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Ali Raza Jaffer, Chartered Accountant Mississauga, Greater Toronto Area

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Dear Valued Clients & Friends,

As we welcome the fall season, we would like to wish all the children a successful school academic year!  We have some important updates on our services, firm and continuous improvements we have made.  Our firm continues to grow and is committed to improve our services for our clients.   With this growth, we have added another valuable staff member to our professional team which takes us to 9 qualified staff who can assist you with your personal accounting and tax planning requirements.   Earlier this year, we launched our ARJ Portal and Docusign for ease of signing.   This fall, we will be revamping our website with additional information and ease of navigating the various tabs.   We will also be updating our invoicing process to make the invoice and payment process more efficient. As always, we welcome feedback via email on other areas you would like to see us improve on to serve you better.

Please also provide us with a google review at your convenience.   Here is the link:

AR Jaffer Professional Corporation Chartered Professional Account Google Review

In this edition of our newsletter, we profile our CFO & Advisory Services, provide some 2023 tax updates and update you with important deadlines that are upcoming for your personal and business accounting and tax compliance. Also keep in mind that if you are required to file Underused Housing Tax (UHT) return for Property Owners, please let us know and we can assist with the process.  The October 31 deadline is fast approaching.

In our Fall edition of our newsletter, here are the topics that will be reviewed:

  1. Firm Service Profile:  Advisory and CFO Services
  2. Income Tax Update
  3. Client Portal
  4. Underused Housing Tax (UHT)
  5. Important CRA Deadlines
  6. CRA My Account
  7. Digital Grant (CDAP)

 

1. Virtual CFO & Advisory Services

If you are looking at long term planning strategies, whether you are an individual taxpayer, sole proprietor, or corporate business owner, there are several approaches that we can assist you with.  As part of our commitment and service delivery to our clients, we have been working with our clients on both financial and non-financial planning measures to achieve your financial goals.    We have been providing Virtual CFO and Advisory Services for many years to our clients.  Further details on our Virtual CFO & Advisory Services can be found at:   https://arjcpa.ca/business-advisory-services/

What does CFO and Advisory mean to you?

A CFO is a Chief Financial Officer.  For business owners, they help with business decision making, measuring financial and non-financial metrics and providing overall strategic direction for your business.  An effective CFO becomes the right-hand person to the CEO. They do this by providing insights into the data to improve business performance and provide strategic advice for operational decisions.

As a business owner, here are some critical questions a CFO can guide you on:

  1. How much cash are we burning each month?
  2. Should we invest in buying a new equipment, a new property or a new line of business?
  3. If our revenue is growing so quickly, why are our cash flows so low?
  4. If we continue to grow our business, how much revenue and profit will we make next year?
  5. How can we mange our expenses in our business?
  6. Do we have money to hire new employees?
  7. What efficiencies can we gain by reducing our full-time equivalents (FTEs)?
  8. What is the most efficient tax strategy to withdraw funds from our business?

In light of some of these questions, here are some of the services we provide as part of our Virtual CFO services:

  • Strategies to help with cash flow management.
  • Bank Loan Proposals
  • Internal controls review
  • Monthly and quarterly financial reporting
  • Investment strategies (real estate, equities, life insurance planning)
  • Refining your Business and Financial Processes
  • Financial & Cash Flow Modelling
  • Due Diligence of buying and selling a business
  • Key Profit Drivers
  • Budget vs. Actual analysis
  • Break Even Point analysis
  • Cash flow analysis
  • KPIs / Scorecard

Advisory Services involve providing various consulting to both your personal and business needs.  These include, tax planning, assisting with the best financing solution for both your personal and business needs, assisting with estate and life insurance planning, cash flow planning and specific strategies related to your business.   Furthermore, advisory services involve providing insights and strategies that help you drive better personal financial and business decisions and focus on the future to successfully achieve your personal and business objectives.

To provide further insight to these services, I have broken down how we can assist with your individual and business planning needs.

