Surviving A Compliance Review With Canada Revenue Agency

By Randall Orser | Personal Income Tax

Survey On Clipboard Shows Very GoodThe dreaded audit has been somewhat replaced by the ‘compliance review’, which is a nicer way of saying we’re coming in to look at your books but won’t probe you as much. As I write this I have had a couple of clients go through a compliance review, both turned out to be nothing. What they are doing with the compliance review, especially for new businesses, is to ensure you’re doing things correctly, and are filing your remittances correct and on time. Canada Revenue Agency (CRA) is trying to ensure all businesses are compliant with their business remittance requirements before it gets too out of hand.

The first thing you’ll get from CRA is either a phone call or letter stating what they are reviewing and when. If it is a phone call, get them to fax you what was discussed in the conversation. I always find it’s best to do this step, as there are no mix-ups as to what was required.

The next thing is to call your bookkeeper or accountant and let them know CRA is doing a review. Follow this up with the letter you receive. I find it best to get the bookkeeper or accountant to deal with CRA in these situations, as they understand what reports CRA will need, and may have better access to the accounting system. Also, the bookkeeper/accountant will only give them what they ask, where you may give them too much information.

The auditor will examine books and records, documents, and information (collectively referred to as records) such as:

  • Information available to the CRA (such as tax returns previously filed, credit bureau searches, or property database information);
  • Your business records (such as ledgers, journals, invoices, receipts, contracts, and bank statements);
  • Your personal records* (such as bank statements, mortgage documents, and credit card statements);
  • The personal or business records of other individuals or entities not being audited (for example, a spouse, family members, corporations, partnerships, or a trust [settlor, beneficiary, and trustee]); and
  • Adjustments made by your bookkeeper or accountant to arrive at income for tax purposes.

*Never give personal records unless absolutely asked, and push not to provide them. CRA will use any monies received in your personal account against you, even if it is a cheque from grandma.

You need to have this entire information ready for the review, and you may have to meet with your bookkeeper/accountant before the audit and go through everything. Don’t leave anything out that CRA has requested, and, of course, don’t give them any more than they ask.

Your best bet for surviving this review is to remain calm, deal with the auditor in a professional manner, and if you feel not being present is best then just have your bookkeeper/accountant meet with the auditor. There is no reason to panic, as this is nothing personal, you have been selected for review either as a random pick or that you are a relatively new business.

Is This Receipt For The Children’s Fitness Or The Arts Credit?

By Randall Orser | Personal Income Tax

healthcare TNThe Children’s Fitness and Arts credits were brought in just a few years ago, and have been very popular with parents of active kids. Any child under 16 years of age qualifies for either of these credits.

What are The Fitness and Children’s Arts Credits?

The children’s arts tax credit and the children’s fitness tax credit allow you to claim a 15% non-refundable tax credit on an amount up to $500 per child per credit on the fees you’ve paid in 2013 to register a child in a prescribed program of eligible activities. This can give you a credit of up to $75 per child per credit.

  • Eligible activities for the children’s arts tax credit include artistic or cultural activities such as art classes, piano lessons, and tutoring, as well as other activities that are intended to improve a child’s dexterity or co-ordination.
  • Eligible activities for the children’s fitness tax credit include strenuous games like hockey or soccer and activities such as golf lessons, horseback riding, sailing, and bowling, as well as others that require a similar level of physical activity.
  • You can claim these credits for your child, as well as for the child of your spouse or common-law partner.
  • The child must have been under 16 years of age (or under 18 years of age if eligible for the disability tax credit) at the beginning of the year in which the eligible expenses were paid.
  • You can claim an additional amount of $500 for each eligible child who qualifies for the disability amount and for whom you paid a minimum of $100 in registration or membership fees.
  • Two parents can claim eligible fees for the same child, as long as they do not claim the same fees and the combined amount is not more than $500.

Can an expense be used for one or the other credit? That’s a tough one. Canada Revenue Agency states ‘Eligible expenses do not include amounts that can be claimed as the federal children’s fitness amount’ under the Children’s Art’s Credit, and vice versa under the Fitness Credit. However, I’ve never had them reject using Dance under the Art’s Credit rather than the Fitness Credit as long as the Fitness credit is already used up for that child.

