Blog Archives - BMP ACCOUNTING & TAX INC.

Have you filed your WCB return?

1/29/2021

February 28th is the due date for the Workers’ Compensation Board (WCB) annual returns. Your February may be filling up fast with all the paperwork required! Filing your return on time is every employer’s duty to assure that the premiums they are paying are based on current and accurate information. Failing to file your return may result in termination of your coverage.

If this is the first time filing your return, you can expect to have your employees’ information ready including their salaries. If you have any volunteers coming onsite, you will also have to have their information ready and the number of hours they work. You will be required to assess how much their time is worth in dollar signs.

If you are used to filing online using your PIN attached to a letter in the mail by WCB…you will not be receiving your letter this year. You will need to sign up at myWCB and set up your profile.

Do you have more questions regarding WCB returns? Contact Us.

Last Call for 2020 RRSP Contributions

1/29/2021

It’s been a very odd year but we all remember what a last call is…right? All jokes aside, you have until March 1, 2021 to contribute to your RRSPs for it to count for the 2020 tax year.

Why contribute? We are glad you asked! Consider the tax savings. You will not pay any income tax on every dollar you put into your RRSP (up to your maximum – more on this later). If you are a salaried employee this means that it will almost certainly mean a generous tax refund.

While we are planning your contribution, it may be worth your while to talk about the Home Buyers Plan (for first time home buyers) and Lifelong Learning Plan (to finance your education). If you are planning to do either this year and have put some hard-earned cash away for either of those purposes, you could invest it into an RRSP before March 1st, and withdraw the funds when you need the money without any penalties (provided you pay the RRSP loan back before the deadline). This way you could still use your money the way you intended to, but also enjoy a lovely tax savings. That’s what I call a win-win.

If you qualify for the Canada Child Benefit, an RRSP contribution could increase the amount you receive because this amount is calculated on your taxable income and RRSP contributions lower your taxable income.

How much can you contribute? I told you there would be more on this topic. Generally speaking, your RRSP contribution limit for the year is 18% of your earned income you reported in the previous year up to a maximum of $27,230. If you have not contributed before or have not reached your limit in any given year you have earned income, the unused portion of your contribution limit rolls over to the next year. You can find out exactly how much RRSP contribution room you have by consulting your latest notice of assessment or by logging into your CRA account online. If you have any troubles, we can assist you as well.

Invest your tax refund. Tax refunds can be a great financial tool if you use it correctly. Paying down debt may be the first priority, but if you have no debt, consider investing in an RRSP…it will only increase your tax refund for the following year!

Watch out for big refunds every year. This might sound odd…but having a big refund every year means that you are extending an interest-free loan to the government every year. If you are finding yourself with a sizeable refund year after year, talk to us to see if you should not update your tax information with your employer.

Good things come in small packages…but what of small brown envelopes?

1/22/2021

You have filed your taxes and here it is…that brown envelope appears in your mailbox. It’s your notice of assessment. Maybe all is well and your tax return has been accepted exactly how it was filed, all is well and everyone can go on living their lives exactly like before that brown envelope was opened. But what if there is bad news in that brown envelope. What does it mean if CRA has decided to disallow a good chunk of your employment expenses? Why do you owe money back to CRA? What can you do?

It is important to note that it is a taxpayer’s responsibility to ensure that their tax return is accurate and that your records are complete. Ensuring that you keep your receipts and keep accurate and complete travel logs to support your submitted tax return will ensure that your case is easier to defend.

Once the tax return is filed, CRA can modify which expenses are disallowed. This can occur if CRA deemed your records to be incomplete or did not think your numbers stood the test of reasonability.

You might be asking what is a notice of objection…it is a chance for you to challenge CRA’s assessment of your tax situation. We have prepared notice of objections for clients that have received such unpleasant letters. The good news is that you have 90 days to file a notice of objection, with the possibility of extending it to one year after your filing-due date for that year.

It’s also important to consider that CRA is unable to take collection action against you during the period in which you are disputing your tax debt after filing a notice of objection – although interest on your debt is still calculated. If your claim is successful, your interest will be forgiven and all funds paid to CRA in relation to the disputed debt will be reimbursed to you.

To ensure a success, the objection needs to be structured correctly and all claimed backed up by receipts, invoices, logs or other pertinent information. This is why it is important to work with an experienced tax professional when filing Notice of Objections. Our team includes a CRA veteran with 44 years of experience in tax audit. Contact us for more details.

Early Birds Get Their Taxes Back Sooner?

1/14/2021

As we accountants gear up for tax season, we are fast approaching the yearly CRA annual website maintenance. What this means is that some of the services offered online will not be available from 11:00 pm on Friday, January 22, 2020 until 8:30 am on Monday, February 22, 2021 (Eastern Time). These services include:
-EFILE & ReFILE
-Express Notice of Assessment web services

If you are a little behind on filing, you may want to consider bringing us your tax information to file your 2019 (or earlier) tax information to get it all out of the way before we embark in the 2020 tax year.

This also means that if you have to get a head start on the tax year, you can drop off your tax documents starting February 22nd. Being an early bird can provide you with a few perks!

1. You can receive your refund faster!

2.  If you owe money to CRA, you have a few months to come up with a payment plan. Filing close to the deadline can leave you scrambling to come up for the cash necessary to pay the balance owed. If you file early, you have a chance to reduce the interest and penalties on money owed.

3. You can get proactive with your 2021 financial planning.

4.  You will have more time to communicate with your tax advisor! If you are unsure about anything, there will not be a tight deadline looming. Give yourself time to really understand your tax situation.

5. Early filings help prevent identity theft since your return is marked as filed and no one can use your SIN to file a fraudulent return.

6.  Best of all – filing early gives you added peace of mind.

As always, if you have any questions or concerns, contact us. We are always happy to hear from you!

Payroll Tips

1/6/2021

In most cases, payroll is the biggest cost to a company’s overhead. Payroll processing can also be very time consuming and costly to administer. The good news is that there is always room for improvement and with a couple of revisions, you can streamline the process into a well-oiled machine.

1. Keep It Simple: The challenge we encounter most dealing with small businesses is a complex payroll system. Employees are not on the same schedule; salaried employees are paid semi- monthly and hourly employees are paid monthly. Setting a set schedule for everyone takes much of the guess work out of your calculations. Having clear and simple payroll policies will help establish clarity in your organization. Overly complex rules surrounding vacation pay or commission pay can lead to overly complex calculations that also lead you to errors in payroll.

2.  Choosing the Right Software: How are you calculating payroll? An Excel spreadsheet? That is perhaps not the best way to keep track of the employee’s pay and the remittances due to the government. Talk to us about what types of technology might work best for your situation.

3.  Free the Paper: Have you considered to go paperless? Did you know the right software can enable you to email your employee’s paystubs automatically? Forgoing the printing of paystubs can save you time and money spent on ink, paper, envelopes, mailing supplies, and employee time spent on processing the paper paystubs.

4.  Staying Current: Remitting your source deduction payments to the government on time is the biggest favour you can do to yourself. This not only avoids penalties and interest but also a snowballing effect of large unpaid balances.

Staying current also refers to staying up to date on new payroll legislation such as changes to holiday pay rules. Staying up to date on new legislation ensures that you remain compliant, avoiding audits and more penalties.

5.  Keep a Schedule: Are you surprised every time that payroll creeps up on you? Setting a payroll reminder and keeping your employees on a schedule will help reduce expectation gaps and give you more time to consider your task. Nothing spells disaster more than a rushed job.

6.  Seek Professional Assistance: Still have issues? Contact us. We would love to help.