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We are pleased to provide a variety of resources on accounting, taxation, and other related subjects that we think you will find helpful to both individuals and businesses. Browse through the Quick Tools resource menu then, if you have a question that isn’t answered, we can help to clarify your situation. Simply contact us by email or give us a call at 778-792-3282. We would be happy to meet with you for a free, no-obligation consultation to discuss your unique situation.

Expenses Associated with Medical Treatment: What Can You Claim?

Hello everyone, we have some very useful information for you today, especially if you regularly travel for medical care, a mere 80km round-trip, entitles you to tax deductions that can add up to great savings at the end of the fiscal year, especially if the trips are frequent. 

To begin, meal costs can be claimed, up to fifty-one dollars per day or seventeen dollars per meal can be claimed on trips for medical care, and even better, itemized receipts are not required. As always however, be sure to record the exact amounts with precise dates as well as keep documentation on your medical visit as the CRA may request documentation regarding the distance and duration of medical visit.

In addition, fuel expenses may also be claimed, in the province of Ontario it is fifty-five point five cents per kilometer, while in British Columbia it is fifty point five cents per kilometer, for a full list of provinces copy and paste the link at the bottom of the post.

Finally, if more than one-hundred and sixty kilometers are traveled round-trip than accommodations may be deducted as well, in this case though receipts must be kept. 


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Seasons Greetings: Charitable Donations

Hello everyone, the holiday season is upon us and with the spirit of giving alive and well, it’s a good time to discuss Charitable Donations. In addition to providing great assistance to a worthy cause, a donation to a registered charity can help you with significant tax savings. At this particular point in time, a charitable donation provides a tax credit federally at 15% for the first $200 donated and and 29% for the amount after $200. Additionally, there are different rates for a provincial sales credit as well in Ontario it is 5.05% for the first $200 and 11.16% after $200. For British Columbia, the rate is 5.06% for the first $200 and 14.7% after $200. With large enough donations this is a considerable difference, and can reflect thousands of dollars in personal tax savings. Remember that these tax credits can only be obtained by donating to registered charity and with proper receipt of the payment, evidence of a pledge is not sufficient. Time to give charitable donations for the 2017 taxation year is running out so don’t delay! Giving generously can grant significant boons in life and in finance, happy holidays from JAIKS Inc.


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Renting Out Part of your Home: The New Rules

Hello everyone, in today’s market of record high real estate prices many home owners are electing to rent out a portion of their homes. Whether this is to lessen the financial burden of their mortgages, place an alternative revenue stream in savings, supplement their income, or all of the above, the practice is extremely common. 

Unfortunately, the recent changes to principle resident rules have effected the rules regarding renting a portion of a home. Currently, if you change part of your home into a rental or business operation you are deemed to have sold (as far as taxation is concerned) it at a fair market value and to have reacquired it at the same amount. Furthermore, any income or loss generated by the change must be reported in the year the change occurs.

This means for homeowners who rent out part of their home that any income realized through renting part of the property in years after the change of use must be reported and will be taxable upon the sale of property. Interestingly enough, it is possible to seek exemption for the change of use rules if no structural change to the property is made to make it more suitable for rental or business or if the rental or business area is very small. These exemptions fall entirely to the discretion of the CRA and what they consider to be “reasonable.”

With these changes and more likely to follow, it is more important than ever to have an experienced tax representative at your disposal.

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The Principle Residence, the Home Office, and the Taxpayer

Hello everyone, as has been discussed previously there are new rules in place governing what constitutes a principle residence and the reporting of such for tax purposes. In addition to tightening the definition of what constitutes a principal residence, stating that to claim such someone must reside there at least 50% of the time. The CRA has also changed their language regarding home offices. The CRA 2016 tax planning guide rigidly defines the home office as a section of a principle residence “used on a regular and continuous basis for meeting customers, clients, or patients.”