For the fitness credit, the expense must require significant physical activity. Physical activity includes strenuous games like hockey or soccer, activities such as golf lessons, horseback riding, sailing and bowling as well as others that require a similar level of physical activity.

For the arts credit, it must help in the development of creative skills or expertise in an artistic or cultural activity, focus on wilderness or natural environment, develop and use of intellectual skills, interpersonal skills development, or provide enrichment or tutoring in academic subjects. This would include literary arts, visual arts, performing arts, music, media, languages, customs, and heritage.

As you can see the two credits are quite different. The only expense that may be split between the two is dance. Dance is a very physical activity, though it is more in the performing arts/music arena. If the dance is more to help with physical strength, endurance, or coordination then it could be considered for the fitness credit.

For the fitness and arts credits, it’s best to ensure that what you are claiming for them is actually for that credit. Look at the expense and see how it fits the criteria for that credit.

Is Now a Good Time to Be Thinking about Starting a Business?

By Randall Orser | Small Business

Businessman falling TNIs now a good time to be thinking about starting a business? The answer depends on several different factors. The most important factor that one needs to consider when answering this question is whether or not you have the venture capital to do so. When the economy is in the throes of a downturn, finding the money to start up a new business can be difficult. Therefore, if you have a source of venture capital already in place, you are one leg up and ready to start a business of your own.

What Type of Startup Business Has a Chance?

While the economy might not be that great at the moment, there are several different types of businesses that are continuing to grow and find success. The truth of the matter is that people cannot be expected to give up everything. There are items that people need to survive, items that businesses need to grow, and items that people simply want.

Therefore, certain businesses are going to thrive while others are going to struggle. Plus, certain members of society can still afford to continue living at the same level that they have been living at. Consequently, these individuals can still afford to purchase whatever they want to have.

In general, businesses that can provide goods and services for reasonable prices and fees are going to fare better than their counterparts that are charging excessive rates and prices. In general, fast food restaurants and discount stores are hanging onto a fair share of the market. Additionally, businesses that provide a necessary service or essential commodities at reasonable rates are also surviving. Plus, businesses that cater to current trends in technology, learning, and social networking are also in a good place to continue thriving.

Tips on Becoming a Successful Recession Startup Business

In order to make a go at a startup business and succeed, the stage has to be set just so. In essence, all of your ducks need to be in a row and it’s best to get them there before you begin. Follow these simple tips to get started on your new business venture with a positive step in the right direction.

Venture Capital Tip

Make sure that you have the access to a source of venture capital. If you are one of the lucky ones who can still get a loan at an affordable rate, then that should be sufficient. If you aren’t going to be able to take out a loan, then make sure that you have the cash that you will need to function as a business for at least one full year and ideally two full years. Don’t rely on potential sales or business income. If you don’t have it, you can’t count it.

Research Tip

Do the research before you select the type of business venture or the location. If the area is already inundated with similar enterprises, you’re cutting off your foot before it even takes that first step. Check out how many others are already selling the products or service that you want to sell in a particular locale. Check out their advertising scenario. Assess their level of success by watching their clientele traffic for a week or so. If need be, switch the location that you are considering or tweak your business idea to an area for which a true need exists.

Beginning Business in a Small Way

Don’t over invest your money during the beginning stages. Start out small and work your way up. There’s plenty of time to amp it up once you get started. However, if you need to shift gears and you’ve already dumped all of your cash into the project, what are you going to use to adjust your plan? Exercise a bit of frugality and shop for your supplies and needs wisely. In fact, make a budget and stick to it so that you don’t run out of business capital too quickly.

Are you a first time donor?

By Randall Orser | Personal Income Tax

Glass bank for tips with money isolated on white TNFor 2013 and beyond, the Canadian government in order to encourage more people to donate to charity has created the First-Time Donor’s Super Credit. For first-time donors, the government proposes to introduce a temporary supplement to the existing non-refundable tax credit for charitable donations by individuals. The new credit can be claimed once from the 2013 to 2017 taxation years.

