject to the new Green Levy. Certain consumer purchase contracts entered into before March 20, 2007, will also be grandfathered. With the introduction of the new levy, the existing excise tax on heavy vehicles will be eliminated effective March 20, 2007. It is expected that this measure will increase federal revenues by $110 million in 2007/08 and $105 million in 2008/09.

2007 Federal Budget Personal Tax Updates

Personal Income Tax Updates:
New Child Tax Credit - This is a new non-refundable child tax credit for parents in the amount of $2,000 (indexed) for each child under the age of 18 years at the end of a taxation year. Conditions: a child resides together with the child's parents throughout the year, either of those parents may claim the credit. In other cases, the credit will be claimable in respect of a child by the parent who is eligible to claim the wholly dependent person credit for the year in respect of the child. Each $2,000 tax credit will amount to $310 of Federal tax savings. If Alberta introduces this same tax savings rule, each Alberta parent of a child under the age of 18 would receive a combined tax reduction in the amount of $510 per child.
Spousal amounts - The proposal is to slightly increase the income thresholds from what a spouse can currently earn from $7,581 to $8,929 for 2007. A high income earner does not benefit from this credit as these spousal income thresholds are set very low.
Public Transit Tax Credit Expansion - extending the tax credit for public transit passes to innovative fare products, such as electronic fare cards and weekly passes."
Increase to the Lifetime Capital Gains Deduction - The current maximum capital gains deduction on qualified farm, fishing and smll business corporation shares is $500,000. The Budget proposes to increase the maximum to $750,000. The capital gains exemption will increase to $625,000 for dispositions from March 19 2007 to Dec 31 2007. The $750,000 limit will become effective for dispositions from January 1 2008 onwards.
RRSPs - Contribution and conversion age from a RRSP to a RRIF: the Budget proposes to increase the age limit to age 71 from the current age limit of 69.
Introduction of "Registered Disability Savings Plan - This plan will be introduced to assist parents and others to save for the long-term financial security of a child with a severe disability. This will have similar principles as those of a Registered Education Savings Plan.
Donations to Private Foundations - Donations of publicly listed securities to public charities have been eligible for a reduced inclusion rate on capital gains since 1997 and a complete exemption since May 2, 2006. The Federal Budget proposes to eliminate the taxation of capital gains arising from donations of publicly listed securities to private foundations for gifts made on or after March 19, 2007. These proposals have significant tests that must be met and include an anti-avoidance measure to prevent inappropriate planning.
Registered Education Savings Plans (RESP)- Federal budget 2007 proposes to:
1.) Eliminate the $4,000 annual RESP contribution limit and increase the lifetime contribution limit to $50,000 from $42,000
2.) Increase the annual maximum contribution that qualifies for the 20 per cent Canada Education Savings Grant (CESG) incentive to $2,500 from $2,000 - for a yearly maximum CESG of $500, up from $400.
The maximum CESG for a year will increase to $1,000 from $800 if there is unused grant room from previous years - The lifetime CESG limit remains at $7,200.
Increased Income Tax Installment Threshold - Currently, individuals are required to make quarterly installment payments in respect of income taxes if the estimated income tax payable for the current year or the actual income tax payable for either of the two preceding years (that exceeds the amounts withheld at source) is greater than $2,000. The Federal Budget proposes to increase this installment threshold amount to $3,000 starting with the 2008 taxation year.
· Working Income Tax Benefit - The Federal Budget announced a new refundable tax credit for low income working Canadians. This credit will be a maximum of $500 for single individuals and $1,000 for families. It will be computed as 20% of earned income in excess of $3,000 to the maximums mentioned. The credit is reduced by 15% of net family income in excess of $9,500 for single persons and $14,500 for families.
Scholarships/Bursaries - The proposal is to recognize all amounts received in the taxation year on account of scholarships and bursaries related to the individual's enrollment in an elementary or secondary school as exempt income (not reported as income).

Tuesday, March 13, 2007

Qualified Small Business Corporation Criteria

Individuals can still claim a $500,000 exemption against capital gains from qualifying shares of a small business corporation.

To qualify for this exemption, individuals must meet the following conditions:

1) Determination test - The corporation must be an SBC at the time of the sale, all or substantially all (greater than 90%) of its assets must be business assets.
2) Ownership period test - The shares must not have been owned by anyone other than the taxpayer or someone related to the taxpayer during the 2 month period immediately before the sale.
3) Holding period asset test - More than 50% of the corporation's assets (on the basis of fair market value) must have been used in an active business carried on primarily in Canada throughout the 24 month period immediately before the sale.

Full details are described under the Income tax act (ITA) subsections within 110.6.

