Currently, when looking at your Notice of Assessment, you will see an 8-character, alphanumeric code previously referred to as your Internet Access Code (IAC). Starting in 2020, this code is now being referred to as the NETFILE Access Code (NAC).
If you have lost or never received an access code to NETFILE GST/HST return, you can now get a new code by using GST/HST Access Code Online. You can also change your access code to a number of your choice by using GST/HST Access Code Online.
The new NAC is intended to be used as an extra level of security to authenticate an individual during the NETFILE transmission process. This replaces having to provide the CRA with a specific line number of a previous year’s tax return when calling into the CRA to authenticate your account.
This alphanumeric code can be found on your paper Notice of Assessment (NOA) top right corner under the “Notice Details” section ( see image below) or online in your “MyAccount” next to “Access Code”. This code is unique to each individual.
If you cannot locate your NAC on the paper copy of your NOA or online in your “My Account”, you can call the CRA, and answer a few authentication questions before they provide you with the information requested.
Canada Revenue Agency (CRA) has added this service to create a new access code to replace the one that was lost or that you didn’t receive in the mail.
To obtain a new access code you will need to enter the following information:
CRA will verify the above information by obtaining one of the following:
Please note that the session is secured and will expire after 15 minutes of inactivity.
To access the CRA service simply follow the link.
Exclusions:
First-time filers and prior years' returns will be excluded from this code.
Note: You will successfully NETFILE your tax return when you receive a confirmation number at the end of the process. If you do not receive a confirmation number, your tax return has not been transmitted to the CRA through NETFILE.
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Note that you will need the form they mailed to you as it has valuable information to help you file. You will need your business number, dates that you need to file, and most importantly your access code.
If you need any further information, contact the Filing Taxes team of professional accountants today at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
If you are planning on incorporating your business in Mississauga or anywhere in Canada, one of the most important decisions that will take you in the right direction is to find the right professional accountant.
An accountant is well equipped with all the latest rules and regulations. Hence, he is in a better position to assess your individual and family tax situation and give you personalized tax advice and appropriate corporate structure. Once your accountant is aware of your tax situation, he or she can work out the exemplary business structure ultimately mitigating your tax burden. He will consider various factors for tax planning like income splitting with your family, who will hold the business control, and how much control every member should retain.
An accountant after thoroughly assessing your situation can advise you whether incorporation as a holding company will help you shield your profits. He or she can explain other options like setting up a family trust to help your corporation achieve more profits. If you need to know something you can contact an accounting firm to get the help needed.
The four main objectives of structuring a family trust when used in conjunction with a corporation are:
When a corporation introduces a family trust, the value of the business must be evaluated by a valuator. This value is accredited to the founder’s utilizing special shares (usually an estate freeze). This authorizes the beneficiaries of the trust to benefit from the future growth of the corporation.
Establishing a family trust is a far more complicated and detailed process than it looks like in the above paragraph. Before further pursuing a family trust in conjunction with a corporation, take on board a professional accountant in Mississauga to have an expert’s eye on the whole process and get some valuable advice.
A minute book is a collection of important documents that prove the status of your business as a legitimate corporation. The typical components of a minute book are:
Your books can be maintained by a bookkeeping expert and it is good to give them the books.
It is mandatory to update your minute book after every annual meeting, or else you could face some significant penalties. Hiring an experienced accountant is one of the best investments you can make to avoid any unnecessary fines and penalties. He or she can professionally maintain your minute book and ensure everything is organized and updated and protect you from tax authorities. If you need further details about the minute book read my article “Incorporation Services in Mississauga”.
There are several factors to consider when deciding to incorporate your business. If you are still uncertain about incorporating your small business, our experienced and professional team at Filing Taxes is here to set you on the right path considering your personal business situation. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
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Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting firms and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Whenever a tax season rushes towards its end, taxpayers make the country a bustling town. Taxpayers are busy screening, organizing, and shredding thousands of tax documents. Everyone juggling around with documents is banged with common questions likes – for how long should I keep my tax records? When is it safe to scrap old tax documents?
