Podcast: Automatic Tax Filing - Will It Work?

Last week Taxpayers' Ombudsperson François Boileau  tabled his annual report:  In Pursuit of Better Service: Taxpayers Deserve More.  once again, it was nothing short of scathing, as CRA received its highest number of complaints in the last three years.  Calling our “completely nuts” Income Tax Act a potential barrier, he is nonetheless pushing for automatic tax filing as a potential solution.  A new episode of Real Tax News with Evelyn Jacks & Friends available next week, will feature guest Gillian Petit, Ph.D. - author of a great report, Welcome News for Lower-Income Canadians, but There’s More to Do - which takes a deeper dive.  Consider the following:

Most people know that the tax system allows for a non-refundable tax credit on the T1 known as the Tuition Fee Amount. But, you need to have taxes payable for it to work to your advantage.  If you don’t the claim may be transferred from the student to the supporting individual – a parent, a spouse or a grandparent. But there is a maximum limited:  only $5000 can be transferred and unfortunately this amount is not indexed to inflation.  It’s a tax reform change that is long overdue as the cost of education has increased over the years.

This fall, more students may be stressed by debt and one of the reasons why is the repayment of the CESB.  In 2020, students could qualify for the Canada Emergency Student Benefit of $1,250 for a 4 week period for a maximum of 16 weeks.  An extra $750  for a total of $2000 per month was available if the applicant had a disability or dependants.  But now there is a cash flow problem for some students:

Effective August 1, new 30-year mortgage amortizations are available for first-time home buyers purchasing newly built homes. For our August poll we asked tax and financial professionals if this is an option they’d recommend to their clients, and there was an interesting mix of votes, 66% said “no”, but 34% said they would – their comments provide great insight for homeowners who may be eligible for this program.

The system is just wrong!  Think of the problems your clients are having with CRA and their TFSA audits.  The TFSA contribution room on the MyAccount portal does not coincide with actual contributions, yet CRA is giving.  Another issue is the lack of use, improper use and/or set up of health spending accounts which are so important to small business owners.  How do you make sure that these plans are audit proof? Lastly, there are inheritance/crypto scams out there. . .are you talking to your clients about this?  Find out more in this informative Society of Real Wealth Managers Round Table hosted by Doug Buss,  CLU, CPCA, CFP, CEA, RWM™, FDFS™ at the September 18 Virtual CE Summit.

Dr. Andreaa Vanacker will share her remarkable story and experiences to help you consider the role of joy and purpose in financial decision-making. You’ll be exposed to a new perspective in encouraging those you influence, to assess their legacy and optimize their most important asset: time. Learn more, only at the Acuity Conference for Distinguished Advisors November 10-12 in Montreal. Register by the September 15 early-bird deadline!

This is an annual favorite book, especially at year end tax planning time, by Jenifer Bartman and Evelyn Jacks from publisher Knowledge Bureau. It addresses a common family secret that plagues millions of Canadians from coast to coast: what to do with the family business at a time when boomers are contemplating retirement.  Will the business sell for the millions owners hope for, blow up, or just wind down?   Will family relationships survive it all?