Blog http://www.melaniegesy.ca/ en-us Mon, 25 Feb 2019 00:00:00 MSTimages/header.jpghttp://www.melaniegesy.ca/ Filing Taxes for the Deceased http://www.melaniegesy.ca/Blog.asp?id=47 Mon, 25 Feb 2019 00:00:00 MST

 

When grieving for a loved one the last thing on your mind is their tedious tax obligations. Here are some important steps to help you through!

 

Decide on an Executor

An executor (Personal Representative) is someone who is responsible to gather information about property, deal with debt the deceased may have, and follow instructions in the deceased will. One of the executor's responsibilities is to locate the deceased previous seven years income tax returns and provide the copies to a lawyer or accountant. If not done, the executor could be personally liable for any tax penalties for any tax dates that are missed. If nobody wants step forward to become the executor, the court will appoint an administrator to manage the deceased's estate. This person could be a spouse, common-law partner, or the deceased next of kin. 

 

Have you Notified the Government?

Whoever the executor is must contact the Canada Revenue Agency (CRA) as well as Service Canada to provide a death certificate to both. This is a very important step so any government benefits or grants can be stopped immediately. You can call the CRA at 1-800-959-8281 or complete this form and send it to a tax service office to get more. 

 

Types of Returns

There are 3 different returns that may need to be prepared, depending on the types of assets in the estate. Please consult an accountant to determine which of these returns are required.

  • Final personal tax return (mandatory) - same as the regular personal tax return to report all income up to the date of death.
  • Rights and things return (optional) - same as the regular personal tax return to report certain income earned from the date of death up to December 31 of that same year.
  • Estate Tax Return (T3) (depends on the assets in the estate) - special type of return to report income earned by the deceased's estate after death.

 

Time to File

The executor must have a record of the deceased's income from the beginning of the year they pass away up to the exact date of death. Finding this information can be tricky, the executor may have to contact employers and other financial institutions. Any other tax documents like receipts must also be included.

  • If the deceased passed away between January 1st and October 31st the filing is due by April 30th of the following year.
  • If the deceased passed away between November 1st and December 31st the filing is due six months after the date of death.

 

Clearance Certificate

A clearance certificate is provided from the CRA, it validates that all debts of the deceased to the government have been completely settled or a security payment has been made. This certificate lets the legal representative (the executor) distribute assets without any risk of being personally liable for anything the deceased owes to the CRA. The clearance certificate can be requested ahead of time, but will most likely not be signed off until all tax fillings are complete.

 

We know going through the grieving process can be rough. Call 780-995-5236 - we are here to help!

 

 

 

Sources:

http://www.afsa.ca/Executors_414499.html#f175760

https://www.hrblock.ca/how-to-file-taxes-for-a-deceased-person/

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4111/canada-revenue-agency-what-following-a-death.html#P12_526

 

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2019 Tax Changes Canadians Should Know http://www.melaniegesy.ca/Blog.asp?id=45 Fri, 11 Jan 2019 00:00:00 MST

With a new year often brings new tax rules and regulations. Here are a few new changes that you may want to know about.

EI Premium Rate Lowered

Thanks to strong employment numbers there's less of a demand for EI (Employment Insurance). EI rates that employees pay are being reduced by four cents per a hundred dollars of insurable earnings, in Quebec the rates are being dropped by five cents.  The amount that employers pay are also being reduced. 

 

TFSA Limit Increased

Good news for those with a Tax-Free Savings Account! The annual contribution limit for 2019 has been increased from $5,500 to $6,000. A TFSA is a savings account that allows your money to grow tax-free and unlike a RRSP (Registered Retirement Savings Plan) you don't have to pay income tax when you make a withdrawal.

 

New Tax Avoidance Program

VDP (Voluntary Disclosure Program) is a program meant to encourage Canadians to come forward if they lied or didn't completely tell the truth on any of their tax filings. A new change to VDP is that if you purposely avoid any of your tax obligations you can now apply for a smaller penalty, before you could apply and if you were accepted you would be liable for any taxes you owe and any interest that may have accumulated. 

 

Do you have a Service Animal?

Service animals are now needed to be claimed as a medical expense but only if the animal was acquired after 2017. The medical expense tax credit has been expanded meaning you are now able to claim expenses such as training for your service animal as well as any expenses to take care of the animal like food. 

 

Working Income Tax Benefit

The Working Income Tax Benefit was created to encourage low-income individuals and families to participate in the workforce, by working they would be able to receive a refundable tax credit. The benefit is now known as the Canada Workers Benefit.  Maximum amounts families and individuals are able to receive have been increased from $1,059 to $1,355 for single individuals and from $1,922 to $2,335 for families. The CRA (Canadian Revenue Agency) will automatically add the benefit to your tax return if you are deemed eligible.

 

Melanie Gesy Professional Corp. is here to help! Call 780-995-5236 today. 

 

Sources used:

https://www.greedyrates.ca/blog/tax-changes-canadians-need-to-know-about/

https://globalnews.ca/news/4804039/tax-changes-canada-cpp-ei-small-business/

 

 

 

 

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Reasons Why you Need an Accountant http://www.melaniegesy.ca/Blog.asp?id=44 Wed, 9 Jan 2019 00:00:00 MST

 

Are you contemplating hiring a Chartered Professional Accountant for personal, business or for a non-profit organization? Here are a few reasons why it's totally worth it! 

 

Save Yourself Some Cash

Have you refrained from hiring an accountant because you think it will cost you an arm and a leg? Think again! An accountant's job is to go through your financial records, when doing so they can look for flaws and create a plan of action for you to have a better financial well-being, meaning they will save you money. Accountants can also make sure that you're paying the least amount of taxes while also staying within the law, and even can offer you advice about your assets and property. Remember quantity doesn't always mean quality, just because you find an accountant who is cheap doesn't mean they are going to get the job done correctly! 

 

Save you Time (and your Sanity)

If you really think about all the money you're saving when you don't hire a professional accountant it doesn't cover all the time you're wasting trying to figure out confusing and annoying paperwork. Because you hired an accountant to watch over your expenses, payroll, insurance, leases and everything else on your plate, you now have tons of time on your hands! You can now focus on your business or your family instead of worrying about your finances. 

 

Handle Annoying Tax Matters

Taxes are complicated. In an event of an audit, an accountant can take the burden off of your shoulders and make the whole experience less painful. 

 

Keep you Updated on Tax Changes

Since the government is often changing and updating certain laws, as a regular person it's hard to keep up. Your accountant will stay updated with any changes and will know how they will affect you and can make recommendations on how to proceed.  

 

Was Math your Worst Subject? 

For many people they rather get a root canal then have to sit down and figure out all the math that goes with their taxes. Accountants love math, so they are naturally better at understanding taxes than math-hating individuals. Chartered  Professional Accountants are more likely to be accurate than somebody who doesn't fully understand how the math behind taxes works. 

 

Keep you Out of Trouble

You accountant will keep you out of trouble when it comes to employee compensation, the Canada Revenue Agency (CRA) needing more paperwork, even issues with your payroll, and anything else that could go wrong when it comes to your business or personal taxes. They will monitor your reports and often will receive notices of an issue and handle the situation quickly even before you realize there was a potential problem. 

 

Melanie Gesy Professional Corp. is here to help! Call 780-995-5236 today.

 

 

 

 

 

 

 

 

 

 

 

 

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