Starting in the 2013 taxation year, the government introduced a temporary non-refundable First-Time Donor’s Super Credit (FDSC) that will supplement the non-refundable charitable donations tax credit (CDTC) for individuals. This new credit effectively adds 25% to the rates used in the calculation of the CDTC for up to $1,000 of monetary donations. As a result, a first-time donor will be allowed a 40% federal credit for donations of $200 or less, and a 54% federal credit for the portion of donations over $200 but not exceeding $1,000.

For the 2013 taxation year, an individual will be considered a first-time donor if neither the individual nor the individual’s spouse or common-law partner has claimed the CDTC in any of the five preceding tax years.

Currently, the non-refundable charitable donations tax credit (CDTC) is calculated as the total of:

  • The lowest income tax rate (15% for 2013) multiplied by the first $200 of charitable donations claimed by an individual; and
  • The highest income tax rate (29% for 2013) multiplied by the portion of the donations claimed by the individual that exceeds $200.

As a first-time donor, you and your spouse or common-law partner in a particular taxation year may share the FDSC, along with the corresponding CDTC. However, the total amount of donations that may be claimed for the FDSC by both individuals cannot exceed $1,000. When it cannot be agreed on the amount of the credit that each of you will claim, the CRA may apportion the credit.

Only donations of money that are made after March 20, 2013 will qualify for the FDSC. For taxation years from 2013 to 2017, a new line will be added to Schedule 9, Donations and Gifts to identify the eligible portion of the charitable donations that you have claimed that are donations of money.

First $200 of charitable donations claimed: $200 x 15% = $30
Charitable donations claimed in excess of $200: $300 x 29% = $87
First-Time Donor’s Super Credit: $500 x 25% = $125
Total FDSC and CDTC: $242



Example 1: An eligible first-time donor claims $500 of charitable donations in 2013. All of the donations are donations of money. The first-time donor’s FDSC and CDTC would be calculated as follows:

First $200 of charitable donations claimed: $200 x 15% = $30
Charitable donations claimed in excess of $200: $500 x 29% = $145
First-Time Donor’s Super Credit: $300 x 25% = $75
Total FDSC and CDTC: $250

Example 2: An eligible first-time donor claims $700 of charitable donations in 2013. Only $300 of the donations is donations of money. The first-time donor’s FDSC and CDTC would be calculated as follows:

The First-Time Donor’s Super Credit (FDSC) is a great way for those that thinking of giving to charity to get a little more back on their taxes.

Collect Those Overdue Payments, Without Hiring A Collection Agency

By Randall Orser | Small Business

Debt concept TNCollecting past-due accounts can be a hassle for any small business owner. The process can spoil customer relations and waste valuable time. But there are ways to collect payments without the headache of hiring a collections agency or going to small claims court.

Try these four steps to help ease the woes of collections:

Credit Cards

Customers who know they can pay in installments may be more likely to do business with you. Overdue payment issues land between the customer and the credit card company—the business owner is removed from the equation. There are fees for accepting credit cards, so do your research. American Express (Amex) tends to be the most expensive; however, if you are dealing with wealthier clients you may want to accept Amex. Look at your industry association, Chamber of Commerce, Board of Trade, Canadian Federation of Independent Business, etc. as you get a discount on merchant fees through these associations.

Advance Payment

Retainers followed by additional paymentsas the job proceeds increase chances of being paid the full amount. Collect one-third up front; one-third midway through the service; and a final payment upon completion. Work out the percentage that works best for you and the client. You may want to get at least materials costs up front so you’re not out that amount. If your business is mostly labour, you may want to get a good portion to cover your labour costs. 

Transfer Collections Duties

Hire a part-time employee to handle your past due accounts. Your staffer can closely monitor accounts, which could shorten collections times. This strategy also alleviates tension between the business owner and the late-paying customers. Sending statements is also a good idea; there are business people who wait for a statement before paying anything. Plus, there’s no excuse for a missed invoice as they got a statement.


Prepare basic contracts in advance and ask customers to sign off on a payment schedule and a specific work plan to reduce the chance of misunderstandings over the service and the payment. Always have a scope of work when working on a project basis, this way the customer can’t complain when you say ‘sorry that’s extra’. Construction is great at this, and anything not in the scope is a ‘change order’, and an extra cost that’s invoiced separately. It even pays to have a ‘scope of work’ for any business, especially a service business. Let the customer know what they’re getting for the price they’re paying.