These are simple questions, but you probably have heard different answers. The CRA statute has defined a different set of rules for agencies, businesses, and individuals. Generally, CRA states “if you file your return on time, keep your records for a minimum of six years after the end of the taxation year to which they relate.” However, if you file your tax return late, the six-year period also begins late. To play safe, it is often best practice to keep all supporting documents for 7 years to avoid any potential issues.
The records that you are required to keep are referred to as supporting documents by CRA. The CRA states “you are required by law to keep records of all your transactions to support your income and expenses.” If you are unsure what records to keep, below is the list of records that you need to keep as supporting documents. If still unsure, contact a bookkeeper.
Remember to keep all these records in an organized manner to make your life and tax season easier.
Note: The list above is not exhaustive.
The CRA requires business documents to be kept for a minimum of 6 years – but why is it important? In case your business is audited or to review your tax return, there may be a need for business documents from the last 6 years. Records can come in paper or electronic form as long as they include all supporting documentation.
Improper maintenance of records can result in audits and possible legal action. Running a small business or self-employment can be especially problematic, as inexperience can often lead to misinformation and even mistakes. That is why it is of significant importance to learn which documents you must keep on file and learn efficient organization and filing skills before an audit takes place.
Keeping track of all your supporting documents ensuring everything required is submitted can help you avoid penalties. There is a “repeated failure to report income” penalty. Many Canadians are charged with this penalty each year because they missed out on some income records or forgot to submit important documents such as T-slips. The penalty can be quite heavy, and many Canadians are not even aware of the existence of this penalty.
If you have an accounting firm, then there is no need to worry because they will do accounting tasks and bookkeeping.
Keeping records is one thing; keeping records organized is another! It is easier to pile up every document, but it is harder to keep data organized and filed. Storage is only useful when organized. CRA not only suggests organization – it is required. Let’s discuss some tips to organize daunting piles of supporting documents.
To reduce the cost of dealing with the inevitable accumulation of business documents that comes from doing business and paying taxes in Canada, and to provide sufficient evidence and support in the event of a review by CRA is only possible if you know what to keep, why to keep, how to keep and for how long to keep.
For effective record keeping, doubt means do not discard. Keeping your documents for too long is not harmful, but scrapping them too soon may be disastrous. We hope the information shared will help you determine how long to keep your tax records in Canada.
If you are looking for an International Tax Accountant in Canada, then feel free to reach out to Filing Taxes at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional accountants will make sure to get you the maximum tax refund on your personal tax return.
Disclaimer:
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Fiscal year-end remains the same year after year unless there is a dire need for it to be changed. A company changes its fiscal period for various strategic reasons. Reasons may include operational convenience, liquidity reasons, industry benchmarking, seasonal fluctuations of the business, financial reporting requirements and tax implications to name a few..
Year-end change is an internal matter as it might be required to adhere to business needs. Hence Canada Revenue Agency (CRA) has allowed this change in year-end with some set regulations and criteria to abide by. Once a business changes its fiscal year, it is a must to change the tax year along.
Businesses may try to exploit the system by changing their fiscal period for minimizing taxes. This is the reason every case is reviewed by CRA individually to ensure that the change being made is for legitimate business reasons. For example, a subsidiary may want its year-end to align with its parent company, or a seasonal business may intend to line up its year-end with its time of operation.
If in case CRA realizes that the year-end change request is placed to reduce the tax bills or is being done for the personal convenience of the taxpayer, the request will be denied.
Whether or not a business can change its fiscal year-end depends on how the business is structured. The business structure has a great impact on how to report the income and what type -of tax returns need to be filed. Only three business structures are allowed a fiscal year-end other than 31 December. These are defined by CRA as follows:
a) Sole Proprietorship – an unincorporated business that is owned by one individual. The owner has the sole responsibility for making decisions, receives all the profits, claims all losses, and does not have separate legal status from the business.
b) Members of a Partnership – an association or relationship between two or more individuals, corporations, trusts, or partnerships that join together to carry on trade business. Each partner contributes money, labor, property, or skills and is entitled to a share of the profits or losses of the business.
c) Corporation – a corporation is a separate legal entity. It can enter contracts and own property in its own name, separately and distinctly from its owners. The owners transfer money, property, or services in exchange for shares. The owners of these shares are called shareholders. The shareholders cannot claim any losses the corporation incurs.
