CRA Gift Tax Rules For Employers 2022

 If you follow the gift-tax laws of the Canada Revenue Agency (CRA) and give your staff gifts instead of cash bonuses, you and your employee will save money on Canadian income tax. Employers can deduct the total cost of the gift, and employees are not required to include the cost of the present in their taxable income.

Employee Gifts and CRA Tax Rules

Except for the following exclusions, the CRA considers all presents given to employees to be taxable benefits:

• Employees can receive up to $500 in noncash gifts per year.

• Once every five years, employees may receive non-cash presents worth less than $500 in acknowledgment of long service.

• Employer-sponsored parties or social gatherings cost less than $100 per person.

• At work-related functions such as meetings, training sessions, and so on, meals or other hospitality services are provided.

• Coffee/tea, snacks, mugs, t-shirts, and hats are worthless.

Anything over the $500 threshold is deemed a taxable benefit, and the employer may be required to make source deductions.

Gift Types 

The number of presents an employee can receive in a given year is unlimited, and the total cash value of all presents is the only restriction. Small gifts are not accepted, and the $500 limitation excludes mugs, chocolates, plaques, and other similar items.

You may convert gift certificates and stocks to cash, and performance-related incentives and bonuses will be taxable employee benefits.

Conclusion

It's crucial to ensure that staff presents are presented for the right reasons. The CRA's gift and reward rules state:

A present must be given for a particular event, such as a religious holiday, a birthday, a wedding, or a child's birth... This policy does not apply if you offer your employee a noncash present or prize for any other purpose, and you must include the fair market value of the gift or award in the employee's income.

Everything you need to know about the T1 form

 When you want to pay your taxes to the CRA, you will need to submit a form called the T1 form. It is the income tax and benefit return form that comprises details about all the personal incomes for the year. T1 form lets you detail all the taxes you have to pay, leading to a precise calculator and payment.

You can easily do this on your own. However, if you hire professional accounting services, it will become a lot easier. Since they keep track of all your payments, you can easily hand them over to the income tax services provider to assess your profile. 

How to get the T1 form?

You can get the T1 form online through CRA My Account. Under the Tax Returns View section, you can find the T1 form for the current year as well as the filled forms of past years. There are many tax clinics that offer you the form as well. Be sure to get the form for the right financial year.

What are the sections in the T1 form?

When you get the form, you can see the following sections:

1. Identification: This is the section where you fill in details about yourself. It includes name, marital status, address, business details, and other such information. 

2. Total Income: This is where you fill in information about your gross income. It must have every wage and revenue you got during the past year. You shouldn’t apply any deductions here. 

3. Net Income: This section is where you enter the amount you have after all the expenses. You can check the CRA site to understand what are the expenses that you can deduct from the total income. 

4. Taxable Income: There are a few deductions you can make based on your profile. To take full advantage of deductions, we advise you to consider opting for professional income tax services. 

5. Refund or Balance Owing: Any negative number you get here returns to you as a refund. 

Finally, you can either mail the filled form to CRA or upload it online through trusted platforms. 

Tips For Finding The Right Tax Accountant For Your Business

 

Tax filing season is full of companies looking to save on tax money. Especially for small businesses, it can be financially stressful to pay a huge amount of taxes. Yet, this only happens when they have not planned everything prior. 

The CRA offers several reductions to save money and pay only the necessary tax amount. To optimally use that, you might need income tax experts by your side. In this blog, we will help you with some tips on how to choose the right tax accountant for your business. 

1. Ask other business owners

The best way to find a good tax accountant is through referrals. Ask business owners in your circle to find out whether they know of any tax accountants. You can also ask your financial advisor for such referrals. 

2. Go for local firms

Local accounting firms understand the state-specific laws. Thus, giving you more insight into applicable tax reductions. It helps prevent overpaying and also provides quick access to their office. 

3. Check their experience

If an accountant doesn’t have any expertise in filing taxes for your industry, it is not smart to hire them. Find someone who already has a wealthy amount of experience. They tend to know more about how to align accounting with taxes than the newbies. 

4. Perform a background check

Managing your accounts is a sensitive task that involves sharing most of your financial data. Hence, do a background check on the person you hire. Speak with people who they have already worked with to get a better idea about the person. 