If you are self-employed and utilize a home office, you can deduct a portion of the operating cost of your home. For example, if your home office takes up 15% of the total square footage of your home you can claim as a deduction from your business income 15% of property taxes, hydro, heat, home insurance, maintenance costs, and even 15% of your mortgage interest (but not principle). These expenses cannot exceed $5000 in a fiscal year but can be carried forward and claimed against income in the next year.

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The Tuition Tax Credit: Not Just for University

Hello everyone, September is not far off and many are entering post-secondary education in the hopes of starting a career or bolstering their credentials. What many are not aware of however, is that program costs outside of university or college tuition are often eligible for tax deduction. For example, examinations that are for  trade, occupation, or professional credentials and paid to an institution with the intention of acquiring professional status recognized by the provincial and federal government, as well as those that allow applicants who pass to be licensed and certified as a trade person allowed to practice in Canada may be eligible for a tuition tax credit. Be sure to save receipts from any such examination to ensure you or your loved ones receive every break you are entitled to.   

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RRSP vs CPP: Utilizing the Best Tools Available

Hello everyone, we’ve previously discussed the usefulness of RRSP contributions both to prepare for one’s retirement and for tax relief. Recently, a Statistics Canada study was completed that found RRSP contributions actually decrease when mandatory work-place Registered Pension Plans are increased. The Canadian Pension Plan is slated to require increased contribution by 2019. Statistically speaking, citizens are more likely to decrease their RRSP contributions after that, and while the logic seems sound; why would someone increase their RRSP contributions if they’re effectively being forced to save for their retirement? Well CPP contributions do not have the same benefits as RRSP contributions, RRSP contributions can be used to lower your income bracket and potentially save you thousands of dollars in taxes. Don’t let mandatory increases to CPP contributions steer you away from the best tools available, and talk to your tax professional.

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Budgeting and Your Financial Future

Budgeting is not an enjoyable task but it is frequently key to your long-term success and happiness. The number one stressor within relationships in Canada is, you guessed it, finances; A survey among 3000 couples found that for 82% the number one issue is money, a very good reason to have an agreed upon financial strategy with your partner. As a first step, it is vital to record your income and expenses for a broader picture of your finances, this can be daunting as you realize just how expensive simple indulgences can be, if you purchase a fifteen-dollar lunch everyday at work, five times per week, that is $300 per month or $3600 per year! 

With this in mind, it can be enormously beneficial to seek the consultation of professionals certified in Real Wealth Management, able to analyze your finances both objectively and thoroughly to better assist you with your short and long term financial goals which brings us to our next step, creating a wish list. 

What are your long term financial goals? Do you want to send your children to college? Be debt free? Pay off your mortgage five years early? Whatever your goals are it is important to reconcile them with your budget. What expenses can be trimmed and the money saved contributed to your goals? It is fundamental to ask yourself what you want for your future, and determine which funds  you can allocate to these goals per month. 

Here are some tips to keep in mind for reducing expenses, do not use credit cards wherever possible, use cash. When you shop for essential items bring no more than $10 or $20 more than you think you’ll need so that you’re not tempted to spend more than you’ve budgeted.  Use coupons regularly, even small discounts on regular purchases can add up to thousands of dollars saved over the course of a year, and be sure to keep these in accessible place where you will not forget them. If you still have cable or a landline phone, they have effectively become obsolete, there are plenty of streaming services via the internet that can get your favorite shows and events at a fraction of the price of a cable package, while landlines have been made largely irrelevant by cell phones. These are just a few basic tips that can help you manage your own finances, if however in the past you have tried and failed to stay on course to achieve your own goals, it may be time to seek certified professional assistance, especially when it comes to budgeting and negotiating CRA debt. For more information on budgeting strategies check out “The Only Budgeting Book You’ll Ever Need” by Tere Stouffer or Gail’s Guide to Building a Budget online here: http://www.gailvazoxlade.com/resources/guide_to_building_budget.html 


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Frequently Unused Tax Credits and Deductions