The process of setting up a year-end depends on how the business is structured. For sole proprietorship and partnership, a direct application to CRA needs to be raised. It can be done by filling a Form T1139, Reconciliation of Business Income for Tax Purposes by the required date. The CRA will review the application and subject to its assessment may or may not grant the request.
For a corporation, fiscal year-end will automatically establish by the date the first corporate tax (T2) return is filed, however, it must be filed within 53 weeks of the date of incorporation.
For sole proprietorship and partnership, the procedure to change the fiscal year-end is the same as for new business, need to submit form T1139 to CRA. The CRA will review the application and will decide to grant or deny the request.
For a corporation, a letter must be sent to the director of your local tax service office requesting a change in the business year-end. The letter must include the reasons to explain why a need is there to change the fiscal year-end for the business. The application will be reviewed by CRA and they may grant approval to the request if they deem your reasons for changing to be practical and justified. If you don't know how to do this stuff you can contact an accountant for any of your work.
Most accountants are also bookkeepers, simply they do both work, accounting and bookkeeping work.
There are some circumstances when no permission from CRA is required to change the year-end, such as when:
If you are looking for a professional accounting firm who can assist you in the process of changing the fiscal year-end for your business, then feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer:
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
Tracking your Meals and Entertainment CRA Corporate may appear to be something only certain types of dieters may do. But did you know that spending on these activities can actually save you tax money?
There is no definite or precise rule to determine the deduction of your meal and entertainment expenses. It is a subjective and grey area that considers the factors like particular business situations. As well as the scenario in which a specific meal and entertainment expense is incurred. This guide will provide more insight into the puzzling and ambiguous meals and entertainment expenses.
The general principle for an expense incurred in the course of business with the sole purpose of generating business income makes it eligible for a tax deduction. However, the subjectivity in this matter shall be understood comprehensively when we consider all the limitations by tax law. This will help you to determine your legitimate tax deductions on meals and entertainment expenses. Altogether and to figure out unique scenarios where you can claim a 100% deduction.
The meals category includes expenses incurred in the consumption of food and beverages. CRA's definition of entertainment expenses includes attendance at an event (e.g. tickets for a concert, entertaining guests at sporting events, etc.). When you incur these expenses in the course of your business, your company may claim 50% of the total amount paid as a deduction on its corporate income tax return. For more information on Food, Beverages and Meals and Entertainment CRA Corporate see the Canada Revenue Agency's Income Tax Interpretation Bulletin IT-518R.
The maximum amount you can claim for food, beverages, and entertainment expenses is 50%of the lesser of the following amounts:
You will have to calculate the allowable part you can claim for business use when you claim expenses on this line. These limits also apply to the cost of your meals when you travel or go to a convention, conference, or similar event.
If the convention fees include the cost of food, beverages, or entertainment. But do not show it separately you can deduct this daily $50 amount as a meal and entertainment expense. The 50% limit applies to the daily $50 amount. For example
Convention costs are $400 for 2 days, meals included. Subtracting $50/day for meals makes the adjusted convention fee $400 ‑ ($50 x 2) = $300. Claim the $100 meals and it will be subject to the usual 50% limitation and end up as a $50 deduction.
Note: Incidental items such as coffee and doughnuts available at convention meetings or receptions do not count as meals.
CRA includes taxes and tips in the cost of food and beverages subject to the standard 50-percent rule. You will not find any separate expense category for tips and taxes. So, for instance, a client relevant to your business had lunch at a restaurant and the bill might look something like this:
| Description | Amount ($) |
| Food and beverages | 100 |
| Harmonized Sales Tax (Ontario -13%) | 13 |
| Tip | 10 |
| Total | 123 |
| Deductible expense (50% of total) | 61.5 |
In this regard, the amount that can be claimed in your business tax return subject to the 50% rule is $61.5 (50% of total billing amount $123).