While the above tips won’t stop all bad debts, they can alleviate the headaches of trying to collect monies owed to your business. Sadly, bad debts are just a part of doing business, so do as much as you can to nip them in the bud.

How do I change my return?

By Randall Orser | Personal Income Tax

Tax word cloud TNThere does come a time when you may have to change a tax return you’ve already filed. You may have forgotten a slip, donation, and medical receipts; or, perhaps, a slip you filed was amended, and now you have a new slip. The question is what do you do when something changes?

The first thing NOT to do is file another return. This is the surest way to confuse Canada Revenue Agency (CRA), and may cause you to be audited. Wait for your notice of assessment before asking for changes to your return. You can ask for a change to a return for a tax year ending in any of the 10 previous calendar years. This year (2014), you can only ask for changes for tax year 2004 or later.

If you have used a tax preparer to file your tax return, then the best thing is to let them know what you have forgotten, and whether or not it’s worth doing the adjustment. Your tax preparer will charge you for doing any adjustments to your tax return. Sometimes for small donations, or medical receipts, the adjustment is not worth the cost of the additional charge. If you find that your tax preparer forgot to file something with your return, and you did give them the slip or receipt, they should be willing to do the adjustment for free.

You can adjust your return online using My Account, and click on ‘Change My Return’ (on the left-hand side menu under ‘Quick Links’. You must have setup My Account prior to doing this. Using the drop-down menu choose the year you wish to adjust. If you know the line you wish to adjust use the search feature. Check your tax return to see where you are adjusting. For example, if you received another T4, you want to adjust Line 101 Employment Income; plus there will be other lines to adjust for the CPP, EI and Tax that are on the T4.

You can do an adjustment the old-fashioned way, and mail (or fax) your adjustment to CRA; you would send the adjustment to your tax centre. You can use either form T1ADJ—T1 Adjustment Request, or a signed letter giving details of your request (including the years of the returns to be changed), your social insurance number, your address, and a telephone number where we can call you during the day. You must also include all supporting documents for the change, including those for the original assessment (unless you paper filed in which case CRA already has them).

Send your current year return separately from any request to change a return for another year. Don’t send them all in the same envelope or fax. If you drop them off at your local tax centre, then put each year in a separate envelope.

Processing times for online, is usually within 2 weeks, and by mail (or fax), usually within 8 weeks. It may take longer if: your request is sent in late summer or fall, your request needs more review, or CRA has to contact you or your authorized representative for more information or documentation.

When CRA’s review is done they will send you a notice of reassessment showing changes to your return or a letter explaining why CRA did not make the changes you asked for or if no changes were needed.

Remember when you change your return; it may not be in your favour, such as with a missed T4. In such a case, you may end up owing CRA and may be charged a penalty and interest for the amount owing. Sadly, most times you end up getting a Notice of (RE)Assessment in the fall, if you haven’t already adjusted the tax return for the missing T4.

Adjusting your tax return can be a daunting task, so it may be best to get the person who did the return to adjust it, or talk to a tax preparer or CRA about what you need to adjust, and why. In the end, it may not be worth the additional cost to do the adjustment.

Cash Flow Management for Small Business Owners

By Randall Orser | Small Business

Dollar Coin Shows Currency Symbol And Cash TNCash flow is the bane of small business owners. Even if you are working on a large project that takes several weeks, you still have to pay the rent, utility bills, supplier invoices, loan repayments, and employee wages while you are waiting for the big payout of the project. Managing your cash flow is not always easy, especially when some clients extend your terms of payment and delay paying your invoices on time. Providing credit terms over several months can make your customers happy, but can make it tough for your business to pay the regular bills.

You can manage your small business cash flow by various methods. You can encourage your customers to pay invoices sooner, you can invoice in stages for the project, and you can factor your invoices to receive the payment from a credit agency before the customer actually pays the invoice. Some businesses will find a mixture of methods helps to balance the ledger book every month.

Encourage Customers to Pay Invoices Sooner

You can encourage your customers to pay invoices quickly in several ways. Some small businesses only work with cash or immediate payments. Customers pay cash on delivery or via credit cards, or your business does not deliver the product. While this is suitable for some businesses, such as those who use web-based ordering systems, this is less suitable for some businesses.