With the April 30th filing deadline fast approaching and many people in a hurry to meet it, it can be easy to overlook tax credits and deductions that Canadian tax payers may be entitled to. The following is a brief list of a few deductions and credits that are frequently overlooked, the first are moving expenses. Provided the move is at least 40 kilometers closer to one’s job or business moving expenses are eligible for deduction, less commonly known is the fact that moving expenses for one’s children (provided they are full-time students) also can be claimed with the similar restrictions of the move being at least 40 kilometers closer to their school. In the event receipts from the travel are not saved, you may claim meal expenses at $51 per day and vehicle expenses at 43.5-59.0 cents per kilometer of travel depending on the province. Another commonly missed deduction comes from the fact that healthcare premiums unbeknownst to many, can be claimed as healthcare expenses if the total medical expenses for that year exceed $2237 or three percent of one’s income or that of their spouse, whichever is lower. Finally, if you or a loved one have claimed a disability tax credit for the 2016 year but have suffered the disability for years it is possible to seek adjustments on returns from up to 10 years ago.  

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Important Changes to the Ontario Student Assistance Program

With the government's educational reforms taking effect this year there are some major changes to the Ontario Student Assistance Program that anyone interested in a post-secondary education should be aware of. For the first time in Canadian history OSAP now offers citizens without $50,000 of family income or an existing post-secondary degree, assistance up to and beyond, total tuition coverage for an eligible institution. provided that they don’t already possess a post-secondary degree.


The use of “citizen” (although there are also allowances for permanent residents and protected persons) instead of “student” is important, as this offer applies to "mature students" as well, there are no requirements that an applicant currently be a student.  “Eligibility for the new program will not depend on the numbers of years out of high-school or program level” assures Sean Greson issues manager for the Ministry of Advanced Education and Skills development. In addition to this, assistance to applicants with children are more accommodating; Childcare costs factored into assistance.


If you are interested in learning more, follow the link to the general information website and OSAP calculator here: https://www.ontario.ca/page/osap-ontario-student-assistance-program?_ga=1.209252434.1951252719.1489095943

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Sale of Principle Residence

Hello Everyone, today I would like to inform you of an update regarding the sale of one’s principle residence. As you may already be aware, the sale of one’s principle residence in Canada is exempt from capital gain tax, because of this there generally hasn't been a reason to report the sale, but the rules have changed for the 2016 return and onward.

While the sale of one’s principle residence does remain free of capital gain tax for the years it was designated as the owner’s principle residence, the transaction is now required be to reported under the Capital Gains section of the T1 Income Tax and Benefit Return. Late designations of a property as a principle residence can be adjusted with a penalty of $100 per month (to a maximum of $8000). A principal residence does not have to be the house where the owner resides all the time, indeed according the CRA the property may qualify as a principle residence if the owner, the owner’s children, or the owner’s spouse reside there at some point during the year, although this can change if the property is rented out. It is also important to remember that an owner and spouse may only have one principle residence between them, this principle residence may even be outside of Canada. The above change also apply in the disposition of property even though the property has not actually been sold in such a case. 

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Tax Changes for Your 2016 Return

Hello Everyone, April is approaching fast and there are several tax changes that will take effect this year and potentially alter your return. We here at JAIKS believe that just about everyone should be informed of shifts within the taxation landscape, and so have taken the time to talk about a few of the more broadly reaching changes. 

Among the more controversial changes is the elimination of the Family Tax Cut which allowed individuals to transfer up to $50,000 of income to a spouse lower income if they have a child under the age of 18, to a maximum benefit of $2000. While a bit of a blow to middle class families who had come to expect the benefit in the past, there are still a number of ways depending on circumstances, to split income.

Another set of important changes comes in the form of new rules for several child benefit tax breaks, fitness and arts credits for children under sixteen are being cut in half, $1000 to $500 and $500 to $250 respectively. Still, these changes may be more than made up for (depending on income status) with the Enhanced Universal Childcare Benefit with which parents of children under 18 can get up to $6400 per year for each child under the age of six, or a maximum of $5400 per year for each child aged six to seventeen.  

