KSF Accounting & Tax Solutions
Keele St L4K 0G7 Woodbridge, ON, Canada

RENTAL PROPERTY AND TAX RETURN If you own a rental property or rental part of the house, you must report the rental income that you have received in your tax return. Your tax return will require you to fill up the Statement of Real Estate Rentals schedule T776.... The T776 tax schedule asks for the address of the property, units rented, the rental income generated from the property and the expenses incurred to keep the property operational. In the Statement of Real Estate Rentals schedule, you will deduct all of your expenses from your gross rental income. The rental income remaining (if any) is what you pay tax on. Rental Income The rent collected from the property is your gross rental income. Expenses The expenses can simply be explained as costs incurred to keep the rental property in business. The expenses are broken down into 2 categories. 1) Non-Capital Expenditures 2) Capital Expenditures Non-Capital Expenditures Non-capital expenditures are deducted from your rental income in full in the year they occurred and reduce your overall tax burden. Typical expenses for a rental property in Canada are: Property insurance, mortgage interest (only the interest), advertising, legal fees, accounting fees, property manager wages, repairs, property taxes, utilities, supplies and vehicle expenses (only if you meet some specific criteria). Capital Expenditures Capital expenditures are expenses that provide a benefit or advantage over multiple years. Example, the cost of a new roof or a new backyard deck which is expected to last many years). Capital expenditures are deducted from your rental income year-over-year, through depreciation, rather than in full in the year they occurred. For a simple explanation, if a new furnace costs $5000 and lasts 10 years, you will get a $500 expense deduction each year ($5000 / 10 years). In practice, the calculation is different and is driven by Canada Revenue Agency's (CRA's) guidelines using the Capital Cost Allowance (CCA) the details of the method used in the tax return is complex and are beyond the scope of this article, so ensure you speak to an accountant before you proceed with filing your personal tax return. The following are expenditures that are not allowed as eligible tax deductions. - If you live in the property, your personal portion of the expenses has to be calculated and cannot be deducted - The principal amount of your mortgage payment - Land transfer taxes You should contact a tax professional, if you have any questions regarding this topic my contact information can be found below.. KSF Accounting & Tax Solutions Nicolas Valcourt, CPA, CMA Email: [email protected] www.KSFAccounting.ca

Court orders PayPal to give business account details to CRA Business customers who used service between 2014 and last Friday are affected See the following information regarding how that unreported revenue could be tracked down by CRA.... http://www.cbc.ca///canada-revenue-agency-paypal-1.4403027

The Canada Revenue Agency (CRA) has put together a list of the most common mistakes Canadians make on their income tax returns. In its most recent tax information newsletter for individuals, published on March 24, the CRA says that moving expenses, student loans, tuition and education costs, medical expenses, and public transit deductions are the five areas where they tend to find errors. Moving expenses:... The CRA audits investigations reveal that there is a high frequencies of ineligible kinds of moving expenses that are being claimed, such as costs for home staging, mail-forwarding, or storage expenses. The other problem is with the proof of that the expense really occurred. Example, the moving receipts are not included, have a date that does not support the claim, or they do not indicate that a payment was made in full. Education expenses: Student loans sometimes pose a problem for taxpayers because they try to claim interest that is not eligible, such as interest on student lines of credit or foreign student loans. They may have also failed to include loan payment receipts that show the taxpayer's name. Another problem area is involving tuition, education, and textbooks. In many occasions, taxpayers fail to provide official receipts, claiming part-time months as full-time months or claiming tuition amounts from unrecognized educational institutions. Medical Expenses: As for medical expenses, CRA audits will uncover an large number of medical expense claims. The following are common ineligible medical expenses claims, money spent on massage, kinesiology, or cosmetic treatments received from medical practitioners who are not recognized by the applicable provincial authority. The CRA also specifies other ineligible medical expenses such as vitamins, natural supplements, or over-the-counter medications, non-hospital beds, and medical supplies such as rubbing alcohol, bandages, and shoe inserts. Public transit pass: When claiming the public transit expenses, taxpayers fail to provide the transit pass or the receipt. In order to pass the CRA audit, the transit pass must include the taxpayer's name or unique identifier, and the signature or identifying information should be legible. However unfortunately the Public Transit Pass Credit has been eliminated effective July 1, 2017. Written by KSF Accounting & Tax Solutions Nicolas Valcourt, CPA, CMA Email: [email protected] www.KSFAccounting.ca

One way to maximize your tax saving is by making the right decision on how you elect to account for the HST. The two options offered by the Canada Revenue Agency (CRA) are simply called the quick method and the regular method. Someone may easily believe that both methods would result to the same tax amount and one method would be faster to calculate, however the reality is that difference is more than just about the speed to make the calculations! Depending on your situation,... one method will result to more tax saving than the other. For example an IT consultant with a revenue of $100,000 and Input tax credits (ITC) expenses of $5,000, that business would pay $12,350 in HST tax using the regular method versus $9,644 using the quick method. This is a $2,706 in tax savings by only choosing a better method to your bottom line. Long method HST calculation Revenue $100,000 x 13% = $13,000 Expense $5000 x 13% = $650 HST tax to remit = $12,350 Quick method HST calculation Revenue $113,000 x 8.8% = $9,944 Business Supply rebate $30,000 x 1% = $300 HST tax to remit = $9,644 The following is the CRA link regarding HST calculation. http://www.cra-arc.gc.ca///bspsbch/rtrns/clcltng-eng.html Contact me directly if you want more information regarding this topic.

KSF, Key Successful Factor is a strategic management tool that identifies key activities or physical advantages that a company must perform well or must be maintained in order for your company to be able to survive in today’s very competitive market. For example, the key successful factors for an owner operating a garage in a busy intersection of the city could be: 1. good location... 2. ability to offer the lowest cost in the industry 3. dependable repair work Whereas the key successful factors for an owner operated in a non-busy intersection of the city could be: 1. great online presence 2. friendly services 3. dependable repair work Companies must be able to understand or recognize three or four of those critical key successful factors, but most importantly they should be able to take advantages of them. Do you know the KSF of your company? Do you intentionally take advantage of them? If not, I would personally recommend to take a look in how you can make your company better by identifying your keys successful factor. You can contact me if you want to know more about this topic. Nicolas Valcourt, CPA, CMA