Canada Needs a Financial Plan

According to a July 23 publication by the Fraser Institute, we are getting poorer here in Canada and the prospects for economic growth are looking grim.  This should be of concern to every Canadian concerned about their “real income” – that’s their purchasing power – and by extension - their ability to fund consumption now and for important family milestones in the future:  retirements, education and homeownership.  It’s grim, but there are practical suggestions for a turn around plan. Here’s a synopsis of the report.   

The Refundable Medical Expense Supplement is a tax credit claimed on line 45200 of the T1 return targeted at lower income earners.  If the credit exceeds the taxes payable, the balance will be refunded to the taxpayer. CRA provides an area on the Federal Worksheet that accompanies the income tax package to make the calculations. The trouble is, few people know about it.

Filing a tax return is always a good idea, but chances are CRA will owe you money even if you don’t have any income at all.  That’s because you may be eligible for some refundable tax credits. However, for the majority of people who have at least some income – and that includes teenagers who qualified for the CERB and other pandemic supports this year, it’s important to know the answer to this question:  who should file a tax return and who must file one? 

It’s not too late to learn to prepare personal income tax returns from your home or office and now you can confidently learn and practice doing 2020 tax returns with Knowledge Bureau’s newly released 2021 Professional Basic Tax Course. 

You may have heard the saying “the harder I work, the luckier I get.”  When it comes to tax, bookkeeping and financial advisory services,  it can also be said that the more education you have, the better the advice you’ll give to the benefit of your lucky clients.  For these reasons, we offer you twin “pots of educational gold” on this St. Patrick’s Day.    

Canada’s last Federal Budget occurred on March 19, 2019.  The 2021 budget has now been deferred again making it more than two years since our country had one.  Why is this important news?  Because Canadians need to make decisions about their financial futures, with the benefit of economic forecasting and certainty about tax law.  And there are many recommendations about needed change to talk about.  

In any already complex tax year for many taxpayers who claimed COVID-19 income support benefits, there’s another complication being added to the mix. Last week, the CRA confirmed that some taxpayers who repaid benefits they were not eligible for in 2020 have received tax slips that incorrectly include portions of the repaid benefits as taxable income.