Eligible vs. Non-eligible dividends

Eligible dividends are taxed at a reduced federal rate, by way of an enhanced gross-up (45%) and tax credit(27.5%) for these dividends received by individuals and trusts. This helps to balance out the inequitable tax treatment between a non-CCPC and a CCPC.

Ineligible dividends are those that have existed up to this point, based on an assumed 32% corporate tax rate, the existing gross-up of 25% and tax credit of 16.667% of actual dividends. These rates will continue to apply.

For CCPC's (Canadian Controlled Private Corporation), an eligible dividend is: a dividend that is paid out of the corporation's general rate income pool (GRIP). For calculation purposes, the total eligible dividends declared for the year will be compared to the GRIP balance at the end of the year. This eligible dividend designation is at the discretion of the company paying the dividend, as long as the GRIP balance covers this amount. The designation must be made on the entire dividend: either eligible or not AND this designation would apply to all shareholders.

T5 forms now have boxes available for ineligible (box 10) and eligible dividends (box 24).

For non-CCPC's the situation is the opposite. All dividends will be eligible dividends unless the corporation has a 'low rate income pool' (LRIP). An important difference is that these non-CCPC's do not have discretion as to whether the dividend is eligible or not. The LRIP balance MUST be paid out first as an ineligible dividend before eligible dividends can be paid.

If an eligible dividend is designated when the LRIP has a positive balance then the excess dividend tax will apply.
Note: A non-CCPC generally won't generate its own low-rate income. Therefore, the assumption is that all taxable dividends will be eligible. The exception is if a LRIP pool exists.

Child Care Expense: Check your Earned Income amount

Child Care Expense CRA rules:

The lower income earner has to claim the child care expenses. These expenses are allowed to a maximum of 2/3rds of earned income (rental, business, salary, bonuses). Dividends are not earned income so these payments are not included. The lower income earner should consider drawing a salary, if possible, to allow for the deduction of the incurred Child Care expenses. In other words, 1.5 multiplied by the annual child care expenses incurred would be the minimum income amount desired in order to fully claim this expense.

Tuesday, February 27, 2007

Eligible banks for CRA on-line payments

Bank of Montreal Online Tax Filing Services
Contact your local Bank of Montreal branch; or
Contact your cash management sales representative
National Bank of CanadaCorporate Electronic Services
Telephone: (514) 394-2057 option 3
Fax : (514) 394-6341
Email : info@sibn.bnc.ca
Royal Bank of Canada Payment Filing Service, On-line Tax Filing
Visit www.rbcroyalbank.com and select "24 hour access"; or
Contact your local branch of the Royal Bank of Canada; or
Lyn Lunsted (416) 974-5937 ; or
Royal Direct1- 800 -769-2570
HSBC Bank CanadaPayment Filing Service
Contact your local HSBC Bank Canada Branch
CIBC Government Payment & Filing Service
Contact your CIBC account manager; or
PC Banking Support 1 888 872-2422 ; or
Email: feedback@cibc.com
TD Canada TrustTax Payment & Filing Service
Contact your local TD Canada Trust Branch
Scotiabank Government Tax Payment & Filing Service
Visit www.scotiabank.com/taxpayments/
ATB FinancialPayment Filing Service, Online Tax Filing
Contact your local ATB Financial Branch
Laurentian Bank of Canada Commercial Banking Centre
Contact your LBC account manager; or
Louise Vervais 514-227-2766 , or 1-877-866-5916

Friday, February 2, 2007

2007 Automobile Deduction Limits and Expense Benefit Rates for Business

The 2007 Automobile Deduction Limits remain the same as the rates in year 2006.

The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes for 2007 will remain at 50 cents per kilometre for the first 5,000 kilometres driven and 44 cents for each additional kilometre. For the Yukon Territory, Northwest Territories and Nunavut, the tax-exempt allowance will remain at 54 cents for the first 5,000 kilometres driven and 48 cents for each additional kilometre. The allowance amounts reflect the key cost components of owning and operating an automobile, such as depreciation, financing, insurance, maintenance and fuel costs.

The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2006. This ceiling restricts the cost of a vehicle on which CCA may be claimed for business purposes.

The limit on deductible leasing costs will remain at $800 per month (plus applicable federal and provincial sales taxes) for leases entered into after 2006.

The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers for 2007 will remain at 22 cents per kilometre.