Finally, there have been adjustments to the federal tax brackets. If you make between $45,282 and $90,563 per year your tax rate will drop from 22% to 20.5% from the previous year.  Meanwhile another bracket has been created for those who earn more than $200,000 per year the rate has been adjusted to pay 33% on every dollar earned above that figure, an increase from 29% last year. 


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RRSP Contributions

Hello Everyone, T4’s are right around the corner and with them information on your yearly gross income. It’s never too early to think of the future, especially if it’s been a particularly good year and you find yourself in a higher tax bracket. It may be time to sit down and discuss an RRSP. The contribution deadline is March 1st. It’s certainly worth considering, as strategic RRSP contributions could save you thousands of dollars.

Even if your income hasn’t changed from the previous year there can be a number benefits to making an RRSP contributions. Making an RRSP contribution could lower your income tax bracket. If for example you make 52,000 dollars per year, a 3000 dollar RRSP contribution that year will bring you from the 26% tax bracket to the 20.5% bracket. Furthermore, deferring a portion of taxable income until the money is withdrawn at retirement means that you may be in an even in a lower earning tax bracket at that time, in addition to collecting the interest that the RRSP will accumulate.

The maximum amount of RRSP contributions for the year 2017 is the lowest of 18% of your earned income from the previous year or $26,010. Income for the purposes of this measurement includes salary or wages, rental income, alimony, and other income sources that are not investment income. It’s important to remember that if you’re the member of a Company Pension Plan or Deferred Profit Sharing Plan, the amount that will be deducted from your RRSP limit is easy to see on your T4 as your Pension Adjustment.

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European Pension

Were you or your parents born in Europe? Did you or your parents work in a European Country for several years? If you answered yes to either one of those questions, you or your parents may be entitled to a pension regardless of how long you’ve lived in Canada. At JAIKS Inc. We’re committed to using our knowledge and expertise to lend a helping hand to our clients. http://europa.eu/…/retir…/state-pensions-abroad/index_en.htm

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6 Deductible Expenses That Commission Employees Should Claim

Are you a commission employee? If so, you may be surprised with some of the expenses that you can claim when it comes time to file your taxes. Commission employees have more freedom to claim expenses than other employees, who may find their options rather limited when it comes to what they can claim as a business expense. If you intend to claim a business expense as a commission employee, you may want ensure you meet the CRA’s criteria to what constitutes a commission employee. Commission employees, as defined by the CRA will need to (as specified in their employment contract) pay for their own expenses, be required to work away from their employers place of business, and receive their pay in whole or in part by the commission earned by the business they conduct. If you feel that you meet the following criteria, you will want to consider having your employer prepare and provide you with a T2200 form, also known Declaration of Conditions of Employment form. Doing so will ensure that your employer recognises and vouches that any applicable business expenses you incur are legitimate and may be claimed. It is imperative that you retain a copy of this form, as well as other documentation recording expenses incurred while conducting business. Should CRA deem audit to be necessary, they will require your copy of the form, as well as proof of the expenses you claimed in order ensure that your claims are both legitimate and accurate.

With this being said, if you consider yourself a commission employee and meet the criteria set out by CRA, you should consider claiming the following expenses if you not already doing so.

6: Office Rent and Home Office Expenses

Expenses relating to either a rented office space or even home office are considered by CRA to be business expenses that you may claim. It is very important to understand that CRA treats these as two very different expenses, with two very separate rules on how they may be claimed. If you make use of a rented office space, make sure to consider a claim. If you pay for the rental fees yourself, you should have no problem in claiming them as an expense. However, if your employer pays for your expense, you will want check with your employer, and find out if they consider it a business expense on their part, or simply include it as part of your payment for the services you provide. If your employer includes these rental fees as part of your income, you should consider making a claim for a business expense.