If you cannot ensure your customers pay for the product or service before delivery, you need to encourage your customers pay the invoice as soon as possible. The longer you extend credit to your customers, the longer you have to balance your cash flow without the income. Some small businesses offer a discount to customers who pay up front, or within a short time, such as 7 days of receiving the invoice. While this is a good way to encourage customers to pay on time, it can be costly to your business, depending on the discount you offer.

Invest in good follow up debt collecting practices. Sending out reminder invoices every week with coloured stickers encouraging fast payment of the invoice can encourage customers to pay the invoice sooner. Follow up with personal phone calls when customers have extended the payment of the invoice outside the terms of payment.

Reduce your terms of payment from 30 days to 7 days, if possible. If your customers do not pay on time according to your terms of payment, you may be able to add a surcharge to the invoice. This is a better cash flow solution than offering a discount for early payment, as the business gains more income when the customers pay late, and does not lose money for encouraging customers to pay on time.

Invoice in Stages

For larger projects over several weeks, set up a contract with the customer that allows you to invoice the client periodically over the course of the project when your business meets the key stages. Agree on what the key stages of the project will be with the customer, and decide on deadlines for each stage of the project. This will let the customer know when to expect your periodic invoice, and you will know when to expect the money from the customer for your cash flow balances.

Factor Your Invoices

Factoring is a relatively new form of credit that some credit companies are offering small business owners. Unlike bank loans with set repayments, factoring offers small business owners much more flexibility. Generally, you will be able to borrow up to 90 per cent of the invoices you have sent to your customers at any one time.

You borrow the cash via a draw down account and when the customer pays the invoice directly to the factoring company, you receive the rest of the invoice amount minus the factoring fee. The fee is usually smaller than interest payments from a bank, and the factoring company can help your business to follow up on the outstanding customer debts, which could save your business from the costs associated with debt collecting practices.

Managing your cash flow is managing the life blood of your small business. Without cash flow, you cannot purchase necessary supplies, pay your bills, or pay employee wages when you need to. Manage the cash flow of your small business by encouraging fast customer payments of invoices, invoicing in stages, or factoring your invoices.

Is a Registered Education Savings Plan (RESP) worth It?

By Randall Orser | Personal Income Tax

Savings Calculator Shows Wealth, Investment In Capital TNYou may already know what is an RESP; however, here’s some information just in case you aren’t sure. A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter). Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries.

An RESP is a great way for you to save for your children’s education, much like you’re saving for your retirement with an RRSP. Look at what you can afford to put away, and do a monthly contribution so it’s easier on the pocketbook. An RESP is also a great way for the grandparents or aunts/uncles to contribute, just remember that you can only contribute up to a lifetime maximum of $50,000 per child.

Rather than all those toys, and other things that kids just grow out of, this is a great present (the kid may not realize it now though) for when the child is grown and off to post-secondary education. You can even show the child how the fund is growing, and maybe have them contribute when they get jobs.

The advantage of an RESP is that the withdrawals are taxable to the beneficiary. The income earned is paid as educational assistance payments (EAPs). Beneficiaries include the EAPs in their income for the year in which they receive them. However, they do not have to include the contributions they receive in their income. The student will get a T4A with the EAPs in Box 042.

An educational assistance payment (EAP) is the amount paid to a beneficiary (a student) from an RESP to help finance the cost of post-secondary education. An EAP consists of the Canada Education Savings Grant, the Canada Learning Bond, amounts paid under a Provincial Education Savings Programs and the earnings on the money saved in the RESP.

Another great thing about RESPs is the government gives you money in the form of grants. These grants can be the Canada Education Savings Grant (CESG), Canada Learning Bond (CLB), or any designated provincial education savings program. If the government is giving out money you may as well take some, and help your child out at the same time.

Canada Education Savings Grant (CESG)

Employment and Social Development Canada (ESDC) provides an incentive for parents, family and friends to save for your child’s post-secondary education by paying a grant based on the amount contributed to an RESP for the child. The CESG money will be deposited directly into the child’s RESP.

No matter what your family income is, ESDC pays a basic CESG of 20% of annual contributions you make to all eligible RESPs for a qualifying beneficiary to a maximum CESG of $500 in respect of each beneficiary ($1,000 in CESG if there is unused grant room from a previous year), and a lifetime limit of $7,200.