For further details you may click on this link: http://www.fin.gc.ca/news06/06-089e.html

Department of Finance personal tax relief updates

* Increasing the basic personal amount-the amount that an individual can earn without paying federal personal income tax-so that it grows each and every year and remains above previously legislated levels in 2006 and 2007. The basic personal amount will be $8,929 in 2007 and will continue to increase incrementally, reaching at least $10,000 in 2009.
* Permanently reducing the lowest personal income tax rate from 16 per cent to 15.5 per cent effective July 1, 2006.
* Providing all Canadians a break on work-related expenses under the new Canada Employment Credit. This measure took effect July 1, 2006, and recognizes the cost of work-related expenditures such as home computers, bus passes, uniforms and supplies.
* Creating a Children’s Fitness Tax Credit to cover eligible fees up to $500 for enrolment in a physical activity program, effective January 1, 2007.
This tax incentive Encourages Parents to Take Advantage of the Children's Fitness Tax Credit http://www.fin.gc.ca/news07/06-002e.html
* Providing students with a new textbook tax credit, effective January 1, 2006, to provide better tax recognition for the cost of textbooks for students.
Canada’s Tax Fairness Plan, announced on October 31, 2006, built on the tax cuts announced in the budget by proposing significant positive measures to help Canadian seniors by:
*Increasing the age credit amount by $1,000 retroactive to January 1, 2006.
* Introducing income splitting for pensioners to increase the rewards from retirement saving effective as of the 2007 taxation year.

These tax relief excerpts are from the Department of Finance. If you’d like more details you can select the following link: http://www.fin.gc.ca/news06/06-088e.html

Private Health Services Plan (PHSP)

This plan recognized by CRA under bulletin IT-339R2 was introduced as a cost efficient and tax effective means of providing health and dental benefits for small and medium sized busineses. This plan is an inexpensive way for incorporated employers and sole proprietors to provide tax free health and dental services for themselves and their dependents, their employees and their dependents. These services are 100% tax deductible to the corporation or the sole proprietor, but not taxable as benefits to the individuals.

We have an alliance with a Benefit Plan company that offers our clients a special rate due to the referrals that we are providing to this company. If you are currently under a plan (i.e. Shield, London Life, etc.), they will waive his $150 one-time signup fee. If you are not with an existing plan, your sign up fee will be reduced to $75. A 5% admin fee will be charged, rather than the 10% admin fee that you may be used to for medical/dental claims put through your plan. Those of you that are sole proprietors, you should talk to our associate company about eligibility. If you have employees, you may still be able to use this.

Canada Revenue Agency on-line banking payment types:

Alberta corporate tax – Alberta Finance ABCIT (use Alberta Access number 20...)
Federal Corporate tax – TXINS (use Business number)
Federal GST/HST return – GST34
Federal GST/HST remittance – GST58
Federal Payroll Deductions Monthly – 0013 EMPTX

CRA GST Quick Method

This election could benefit your company by you not having to remit all of the GST you collect. This works best if your GST paid on purchases (input tax credits) are low.
The Quick Method of accounting is a simple way to calculate the GST/HST you have to remit. It is generally available for small businesses with annual worldwide taxable sales or supplies (including GST/HST, zero-rated supplies, and associated business supplies) of no more than $200,000 in any four consecutive fiscal quarters over the last five fiscal quarters. The $200,000 limit does not include the following: supplies of financial services; sales of real property; sales of capital assets; and goodwill.

If you use this method, you have to continue using it for at least a year.

New remittance rate for use by small businesses that provide services is 4.3%
for eligible supplies made in a non-participating province through a permanent establishment of the business in a non-participating province.

Credit of 1% on the first $30,000 of eligible supplies
In calculating your net tax using the Quick Method, you are entitled to a 1% credit on the first $30,000 of your eligible supplies (including GST/HST) on which you must collect 6% GST or 14% HST in each fiscal year.


Example:
Qwik Dry Cleaners' services are all performed in Calgary, Alberta, where its permanent establishment is located. It used the Quick Method in 2005 and used the 5% remittance rate in effect at that time. Now it has to determine if it can continue to use the Quick Method in 2006.
Qwik Dry's annual worldwide taxable sales (including GST) were not more than $200,000 in 2005. Therefore, Qwik Dry can continue to use the Quick Method. Qwik Dry's new remittance rate when filing its GST/HST return for the calendar third quarter of 2006 is now 4.3%. This new rate has been in effect since July 1, 2006.


Example:
Quick Method calculation for Qwik Dry Cleaners Calgary, Alberta
Calculation of GST remittance in third quarter of 2006(4.3% remittance rate)
Total eligible sales for the third quarter (including GST) ..................... $22,000


Multiply the total eligible sales by the

remittance rate ($22,000 × 4.3%) .................... $946

Deduct 1% for the first $30,000
of eligible sales ($22,000 × 1%) ..................... $(220)

Third quarter remittance ..................... $726

For further details on the GST Quick method go to:
http://www.cra-c.gc.ca/E/pub/gp/rc4058/rc4058-e.html