Finally…

Income tax accountants aren’t rare. So, it is highly possible that you might choose the wrong person for the job. But, know that it is okay to switch them up with someone else when you do not find their work satisfying. 

4 Small Business Tax Strategies To Reduce Income Tax

 

Small businesses are highly significant to the Canadian economy. According to a study, in 2021, small businesses contributed 98.1% of business in the country. It is becoming highly competitive to establish yourself firmly in the SME sector. In addition, improper tax calculations can lead to inefficient tax filing.  

The Live CFO, being a passionate income tax services provider, couldn’t help but shed some strategies to reduce your income tax. You will find some neat tricks here that will help you overcome your struggles. 

1. Do not forget about receipts 

One of the first mistakes that most small businesses do is not collecting all the receipts. Whatever you do for the betterment of your business can help you reduce the final tax amount. Over the course of the financial year, you should collect receipts for all the little things. Even the cost of purchasing a few envelopes.  

2. Include the Non-capital losses

 

There are some financial years in which you would have incurred more expenses than income. You can use this to decrease your income tax. If you have any unapplied non-capital losses in the last 7 years, you can include that in your current year. This can significantly reduce your taxable income. 

 

3. Earn tax credits through charitable donations

 

Doing good for society always helps you in the long run. When we provide income tax services to our clients, we always urge them to keep track of all their charitable donations. If you make donations to registered Canadian charities, you can earn more tax credits and reduce your income tax amount. 

 

4. Plan your CCA

 

This is one of the best strategies to reduce your income tax. Many small businesses do not know that you do not have to claim your Capital Cost Allowance in the same year. You can carry it over. So, save it for years you expect your income tax amount to increase. 

 

Finally… 

As a small business, you must save as much as possible through smart methods. Do that through professional help and enjoy the savings!

Reasons Why Pets Are Good For Children With ADHD

 

 

Raising a child with ADHD can be a handful. However, it is nothing less rewarding for you as a parent. They come with all the excitements and traits in a heightened manner. Instilling healthy control and development skills are vital for their growth. Yet, it is almost never easy to get a child with ADHD to do what you wish.

To tackle this, many doctors recommend parents adopt a pet. Apart from being a furry companion, they also help kids with ADHD in several ways. Let us take a look at them. 

 

1. Reduces stress levels and anxiety

 

When you pet a dog, you feel happy. This is because this particular activity increases serotonin levels and lowers cortisol(stress-inducing hormone) levels in the brain. The same applies to kids with ADHD. These kids naturally show higher emotions than other kids their age. A friendly companion eases their stress and helps them find comfort in times of emotional episodes. 

 

2. Teaches responsibility

 

Children feel a level of connection and responsibility to their pets. A dog, for example, follows a routine for its daily activities. When your kid takes the charge, they learn to do things on time along with the pet. It helps them understand boundaries and improve their focus. Which counteracts the ADHD and facilitates their learning developmental skills. 

 

3. Provides physical exercise

 

According to a study, children with ADHD showed better attention and impulse control after a short exercise session. And, pets love nothing more than engaging in playful physical activities. Specially trained dogs can help provide your child with the right amount of physical exercise every day. Which will eventually help them thrive in the future. 

 

4. Offer the much-needed companionship

 

At our Avenue Road Child Care in Toronto, we understand how important it is for a child to have emotional support. Most pets do too. They can recognize your child’s emotions and react accordingly to soothe them. And, a pet will never judge your child. It will always be there for them no matter what they do. Most kids with ADHD feel disconnected from others because of a lack of deep understanding. With a pet, however, they feel comforted and connected. 

 

Finally…

 

Having a pet is only one part of the solution. Continued love, guidance, and support from every environment you place your kid in is vital. If you suspect that your kid might have ADHD, consult an expert immediately. 

A Beginner’s Guide To Choosing The Right Daycare For Your Child

 Leaving your child under someone else’s care can be stressful. To calm yourself down, you need to find the best daycare available near you. As a well-established Avenue Road child care in Toronto, we would like to shed some light on the topic.

The following are some tips that will help you in choosing the right daycare for your child. 

