October 25, 2021,

Dear Clients & Friends,

We hope everyone had an enjoyable and safe summer.  As we head into the colder months and year end, I wanted to share some recent developments in personal and business taxes including some year end planning strategies.  In this edition, I will also be looking at some of the changes to the Covid-19 relief benefits and those that are coming to an end very soon.

Here are some other items included in this newsletter:

1. Covid-19 Government Program Updates
2. Ontario Business Registry
3. Year End Tax Planning
4. Insurance & Estate Planning
5. Advisory, Tax Planning and Cash Flow Planning
6. Website, Social Media Updates & Google Reviews

As there is a lot of material covered in this newsletter, please contact me if you have any questions.   Have a great week and looking forward to connecting with you very soon!

1. Covid-19 Government Program Updates:

All archives of the Covid-19 programs from our past newsletters are available on our website.  Please click Herefor the archives:  https://arjcpa.ca/newsletter/

I have listed a summary of the programs below.  The details are also available at https://www.canada.ca/en/department-finance/economic-response-plan.html#businesses

1.Canada Recovery Hiring Program (CRHP): New Hiring Subsidy – extended to May 22, 2022, for eligible employers with current revenue losses above 10%.  There is also an increase to the subsidy rate to 50% (from 20%), beginning October 24, 2021

2.Canada Emergency Wage Subsidy & Canada Emergency Rent Subsidy – expire on October 23, 2021.  The government is proposing targeted support for eligible hard-hit employers until March 13, 2022.  This support would be available through two new streams:

a.The Tourism and Hospitality Recovery Program, which would provide support to businesses like hotels, tour operators, travel agencies and restaurants, with a subsidy rate of up to 75%.

b.The Hardest-Hit Business Recovery Program, which would support other hard-hit businesses, with a subsidy rate of up to 50%.  From March 13, 2022, to May 7, 2022, the subsidy rates will decrease by half. Below is a summary of the subsidy calculation from CRA:

 

3.Finance also proposed a new Canada Worker Lockdown Benefit that will provide $300 a week in income support to eligible workers.  The benefit would be available to workers who are ineligible for Employment Insurance (EI), and those who are eligible for EI, as long as they are not paid benefits through EI for the same period

The new benefit attributes are as follows:

• • $300 a week.
  • Strictly available to workers whose work interruption is a direct result of a government-imposed public health lockdown.
  • Available until May 7, 2022, with retroactive application to October 24, 2021, should the situation warrant it.
  • Accessible for the entire duration of a government-imposed public health lockdown (up until May 7, 2022).
  • Available to workers who are ineligible for Employment Insurance (EI) and those who are eligible for EI, as long as they are not paid benefits through EI for the same period.

4.Personal Income Tax Payment Deferral

CRA has allowed for the deferral of income tax owing until April 30th, 2022, if the following conditions are met:

• • You collected at least one of the following Covid-19 benefits:  CERB, CRB, CESB, CRCB, CRSB, EI or a provincial/territorial benefits
  • Your 2020 taxable income was $75,000 or less
  • You meet the tax filing deadline of April 30th, 2021

Please contact us if you require assistance with the application process.   Additional information for all of the programs is available at:  https://www.canada.ca/en/department-finance/economic-response-plan.html#businesses

1.  Ontario Business Registry

On Oct. 19, 2021, the provincial government introduced the new Ontario Business Registry, an online platform to simplify corporate registration information searches and filings. The registry also allows the public to search and obtain certain information about all Ontario corporations, including a corporation’s registered or head office. This information has always been publicly available but was previously more difficult to obtain.    If you have registered your personal address and would like to change it to a business address, please contact the office and we will work with the ministry to facilitate the change.

Details are available at:   https://www.ontario.ca/page/ontario-business-registry

1. Year End Tax Planning

We are available throughout the year to assist with your planning requirements.  Here are some tips to consider for businesses and individuals as we approach year end.