Individual:

  • Life Insurance & Estate Planning and recommendations
  • Net Worth Planning
  • Cash Flow Planning & Budgeting
  • Tax Planning and Corporate Restructuring (Holding companies, Estate Freezes, Trusts)
  • Net Worth Analysis and Planning
  • Strategies to achieve your short term and long-term goals

Business:

  1. Business Financing which includes:
    1. $100k BDC working capital loan application
    2. Bank loan proposals & applications
    3. Lines of credit applications
    4. Preparation of business plans and cash flow projections
  2. Cash Flow Planning & Budgeting
  3. Tax Planning and Corporate Restructuring (Holding companies, Estate Freezes, Trusts)
  4. Net Worth Analysis and Planning
  5. Strategies to achieve your short term and long-term goals

If you would like further information on our Virtual CFO and Advisory Services, please contact me at the office at 905-629-7720, send an email to ajaffer@arjcpa.ca or visit our website ARJCPA

2. 2023 Income Tax Update

For your personal taxes, you should have received your notice of assessment over the past few months.  This year, CRA reviewed a random selection of returns.  The most common areas of focus were donation receipts, tuition receipts, medical receipts and disability claims.  If you have yet to file your tax return, please contact us and we can assist to keep you compliant.

     For 2023, here is a list of the most notable tax changes:

    1. Underused Housing Tax (UHT) Filing Requirements (see section 4) below).  Further information is available at https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html
    2. HST on new housing builds:  The Federal Government recently announced the removal of GST on new rental housing builds.   The removal of GST will apply to new purpose-built rental housing, such as apartment buildings, student housing, and senior residences built specifically for long-term rental accommodation.  Further details available at  https://www.canada.ca/en/department-finance/news/2023/09/enhanced-gst-rental-rebate-to-build-more-apartments-for-renters.html
    3. CEBA Loans:   The Federal Government recently extended the CEBA repayment and partial loan forgiveness deadlines.  The repayment deadline for CEBA loans to qualify for partial loan forgiveness of up to 33 per cent is being extended from December 31, 2023, to January 18, 2024.  Full details are available at https://www.canada.ca/en/department-finance/news/2023/09/canada-emergency-business-account-government-extends-repayment-and-partial-loan-forgiveness-deadlines.html
    4. Tax Free First Home Savings Account:   The new tax-free First Home Savings Account is a registered savings account that helps Canadians become first-time home buyers by contributing up to $8,000 per year (up to a lifetime limit of $40,000) for their first down payment, within 15 years. To help Canadians reach their savings goals, First Home Savings Account contributions are tax deductible on annual income tax returns, like a Registered Retirement Savings Plan (RRSP). And, like a Tax-Free Savings Account (TFSA), withdrawals to purchase a first home—including any investment income on contributions—are non-taxable. Tax-free in; tax-free out.  Full details are available at:  https://www.canada.ca/en/department-finance/news/2023/08/canadians-can-save-for-their-first-home-with-new-tax-free-first-home-savings-account.html
    5. First-time home buyer’s tax credit:   The amount used to calculate the first-time home buyers’ tax credit has increased to $10,000 (from $5,000) for a qualifying home purchased after December 31, 2021.
    6. Home accessibility tax credit:  The annual expense limit of the home accessibility tax credit has increased to $20,000; the maximum non-refundable tax credit is $3,000.
    7. Immediate write off of capital property for Self-Employed Individuals:  If you carried on an unincorporated business and acquired capital property in 2022, you may be eligible to claim a 100% deduction of the expenditure this year. Certain capital cost allowance classes are not eligible for the enhanced deduction.
    8. Ontario Staycation credit:  This is a one-time, refundable tax credit allows Ontario taxpayers to claim 20% of accommodation expenses in an Ontario hotel, cottage, or campground during 2022, up to a maximum of $1,000 for individuals and $2,000 for families. This credit is only available for 2022.
    9. Home office expenses:  The temporary flat rate method of $2 per day up to a maximum of $500 still applies if you worked more than 50% of the time from your home for at least four consecutive weeks.  You may also be eligible to claim the actual expenses paid using form T2200(S)

For a full list of tax changes, please click on the links:

Individual Tax Changes:  https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/whats-new.html

Business Tax Changes: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/whats-new-corporations.html

3. Client Portal

 

We have had an excellent response to our new portal, and it has been a huge success when we launched it earlier this year.  Thank you for your trust in our technology as we relaunched our portal!   As a reminder, our Portal services include the following:

  • Ability to upload documents securely and share with us.
  • Ability to digitally sign important tax documents.
  • Ability to view documents and reports that are shared with you.

The ARJ Portal employs the very latest tried and tested security innovation. In addition, it also uses multi-factor authentication as an added security measure, assuring that that no one else is intercepting the documents or reports shared through the portal.

