In this second article on personal taxes, here are the developments that will affect you when you prepare your income tax returns.

Owners

For federal purposes:

  • Did you buy a first home or condo this year? Make sure you claim the $750 non-refundable tax credit to which you’re entitled. Unlike the taxes, this is a nice way of welcoming you to your home!
  • A quick reminder to help you avoid pitfalls. If you sold your residence in 2017, you will need to provide the Canada Revenue Agency with various information. Should you omit to do so, you will not be entitled to the principal residence exemption and any profit gained (called capital gain) will be taxable. All residential sales must be reported to the tax authorities.

For Quebec purposes:

  • If you were a victim of the floods that occurred in the spring of 2017, a new refundable tax credit of up to $18,000 has been introduced. This is a two-part credit, where the first instalment of up to $3,000 corresponds to 30% of cleaning and preservation expenses exceeding $500. The second part of up to $15,000 corresponds to 30% of repair expenses paid before January 1, 2019 for work performed by a qualified entrepreneur to repair flood damage.
  • You finally put in new windows because their insulation was no longer effective. Good news: the Réno-Vert program has been extended until March 31, 2018. You could obtain a refundable tax credit of up to $10,000 for eco-friendly repair work done to your home or cottage.
  • A new refundable tax credit for the upgrading of residential waste water treatment systems is available, up to a maximum of $5,500. If you incurred expenses for work related to a system for the discharge, collection and disposal of waste water, toilet effluents or greywater in your residence or cottage, this credit is for you.

 

Seniors and retirement

For Quebec purposes:

  • If you’re a senior still in the work force and your salary exceeds $5,000, you could be eligible for the non-refundable tax credit for experienced workers aged 63 and older. Since the eligible age has decreased, you could obtain a credit of up to $600 if you’re 63 years old, $900 if you’re 64, and $1,200 if you’re 65 and older.

 

Healthcare

For Quebec purposes:

  • After several years of reductions, the health contribution has been abolished regardless of your level of income.
  • The maximum contribution to the Quebec public prescription drug insurance plan that you must pay when filing your 2017 income taxes has increased from $660 to $667.

 

Tips

Better knowledge of the deductions and tax credits available will help you maximize your income tax return.

  • Note that the tax authorities will not grant you the deductions or tax credits to which you are entitled if you forget to claim these. They have no obligation to do so.
  • Consult the 2017-2018 Tax Planning Guide, a Raymond Chabot Grant Thornton tax tool that will help you plan your taxes.

Read the first article about 2017 income taxes here.

This article was published in French in Journal de Montréal and Journal de Québec on 2018, April 4th.

Visit taxō, a simple online tax return service with experts that help you quickly maximize your tax credits.

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Online Tax Strategies, April 2018: Netflix Tax in Quebec

Effective January 1, 2019: certain non residents of Quebec in the E-commerce sector will be required to register for QST

Quebec Finance Minister Carlos J. Leitão delivered his 2018-2019 Quebec budget speech on March 27, 2018. The new measures proposed include extending the obligation to register for and collect Quebec Sales Tax (“QST”) to certain foreign suppliers in the e-commerce sector.

Currently, there are no specific rules under the QST system for online sale transactions and, accordingly, the general rules apply. As a result, non-resident suppliers who only make e-commerce sales are not required to collect QST if they do not carry on a business in Quebec.

Generally, the new measures will require these non-residents to register for and collect QST on transactions with specified Quebec designated consumers, that is, recipients who usually reside in Quebec and are QST non-registrants. The concept has commonly been called the “Netflix tax”.

The new requirement will apply to non-resident suppliers, whether or not they are located in Canada. The new measures will also apply to suppliers of digital property and service distribution platforms. The proposed measures are summarized herein.

Download the document below.

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Spring flowers may soon start blooming, but the season is also a harbinger of the time to start preparing your income tax returns. As you know, every year, the governments come out with good and not so good news. This year, will you be richer or poorer? In a two-part series, here’s an overview of what to expect.

 

Taxi and public transit

For Quebec purposes:

  • If you own or are a partner in a taxi permit partnership, make sure to claim the refundable tax credit for taxi owners. The maximum amount is $569. An equivalent refundable tax credit is also available if you have a taxi driver’s permit but not the taxi owner’s permit.

For federal purposes:

  • On July 1, 2017, the tax credit for public transit passes was abolished. You may however claim your transit expenses for the period from January 1, 2017 to June 30, 2017.

 

Donors

For Quebec purposes:

  • You can benefit from an increased income tax credit for your charitable donations if your tax rate is greater than 24%.

For federal purposes:

  • After 2017, you will no longer be able to benefit from the first-time donor’s super credit, which would allow you to obtain an additional tax credit of 25%.

 

Investors

For federal purposes:

  • You contributed to your RRSP in 2017 and even though your income may be less, it doesn’t mean that you have to decrease your contributions. It could be a good idea to hold on to them for a year when your income will be higher. The same strategy also applies for Quebec.
  • Do you make regular contributions to your TFSA? The maximum contribution for 2017 is $5,500. If you’ve never contributed to a TFSA before, you could use your contribution room to invest up to $57,500 in 2018.

 

Students

For federal purposes:

  • For 2017, only the tuition tax credit is available. Tax credits for education and textbooks have been abolished, but Quebec continues to offer the tuition tax credit.

 

Parents

For federal purposes:

  • For 2017, the non-refundable children’s art activities tax credit has been abolished.
  • The non-refundable children’s physical activities tax credit has also been abolished.

 

Caregivers

For federal purposes:

  • The tax credits for dependents with an impairment, caregivers and family caregivers were consolidated into one credit. The new Canadian caregiver credit can represent an amount of $1,032 before the abatement, that is, $6,883 x 15%. This credit can be increased by $323 for a spouse or handicapped child.

For Quebec purposes:

  • The refundable tax credit for caregivers granted to persons taking care of a spouse at least 70 years old with whom they live, in their own home, was increased from $1,000 to $1,007.

Read the second article about 2017 income tax returns here.

This article was published in French in Journal de Montréal and Journal de Québec on 2018, April 3th.

Visit taxō, a simple online tax return service with experts that help you quickly maximize your tax credits.

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Louis Roy
Partner | CPA, CA | Digital and technology consulting

The Canadian Revenue Agency treats cryptocurrencies as commodities for Canadian tax purposes.

This poses a problem for cryptocurrencies which must be valued at each trade. Unlike standard commodities, their price is volatile with markets differing around the planet.

Under the Income Tax Act, cryptocurrencies present new challenges in reporting. In addition, due to the nature of foreign currency exchanges, there are legal quagmires surrounding the purchase of crypto assets abroad. While cryptocurrencies are generally taxed as capital gains, businesses profiting from their trade may see gains taxed as business income. Demonstrating this distinction may require expertise, particularly in the case of masternode maintenance.

Cryptocurrencies and tax strategies

You are considered to be running a business if:

  • You have a history of trades;
  • Those are rapid purchases;
  • You commit an important part of your time to the analysis of the market;
  • You do the research;
  • You finance your transactions.

We will highlight available tax strategies for you, such as incorporation.

The various requirements can be challenging to identify. For instance, taxpayers are required to file Form T1135 with CRA if they own specified foreign property that in the aggregate cost more than $100,000.

In the case of crypto assets, when these are held by third-parties in a foreign state, they may subject to that form. Failure to file results in a minimum automatic penalty of $2,500 for each annual failure to file.

Our tax experts and lawyers will help work through your obligations.

28 Mar 2018  |  Written by :

Louis Roy is a partner at Raymond Chabot Grant Thornton. He is your expert in assurance for the...

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