If you have a home office, you should make yourself aware of the conditions that must be met before it can be claimed as a business expense. Firstly, any space in your home you wish to use as an office space should be designated for business purposes. Additionally, it is expected that you will spend a minimum of 50% of your business time within this space. If your home office meets this criteria, you will want to consider claiming a portion of your housing costs, such as heating, electricity, insurance, and even property taxes as a business expense. If you live in a rental property, a portion of any rental costs and maintenance fees may be considered a business expense. The recommended way to calculate the portion of costs you intend to claim is to divide the area you have designated to be your workspace by total area of finished rooms in your residence. Maintenance costs may also be claimed, but it would be best to limit any maintenance claims to work that is done within the work space.

When you are ready to file your taxes, it’s important to note that these expenses can only be used to deduct taxes that were contributed from business activities conducted within these workspaces. If you are finding that your claim exceeds the amount of taxes that you can deduct, don’t worry: you may be able to carry the expenses forward and use them next year.

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There are some OLD tax saving ideas which are really great to use and should be taken advantage of to drop taxable income. Some of these ideas we are quite familiar with but do not always take full advantage of.

RRSP's can be purchased until March 2, 2015 and can save you quite a bit of money especially if you are in the higher tax brackets. Then when you retire and are in the lower tax bracket it is a good way to pay yourself with lower tax. IF you find yourself still in the higher tax bracket when you retire, come to talk to us as we offer great ideas of what to do with your RRSP contributions after age 65 but before 70 in order to withdraw RRSP income and not lose your old age pension due to clawback.

TSFA's are also great ideas of saving money, they do not reduce your taxable income the same way RRSP's do. But they are a good way to save and the interest from these are tax free. If you need more information on TSFA's come talk to us, we are here to help you.

A NEW great tax credit introduced for this year that you should look into is called FAMILY TAX CUT, The October 30, 2014 announcement included a proposal to introduce the Family Tax Cut, a new non-refundable tax credit of up to $2,000 for eligible couples with minor children. Basically you can now income split up to $50,000 with your spouse, provided you have minor children. This is very advantageous for the family where the income levels between spouses are great. This is definitely something to check out if you fall into this criteria.

We are here to help, just either give us a call and/or fill out our form online.

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The Importance of reporting ALL income from information slips

This penalty consists of a 10% Federal, and 10% Provincial amounts. Whereas some penalties are applied against the uncalculated tax, this penalty is applied to the unreported income. If you voluntarily tell CRA about an amount you forgot to report, they may waive this penalty.

For Example, John filed his 2008 tax return early and hadn't received all of his T slips yet. After he filed, he received a T5 slip reporting $3.50 in interest income and didn't bother to request an adjustment because he thought the amount was trivial. The CRA then reassessed his return later to include the unreported income with no further issues. When John filed his tax return in 2010 however, he had forgotten about and then failed to report $2000 of RRSP monies he had withdrawn for his RRSP when he was tight for cash earlier in the year. When the CRA reassessed his 2010 return to include the unreported income, John was charged a $400.00 penalty, $200.00 Federal and $200.00 Provincial for repeated failure to report income plus interest.This effectively taxed his current income at over 60% due to his negligence in reporting $3.50 two years earlier! Another scarier way to look at it, is tax at over 10,000% on the original $3.50!

The moral of the story is that no matter how trivial, always report income included on income tax information slips.

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Foreign Asset Reporting and the Extreme Costs of Non-Compliance

Unfortunately the penalties for not completing this form are extreme as one large Canadian Corporation group found recently when a judge ruled against the Asper group of companies. Penalties for non filing were enforced even though the company reported all the income from these investments properly.

So what is this form and why is it required? As has been reported in the press both here in Canada and south of the border, governments are concerned with offshore money escaping taxes in the home country. As a resident of Canada and most other western countries, you are taxed on world wide income. This form is simply to track those assets offshore which have the potential to earn income and otherwise escape tax if not reported.

Canada Revenue Agency requires Canadian resident taxpayers to report specified foreign property with an aggregate cost in excess of $100,000 at any time during the year.

Specified properties include the following:

  • Foreign bank accounts
  • Interest in foreign trusts (mutual funds)
  • Foreign bonds, treasury bills and other debt instruments
  • Shares in foreign corporations
  • Real estate
  • Other income earning property

Excluded properties include:

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