For most businesses the time frame for claiming a GST or HST refund is four years. If you file a return and missed claiming the Input Tax Credit (ITC) for a refund, you typically have four years from the filing deadline to make the claim. Missing out on GST and HST credits can be a costly mistake for businesses. Make sure you receive advice from a professional accountant if you suspect problems with your GST or HST filings.
If your activities include importing products, make sure your bookkeeper is correctly claiming the GST and HST paid when you import the products. Inexperienced bookkeepers can easily record the amounts paid at customs incorrectly, either by recording the whole amount as duties or only a small percentage of the total as sales tax. When clearing customs the GST and HST amounts paid are not assessed on the value of the duty, but rather on the value of the product. As a result, you have to look at each customs import slip and find the exact amount of sales tax charged. Otherwise you will be missing out on a significant amount of your GST or HST credits.
There are certain businesses that are only allowed two years to make a GST or HST claim. Examples include listed financial institutions and business with sales exceeding $6 million a year. Section 225, subsection 4 of the Excise Tax Act governs Limitations of ITC’s. If you suspect you’ve missed claiming your GST and HST credits and need help fixing your situation, book an appointment with one of our accountants and we’ll let you know what options are available.
Individuals under the age of 60 who are eligible for the Disability Tax Credit, their parents or others who are legally authorized to act on their behalf, may open a Registered Disability Savings Plan (RDSP). The RDSP is a long-term savings plan that helps Canadians with disabilities and their families save for the future. Funds are invested tax-free until withdrawal.
To encourage savings, the Government will pay a matching Canada Disability Savings Grant of up to $3,500 a year on contributions made into the RDSP. The Government will also pay a Canada Disability Savings Bond of up to $1,000 a year into the RDSPs of low-income and modest-income Canadians. Grants and bonds will be paid into the RDSPs of eligible individuals aged 49 and under. The lifetime limit for the grant is $70,000 and for the bond is $20,000.
The grant amount is based both on the contribution made and the family income in a particular year. The government provides matching grants ranging from 1x to 3x the contribution amount up to an annual maximum is $3,500. For family income less than or equal to $87,123, 3x for the first $500 and 2x for the next $1,000, up to the lower income maximum of $3,500. For family income more than $87,123, 1x for the first $1,000, up to $1,000 per year.
The bond is dependent on your family income and not contingent on making RDSP contributions. Income less than or equal to $25,356 will qualify for the full $1,000/yr. For family income between $25,356 and $43,561 the government will deposit a portion of the $1,000.
There’s also a carry forward (catch-up) provision that allows you to claim your unused grant and bond entitlements. Applications can be made until the end of the calendar year in which the beneficiary turns 49. There is a maximum annual catch-up amount of $10,500 for grants and $11,000 for bonds, so it’s important you properly plan your catch-up contributions with your financial advisor.
For more information on claiming the Disability Tax Credit please contact Complete Accounting Solutions for a free 1/2hr consult with a Registered Public Accountant http://www.completeaccounting.ca/results/free-consultation/ .
If you have a disability, there are varying benefit programs and tax credits that may be applicable. At Complete Accounting Solutions, no file is too small for persons with disabilities. We will look into the different programs you are eligible for, provide you with the forms necessary for your medical professional to compete, and handle all government applications.
On your own, the process can be challenging and one simple mistake can result in lost benefits & tax credits. It’s not worth taking the risk on someone who doesn’t have the experience in filing out and following up on these applications. There’s simply too much at stake to get an application wrong. For instance, missing out on the CPP disability program can result in over a hundred thousand dollars in missed benefits over someone’s lifetime.
It doesn’t have to cost a fortune to properly file your applications either. Unlike some of our competition for the Disability Tax Credit portion of claims, such as The National Benefit Authority or The National Disability Tax Consultants, we don’t charge a commission. As professional accountants, we go by our basic filing fees and hourly rates, which is much more cost effective than a 25% to 30% commission.
For a consulation with one of our Langley or Surrey accountants, call 778-298-2415. For a Kelowna, Naramata, or Penticton accountant, please call 250-764-2016.
BC will be converting back from HST to GST & PST effective April 1st, 2013. If you are a GST/HST registrant and are considering a major purchase sometime in the next few months, you could save yourself 7% by making that purchase prior to April 1st. Businesses do not claim back the PST when they are themselves the end user, whereas HST can be eligible for the full input tax credit, a potentially refundable claim. So, if you are thinking of buying a new car or truck, computer, office upgrades, etc., you might save yourself 7% depending on the circumstances by buying now.
If you need help with your PST registration give us a call and we’ll help your business convert to the new sales tax. If you would like GST/HST tax advice from our accountants in Langley or Surrey, email us at
How to choose an accountant
People new to self-employment typically have a hard time navigating all the different aspects of running a successful business. However, one thing most business owners have in common is the desire to pay the least amount of tax as legally possible. Not all accountants spend as much time on a file maximizing tax deductions.
Some accountants rely solely on the figures provided by the client and focus merely on the tax filing and basic Notice to Reader financial statement preparation. Doing so keeps a file simple and profitable for the preparer, but the client may be missing out on very costly missed claims. Likewise, lack of attention from an accountant can result in overlooked filings and further penalties & interest – GST/HST, WCB, T4s, T5s, etc. A good accountant will verify your filing status on these accounts.
To find a great accountant you should ask successful business people what accountants they know and trust. If they simply like their accountant, don’t take that as a recommendation. They should be able to claim their accountant has a night & day difference vs. their prior accountant. If you are considering that accountant, make sure you check out their website and testimonials. If they are a one off operation, be cautious about their time commitments and availability when you need them.
Keep in mind that accounting designations do not guarantee an accountant’s expertise in taxation. Whether they are a CA, CGA, CMA, CPA, or RPA, don’t assume they are experts in all fields of accounting, just as you wouldn’t assume a lawyer is an expert in all fields of law.
If you would like a free ½ initial consultation to see if our tax expertise are a perfect fit for your business, give us a call at 778-298-2415 to book an appointment.
To view some of our testimonials, click here http://www.completeaccounting.ca/results/testimonials/.
How much RRSP contributions should you make?
The 2012 tax year RRSP deadline is March 1, 2013. Many people automatically assume that they should contribute as much as they can afford or max out their contribution room. Both assumptions can be costly mistakes.
If you simply buy as much RRSPs as you can afford, you run the risk of over contributing and could face significant penalties. In addition, withdrawing over contributed RRSPs is a hassle and cumbersome multistep process.
Using up your entire contribution room just because you can isn’t always the best move either. Depending on your future needs, absorbing RRSP or RIF income down the road can actually cost you higher taxes and induce benefit claw backs, such as the Old Age Security claw back. Moreover, you may be better off delaying your RRSP contribution and deductions until a year with higher marginal tax rates.
A professional accountant specializing in taxation is your best bet for determining your optimum RRSP contribution for a particular tax year. They should consider your current and future income projections and formulate a tax strategy that maximizes your RRSP contributions. A small amount of tax planning can avoid benefit claw backs and make the difference between receiving a 20.06% refund on your contribution vs. a 43.7% refund. The difference between the two applicable marginal tax rates can result in up to a 118% better return on your contribution. The added benefits and peace of mind should be well worth the cost of hiring a professional accountant.