Canada Learning Bond (CLB)

Employment and Social Development Canada (ESDC) also provides an additional incentive of up to $2,000 to help modest-income families start saving early for their child’s education after high school (post-secondary education).

For families entitled to the national child benefit supplement (NCBS) for their child, the CLB will provide an initial $500 to children born on or after January 1, 2004. To help cover the cost of opening an RESP for the child, ESDC will pay an extra $25 with the first $500 bond. Thereafter, the CLB will also pay an additional $100 annually for up to 15 years for each year the family is entitled to the NCBS for the child.

Certain provinces encourage families to plan and save for their children’s post-secondary education by offering incentives to open an RESP. Currently, only Alberta, Quebec, and Saskatchewan offer such incentives.

Let’s face it, and education is somewhat pricey, and will probably only go higher. We’re better off than some counties as our post-secondary education system is highly subsidized. That said, it doesn’t hurt to start early in a child’s life to start saving for their education, and get other family members involved. Make it fun and let the child know that you’re thinking of them by saving for their future.

Five to Ten a Day for Better Health (of Your Business)

By Randall Orser | Small Business

businessman shows success of business TN

We have been inundated with advice to eat well for our health’s sake. But, what about five to ten tips to better health of our business? Shouldn’t that be as important to the business owner?

Five to ten tips to follow a day can reduce the risk of failure and ensure your business enjoys a long and healthy life!

Five Tips to Overall Health:

Prioritize and get things done.

When prioritizing, keep customers forefront (and suppliers, inventory, and staff). Without customers, where would you be? Complete tasks. Follow through. Finish paperwork.

Plan ahead (but be flexible) – Get Organized.

Keep your eye on the road ahead. Ensure that you (and your staff) focus on the business plan, the marketing plan, and your original vision. Ensure that marketing campaigns are done ahead of time (ideally, a year in advance). Budgets and buying plans should be completed six months ahead, as well as any open-to-buy for product for promotional sales. Staff schedules and training should be well organized in order to coincide with seasonal upswings.

Customers and Customer Service – It’s always about the customers!

Every business owner should prioritize any task that involves customer satisfaction. If you tell a customer that the product will arrive by the end of the week, then ensure that your promise is kept. If you tell a customer that you will call them, then ensure that you do. Broken promises do not impress customers. Always under-promise and over-deliver!

Nurture all relationships including staff, suppliers, those in the business community and in the media.  

Reward your staff, motivate your staff and keep them in the loop. Join professional associations.   Expand your communication channels. Get into the habit of mailing thank you notes to customers, staff, suppliers and those who have benefited your business. Pick up the telephone and have a one on one conversation. Stay in touch.

Core competencies – What do you do best?

To thrive in the marketplace, a business must excel in at least one of the following: product offering, customer service, promotional strategies (branding), price or location.

Reminders to not only keep doing what you do best, but initiatives to keep improving. Never lose sight of what distinguishes your business from the rest. Learn to identify your strengths and build on them.

Five More Tips to Overall Health:

Look after the details – it’s always about the small details.

Is the exterior fresh and clean? Does a brightly painted door welcome your customers? Is there a bench, an attractive door wreath, or an eye-catching window display that attracts new customers? Do you have an area for weary customers? Does your children’s store have a toy area for children? Do you supply customers with coupons if you have inconvenienced them? Do you greet your customers by name? Do you capture their names on your mailing list?

Look after the expenses – Pay your bills on time.

Send out invoices and request payment in a timely fashion. Eliminate unnecessary perks; eliminate waste; eliminate frills that are not important to the customer. Look for less expensive ways to do everything. If not sure where to begin…call your accountant. Better yet, read your expense sheet and cut costs by ten percent. Pay your bills on time. If possible, pay within ten days and get a two percent reduction for early payment.

Grow (innovate)

Successful entrepreneurs are never satisfied with the status quo. They understand that to increase their share in the marketplace the business must grow: better product; newer technology; more effective website; more informed and knowledgeable staff; timelier shipping: better distribution channels; and so on.

