Changes to Paper Filing Disempowering

Last tax season, only 7% of all Canadian tax filers filed on paper. The CRA is pushing for zero. It continues to steer the holdouts to digitized filing by adding lots of obstacles. Most recently, it is removing almost all the schedules from the tax return package it mails. This seems unfair to people who paper file because they can’t afford a computer and internet, distrust the security of online filing and those who are neither tax or computer literate. Here’s what they are up against:

The Federal Government introduced a Ways and Means Motion on December 7 that will implement the promised middle income tax cut to 20.5%. In addition, there are a host of new tax increases for high net worth clients: Canadian retirees and business owners that tax and financial advisors will want to reach with planning advice soon.

The recent judgment in Ellis v. The Queen shows that it is possible to successful challenge the Crown’s case for penalties, after a third party re-assessment of taxes to a delinquent taxpayer’s spouse. The appellant had been assessed $10,199.73 in penalties under section 163 of the Income Tax Act (the Act) when her husband transferred 50% of their matrimonial home, targeted by CRA to cover his $50,000 federal tax bill.

Although the government is limited to three years to reassess returns in most cases, taxpayers have 10 years to make changes to their returns.  That’s why it’s important to call clients now- especially delinquent filers to preserve tax filing rights.  Specifically, they will have until December 31, 2015 to make changes to or file their 2005 return before it becomes statute-barred.

Thinking of leaving Canada for extended vacations or visits? You will now need to be more careful about your absences if you want to remain eligible to collect social benefits, like the Canada Child Tax Benefit, Old Age Security or Employment Insurance.  That’s thanks to the Perimeter Security Pact between Canada and the United States, which was initiated back in 2011 and has been undergoing four phases of implementation.

Cybersecurity is an issue all tax and financial advisors may find themselves answering questions about this tax season.

Canadians who work with financial advisors are better off financially than those who do not, and many clients feel that their advisors add more than just financial value, impacting many aspects of their lives. That’s the good news. The bad news? Only 36% of clients said they would stay loyal to their advisor’s business when the advisor retires; in fact, about 50% are prepared to walk when you retire.