Businesses:

1. As a business owner, now is a good time to start thinking about paying yourself either a dividend or salary to optimize your tax position before December 31.
2. Business owners should also consider updating their minute books.  This can be completed by a business or corporate lawyer.   It is important to update the minute books on an annual basis with resolutions, changes that have occurred during the year and the reporting of bonuses and dividends at the end of the fiscal year.  If you require a corporate lawyer referral to update your minute books, please contact me and I will provide you with a list of lawyers we work with.
3. Automate your accounting processes.    If you would like to use a cloud-based accounting system, automate your receipt processes, or move to an accounting software, we can assist with the setup process.
4. Corporate tax and HST installments should be paid up before your fiscal year end.
5. Ensure that any refunds are not held back by filing your HST and corporate taxes on time.

Individuals:

1. You may have received installment notices if you were in a payable situation.  Please contact the office if you have any questions on how to make the installments or if you are required to make tax installments.
2. Medical expense credit – as part of your medical benefits plan, there are certain medical expenses that have limited coverage or maximums.   Any out-of-pocket expenses can be claimed on your personal tax return.  Premiums paid on your benefits can also be used as part of the medical tax credit
3. This is a good time to consider topping up on your RRSPs and TFSAs.   You may want to also look at where you want to put any extra savings.  Perhaps start clearing credit cards, or putting lump sums on mortgages.  Refinancing your mortgage is another option with record low rates out there.   I can connect you with an investment advisor for your RRSPs and TFSAs and a mortgage broker or a banker to help facilitate a new mortgage or a refinance of an existing mortgage.
4. Ensure that any personal tax refunds or government benefits are not held back by filing your personal taxes on time.
5. Tax Loss selling:  If you have realized capital gains during the year, and your portfolio includes securities with unrealized losses, you may want to consider selling those securities to realize the losses. This strategy of selling securities at a loss to offset capital gains realized during the year is a year-end tax planning technique commonly known as “tax loss selling”.  Certain rules apply (for example superficial loss rules that will deny the loss if you buy back the shares within 30 days of selling the shares at year end).  Please contact me for further details.

 

1. Insurance & Estate Planning

One often forgotten tax planning strategy is insurance planning.   This is an estate planning tool that we use to work with insurance professionals to help grow your net worth.  Whether you require medical benefits for your business or protection of your mortgaged assets or general life insurance, I can assist you to find the best solution for you and your family.

Here are some areas you may want to consider:

1.Tax Efficient Strategies

2.Income protection & Disability Insurance

3.Critical Illness

4.Key Person Insurance

5.Medical Benefits for your staff and family

 

If you do not have a Will or Power of Attorney (POA) prepared, you should also strongly consider preparing those documents.  For business owners, to avoid probate tax, you may also want to consider preparing multiple wills.   I can help guide you in the right direction for any of your insurance or estate planning needs.

 

1. Advisory, Tax Planning and Cash Flow Planning

Whether you are an individual taxpayer, sole proprietor or corporate business owner, many of us have experienced a challenging few months.   We also provide virtual CFO services that will help you to focus on working on your business and allow us to help with your business strategies and long-term planning.   As part of our commitment and service delivery to our clients, with the recent pandemic, we have been working with our clients on the following:

1)Business Financing which includes:

1.$100k BDC working capital loan application

2.Bank loan proposals & applications

3.Lines of credit applications

4.Applications to various government loan programs in response to the COVID-19 pandemic

5.Preparation of business plans and cash flow projections

2)Cash Flow Planning & Budgeting

3)Tax Planning and Corporate Restructuring

4)Net Worth Analysis and Planning

5)Strategies to achieve your short term and long-term goals

Please see our website for further details at https://www.arjcpa.ca/business-advisory-services/

 

1. Website & Social Media Updates & Google Reviews

If you have missed out on previous newsletters including all the government programs available throughout covid in 2020 and 2021, please click Herefor the archives:  https://arjcpa.ca/newsletter/

We have been working very hard in providing COVID-19 CRA program updates, personal tips & accounting, tax and business content on social media.   Please connect and follow the links to my social media at your convenience (Facebook, Twitter, LinkedIn, Instagram) to stay fully updated on COVID-19 and tax planning tips for individuals & businesses.

If you get an opportunity, please also provide a Google Review available at the following link:

AR Jaffer Professional Corporation Chartered Professional Account Google Review

 

Stay Safe!

Best regards,