1. Look into their reputation 

First, you should only pick daycare facilities that have a license to operate in that area. Then, do spy work by digging into the online reviews. Facebook is a good place to start since you can see honest reviews from real people. Another effective way is to ask around in the fellow parental community. 

2. Drop in and evaluate the safety

Visit the facility and get to know its safety protocols. Start with checking their evacuation protocols in case of emergencies. Then, move on to inquire about CCTV access. If they do not have CCTV access, it is better to not choose that daycare. 

3. Talk with the staff

For the best part of the day, your child is going to be under the daycare staff’s care. And, at an early age, they can easily imprint behaviors from the staff. Hence, before you sign up your kid, talk with the staff and make sure that their parental methods align with yours. Verify that they follow healthy corrective methods to address negative behaviors. 

4. Check their routine

A good daycare will have a well-organized routine that helps keep the children active and playful. It will also not hinder their natural sleep requirements. Notice what they do to keep the kids safe during the playtime. And, ensure that they follow their advertised routine before making your final decision about the place. 

5. Monitor their hygiene

Following proper hygiene tells you a lot about the place. Look down and see whether they have any small pieces of paper or other objects lying around. Also, investigate the walls for molds and see if they have a regular cleaning procedure to make sure the place stays sanitary. 

Trust your parental instincts…

Always rely on your parental instincts to guide you. If a place feels off, take it off the list. You must have no second thoughts about a place where your child is going to stay for the whole day!

Tax For Those Who Earn Through Blogging In Canada

 In this modern world, there are so many people making an earning by writing blogs and creating vlogs. They get their main source of income by blogging. It is highly flexible and an exciting job to do. However, the least exciting part is paying the income tax. 

This profession is like self-employment. Hence, it can involve the same level of complexity. In this blog, we will describe a few things that will help you understand it better. 

Do you need to pay taxes for the blog income?

Yes! According to CRA, blogging qualifies as self-employment. It doesn’t matter if you are operating as a sole proprietorship or freelancing. As long as you have a steady source of income from it, you should pay your taxes.

The form you should use

The income tax form for blogging income is the T2125. If you have an additional corporate job, you need to fill out the regular T4 form along with this one. But, what happens when you have multiple side-hustles like blogging, modeling, and acting? You should get a separate T2125 form for each and fill it out accordingly. 

What counts as income?

When it comes to blogging, cash isn’t the only income. You should list non-monetary and near-monetary compensations you get for your work too. For example, an increasing number of companies compensate bloggers with gift cards and products. When filing for tax, you need to include the fair monetary value of these in the respective fields. 

Finally…

Luckily, similar to other income tax filing, you can apply many tax deductions. It includes internet charges, hardware and software expense, electricity bills, and travel expense to list a few. Calculating taxes, not your forte? Get a tax consultant and let them work for you!

Tips To Save Income Tax In Canada

 Tax filing can be stressful for many factors. You might be nervous about making mistakes. More importantly, you might feel like missing out on ways to reduce the tax amount. There are many ways in which you can save money on taxes. And you can go to a professional income tax consultant, or do it yourself. In this blog, we have curated a brief list of tips that can help you save money on tax. 

1. Pay the RRSP limit

Each year, you can contribute to your Registered Retirement Savings Plan. There’s also a maximum limit on how much you can pay without having to pay a penalty. Find the limit and pay that amount. Your RRSP is not taxable. Thus, you can reduce the tax amount while also saving up for the future. 

2. Borrow and invest

Growing your stock portfolio by borrowing money is beneficial for your tax savings. The interest you pay is tax-deductible. Hence, you can improve your stock portfolio and save money on income tax payments. 

3. Claim medical expenses

While filing your tax returns, do not forget about all the medical expenses you paid. Always be sure to keep all your medical receipts. It will help you in case of an audit. However, you cannot claim every penny you spend on medical expenses. The total amount must be lesser than 3% of your net income or $2,268. 

To make the most of this feature, combine the medical expenses of your family members under one person’s tax return. 

Finally…

Following these three tips can help you improve your tax credit and get higher tax returns. When calculating income tax, always gather information from the CRA website. If not, you can also reach out to your local tax consultants for advice.