If you still do not have access, please contact us @AR Jaffer Professional Corporation  – Client Care, clientcare@arjcpa.ca  to register for the ARJ Portal.

The link for the portal is @ https://arjcpa.cchifirm.ca/clientportal

Feel free to reach out to us if you have any questions about our new portal.

 

4. Underused Housing Tax (UHT)

The Underused Housing Tax (UHT) is an annual 1% tax on vacant or underused residential housing in Canada that came into effect on January 1, 2022.   Here is outline of the tax and filing requirements for those affected:

  1. The UHT impacts private corporations, trusts, partnerships, and non-residents/citizens who own residential properties in Canada.   Under the UHT rules, a ‘residential property’ generally includes:
        1. detached houses (or similar buildings) with no more than three units. This includes cottages, cabins, and chalets unless they are considered commercial property.
        2. semi-detached houses, row houses, condominium units, and similar separate or divided premises such as a coach house or laneway house
  2. Excluded owners have no obligations or liabilities under the UHT. These include:
            1. individual Canadian citizens or permanent residents holding property in their own name.
            2. individuals who own a residential property through a mutual fund trust, real estate investment trust, or specified investment flow-through trust (SIFT)
            3. publicly traded Canadian corporations
            4. registered charities
            5. cooperative housing corporations
  3. Affected owners include privately held Canadian corporations, partnerships, trusts and trustees (except those specifically excluded above), non-profit corporations, and individuals who are not Canadian citizens or permanent residents.
    1. If you are an affected owner, you must file an annual Underused Housing Tax return by April 30 for each residential property owned in Canada on December 31 of the previous year (beginning December 2022). The underused housing tax is also applicable unless your ownership qualifies for an exemption for the calendar year.  The amount of UHT equal to 1% of the taxable value of your ownership percentage of the property by April 30. Exemptions can be based on type of owner, availability of the residential property, location and use of the residential property, or the occupant of the residential property.  Even if an affected owner meets an exception and is not required to pay the UHT, they still must file a return to declare the exemption.
    2. There are significant penalties if you are an affected owner and fail to file a UHT return by its due date. Affected owners who are individuals are subject to a minimum penalty of $5,000. Affected owners that are corporations are subject to a minimum penalty of $10,000.
    3. Further information is available at https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html

As this is a new filing requirement, there are still many questions that CRA is addressing.  However, if you are an affected owner as outlined above, please contact us and we can assist you in the filing of the Underused Housing Tax return.  Remember, the deadline is October 31st, 2023.

5. Important CRA Deadlines

Listed below are the upcoming CRA deadlines:

  • October 31, 2023 – Deadline to file the Underused Housing Tax (not this is a new form that must be filled out as outlined in section 4) above).
  • Dec 31, 2023 – Deadline for contributions to registered charities to receive a 2023 donation receipt.
  • February 29, 2024 – Deadline for filing of T4 and T5 Slips.
  • February 29, 2024 – RRSP contribution deadline.

 6. CRA My Account

CRA Provides updates on tax changes, webinars, individual and business deductions, and credits and HST information on a regular basis.  You can access the information with update to date information at the following link:  CRA Updates

If you have not done so already, a reminder to sign up for your My account (individuals) or My business account (for business owners).  Details can be found at:

            Individual Account:   https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html

            Business Account:   https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html

CRA Processing Times:  CRA has improved their services, so although processing times are still a little delayed, it has improved significantly compared to the past 2 years.  Here is a resource to review processing times on any submissions to CRA.  This includes updates on tax returns and tax related requests:   https://www.canada.ca/en/revenue-agency/corporate/contact-information/check-cra-processing-times.html. 

7. Canadian Digital Adoption Grant

If you own a small or medium sized Canadian business, you may be eligible for a grant up to $15,000.  The eligibility criteria are as follows.

  1. you’re an owner or director.
  2. your business:
    1. is Canadian owned.
    2. is for-profit.
    3. has 1 to 499 employees.
    4. has had at least $500,000 in annual revenue in 1 of the last 3 years.

For further information, please click on:  https://ised-isde.canada.ca/site/canada-digital-adoption-program/en/boost-your-business-technology-grant

Let us know if you require assistance in applying for this grant if you are eligible based on the criteria.

We hope you enjoyed our newsletter and look forward on suggested topics for future newsletters. A gentle reminder to leave us a google review at

AR Jaffer Professional Corporation Chartered Professional Account Google Review

Have an excellent fall season!