Constantly change – re-invent yourself

A healthy business realizes that change is a constant; change will keep customers coming back. Customers will return to see new product displays, new demonstrations, and new content. Customers will brand your business – as a leader. Keep your customers delighted, inspired and motivated.

Old-fashioned principles are still true

Keep your business honest, reliable and trustworthy. Stand behind your policies – with no exceptions. Advocate privacy and honesty on your website and in print. Ensure that all practices value those principles. When a business values old-fashioned principles, customers will learn to trust that business and sales will follow. (There are some values that never grow old.)

You will know that your business is strong and healthy when you have difficulty prioritizing the above tips. Is change more important than principles? Are relationships more important than the bottom line?   A business owner that puts the customer (and customer service) to the forefront understands that the suppliers, the product, the service and the staff make up the equation.

The most successful businesses thrive because their owners understand that all aspects of business must be healthy; one area cannot stagnate or be left unattended for the sake of another area. Because a successful business is a component of all best practices – each integrated to make the whole.

A healthy business will enjoy a long life…so integrate five to ten a day to increase your chances to survive. The life of your business might depend on it.

What is the Disability Supports Deduction (Attendant Care Expenses)?

By Randall Orser | Personal Income Tax

glyphicon_wheelchair--Tidbits 2014-09-03 TN‘One in Every 10 People You See Today Will Likely Have Some Sort of Disability.’ That’s according to The Canadian Foundation for Physically Disabled Persons. Fortunately, there is tax relief for those disabled who have continued to work or run a business, do grant research or similar work, or attend a credible educational program. It’s called the Disability Supports Deduction.

If you have impairment in physical or mental functions, you can claim a disability supports deduction if you paid expenses that no one has claimed as medical expenses, and you paid them so you could:

  • Be employed or carry on a business (either alone or as an active partner);
  • Do research or similar work for which you received a grant; or
  • Attend a designated educational institution or a secondary school where you were enrolled in an educational program.

You cannot claim amounts that were reimbursed by a non-taxable payment such as insurance. Expenses must be claimed in the same year they were paid.

You may need to have a T2201 Disability Tax Credit Certificate filed with Canada Revenue Agency (CRA), in order to claim any disability deductions. You can also file and then when the T2201 is approved, you can file adjustments for which years it applies.

What Expenses Are Eligible?

  • Attendant care services (except those services provided by your spouse or common-law partner, or to someone under 18 years of age)
  • Bliss symbol boards
  • Braille note-taker devices
  • Braille printers, synthetic speech systems, large print-on-screen devices
  • Deaf-blind intervening services
  • Devices or software
  • Electronic speech synthesizers
  • Job coaching services (other than job placement or career counseling services)
  • Note-taking services
  • Optical scanners
  • Page turner devices
  • Reading services
  • Real-time captioning or sign-language interpretation services
  • Talking textbooks
  • Teletypewriters
  • Tutoring services
  • Voice recognition software

When it comes to tax time, you can use form T929 Disability Supports Deduction. Do not attach this form or your receipts to your income tax and benefit return, but keep them in case CRA asks to see them at a later date. Expenses must be claimed in the same year they are paid. Unused disability support amounts cannot be applied to another year.

When filling out the T929 you will need to list the devices or services you are claiming in the first column. For each service you list, give the name and address of the organization or the name, address, and social insurance number of the individual that provided the service. If you use this form, just attach the receipts to it, and file with your income tax return.

For the purposes of this deduction your earned income should consist of at least one of these:

  • Employment income (including security options and other employment benefits);
  • Net self-employment income, either alone or as an active partner (not including losses);
  • The taxable part of scholarships, bursaries, fellowships, and similar awards;
  • Net research grants;
  • Any earnings supplement received under a project sponsored by a government in Canada to encourage employment; and
  • Any financial support received under a project sponsored under Part II of the Employment Insurance Act, or any similar program.

Some disability supports expenses can also be claimed as medical expenses. The person with the impairment in physical or mental functions can claim these expenses on either line 215 or line 330, or split the claim between these two lines as long as the total of the amounts claimed is not more than the total expense.

I would use the disability support deduction over medical expenses, as the deduction is a direct write-off from your income rather than just a tax credit (with a limit) like medical expenses.

The Disability Support Deduction can help the disabled person relieve their tax burden, as well as the financial burden of their disability.

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