2013 Mileage Rates

December 28th, 2012

Mileage rates increased by 1 cent per kilometre, for 2013.   The new mileage rates are $0.54 / kilometre for the first 5,000 kms driven, and $0.48 / kilometre for each additional km.

Here’s the official announcement, along with other rates.

If you receive a tax free travel allowance, be sure your employer is aware of this change.

Filed under: Business tax, Personal Tax by David Boese No Comments »

Reminder!! CPP election

December 21st, 2012

This is just a friendly reminder:  if you are turning 65 soon (or if you have employees who are turning 65), you need to file form CPT30 if you wish to stop paying into the Canada Pension Plan.

Under the old rules, you were automatically able to stop paying into CPP once you began to collect CPP benefits.  Under the new rules that came into effect in 2012, you need to continue paying into CPP at least until age 65, at which point you can choose to stop paying into CPP, but ONLY if you file CPT30.

Employers, don’t get caught.  If you have employees aged 65 to 70, be sure to review whether or not this form has been filed.


Filed under: Personal Tax by David Boese No Comments »

Going down South?

December 13th, 2012

It is the time of season when a number of people do what Canadians do best.  Travel south for the winter.  Since I’m stuck in my office for the entire winter, I will at least bid you a fond farewell and remember to come home in the spring.

I’m also going to take it one step further and remind you of your potential tax requirements.  I hate to ruin a winter vacation for anyone, but if you don’t want a nasty tax surprise it might be wise to plan ahead.

First, take a look at the Canada Revenue Agency’s P151, Canadian Residents Going Down South.  It’s written in good plain English.  Here’s a quick snapshot of some of the points covered.

1.  Foreign property.  Do you own property (land, properties, investments, cash accounts, etc) with a total value of more than $100,000?  If yes, you may be required to file the T1135 form with your tax return.  Some exceptions apply; for example, a property used primarily for personal use.

2.  Income.  If you earn or receive income while outside Canada, you will almost certainly need to declare this as income on your Canadian tax return…….. Canadian residents are taxed on their world income.+

3.  Certain tax credits.  Medical costs in the US, donations to US charities, etc. are discussed in the P151.

4.  US Taxes.  Are you Resident Alien?  A Non-Resident Alien?  The P151 does a good job of introducing the subject, but this is another tax maze where only the brave will enter.  If you are concerned you may be required to file a US tax return, consider talking it over with a US tax professional.


Filed under: Uncategorized by David Boese No Comments »

This column was originally written for Business First, a TC Media publication.

Rowan and Suzanne are the parents of a 6 year old son, named Jason.  When Jason was 18 months old, he was diagnosed with cerebral palsy.

Rowan and Suzanne are able to provide him with lots of love and care….. at least for now.  However, they do sometimes wonder what will happen to their son when they are no longer able to look after him.  As they themselves get older, they recognize that they simply won’t be able to do as much for Jason as they are doing now.  They would really like to set aside some money for his long term care.

Fortunately Suzanne heard about the Registered Disability Savings Plan.  The Registered Disability Savings Plan (RDSP) was set up by the government of Canada to help parents and others provide for the long-term security of a disabled person.  This is done by providing matching Grants, and in some cases Bonds.

In 2012 Rowan and Suzanne contributed $1,500 towards Jason’s RDSP.  The government of Canada matched this contribution with a $3,500 grant.  That means that in one year, Jason’s RDSP grew by a full $5,000.

Rowan and Suzanne can continue to contribute towards their son’s RDSP until the end of the year that he turns 59.  The government will provide up to $70,000 in matching grants over the lifetime.

If Rowan and Suzanne had low income, Jason’s RDSP would be eligible to receive an additional $1,000 per year, even if they didn’t contribute anything towards the RDSP.  This is called the Canada Disability Savings Bond, and the maximum that can be received in Bonds is $20,000 over the lifetime.

The RDSP was introduced in 2008.  For some reason it was not as popular as it probably deserved to be, possibly due to the fact that it was new and a tad confusing.  Budget 2012 announced some new changes.  One of these changes allows you to open an RDSP account today and claim unused grants from prior years.  So if you only found out today that you were eligible, you may still be able to access grants missed in previous years.

Rowan and Suzanne are very pleased that they are able to set aside some money for Jason.  They are also happy that the government of Canada is chipping in with some assistance.  This shared responsibility is the type of government assistance that can truly make sense.

Extras:  If you are interested, head over to www.rdsp.com.  This website has a lot of great information and a really useful calculator.  Or go to www.servicecanada.gc.ca and do a search for RDSP.

Please note that the above example uses fictional names.  Any resemblance to any actual person or situation is strictly coincidence.

Filed under: Consumer Tax by David Boese No Comments »