According to the CRA, the below-mentioned expenses are not allowable as Meals and Entertainment CRA Corporate expenses, which means you cannot claim them as a tax deduction.
These guidelines are set CRA to restrict businesses to include all sorts of meals and entertainment expenses that the business incurs and exploit the deduction allowed.
There are scenarios when you can claim entire meals & entertainment expenses.
special workstation.
Some exceptions to the 50% rule for meals and entertainment expenses are based on the kind of work people do and/or the type of businesses they run. According to the Canada Revenue Agency, the following expenses are exempt from the 50% limitation, which means you can write off the full amount of the expense.
Note that the Canada Revenue Agency demands proof that these expenses are incurred to earn business income. Hence it is compulsory to have proper documentation when claiming such expenses.
While the above information deals with food and entertainment expenses as they apply to business people and professionals. The 50-percent limit also applies to the Meals and Entertainment CRA Corporate expenses of employees. Such as the expenses of commissioned salespersons and the traveling expenses of employees ordinarily required to work away from their employer’s place of business.
If you are operating your business as a sole proprietorship or partnership. Claiming your business expenses is part of completing Form T2125, Statement of Business or Professional Income as part of your T1 income tax return.
If you are operating your business as a corporation, you will claim meals and entertainment expenses under operating expenses (8523). While you are using the General Index of Financial Information (GIFI) to complete your financial information statement on your T2 corporate income tax return.
If you are looking for a professional Tax Accountant who can lead you through the process of claiming business expenses on your tax return. In addition feel free to reach out to Filing Taxes at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.
The information on this page is intended to provide general information. The information does not consider your personal situation. As well is not intended to be used without consultation from accounting firms and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.
With the outbreak of the COVID-19 pandemic, many lives have been affected in some or another way. The federal government has introduced several measures to support the people in need. With these measures comes a big relief for the taxpayers during these difficult times. It was imperative for the government to come up with this support. As many people have lost their jobs and businesses. Let's have a look at these measures.
You will not be charged any penalty for late filing of interest if your 2019 individual (T1) income tax returns are filed and payments are made earlier to September 1, 2020. However, the government is saving the June 1 filing deadline for T1 individuals. Also, the June 15 filing deadline for T1 self-employed individuals to reassure filing returns in time to calculate benefits correctly.
If evaluation of tax return 2019 is not done in time, benefits for July to September 2020 payments will be from 2018 tax returns data. Once 2019 return filed, Canadian Revenue Agency (CRA) may make modifications based on updated income data. No Penalties and interest if payments are done before final deadlines of September 1, 2020. That includes late-filing penalty as long as return is filed by September 1, 2020.
Canadian people will be supported financially during the COVID-19 pandemic, which will include new advantages and credits, and changes to existing ones. You may also get support from other financial programs.
It motivates Canadians to file their tax returns by June 1st, 2020, or as early as possible. So they can receive appropriate advantages based on their 2019 tax return.
It provides temporary income support for workers who have no income or are earning less than $1,000 in a month due to COVID-19.
It provides a 75% wage subsidy to employers eligible for up to 12 weeks.
It provides short-term financial support for post-secondary students who are eligible, and graduating high school students who are unable to work due to COVID-19.
Eligible individuals who are receiving the GST credit will continue to receive these payments based on their 2018 tax return information.
The small withdrawal requirement from RRIFs will be decreased by 25% for 2020. To recognize unstable market conditions and their influence on many seniors' retirement savings.
The government has also introduced several other measures that include:
● A six-month interest-free delay on the repayment of Canada Student Loans for all people who are presently in the process of paying back. Similar is for Quebec’s provincial student financial assistance program.
● The Canada Emergency Student Benefit (CESB) will offer support to students and new graduates who cannot find a full-time job or are unable to work due to COVID-19. The eligible students can receive $1,250 a month or $2,000 a month for those with disabilities. This advantage will be available at the beginning of May and will continue until August this year.
● Homeowners with Canada Mortgage Housing Corporation(CMHC) -insured loans that are facing financial problems will be allowed to delay mortgage payments.
● A temporary measures implemented by the CRA to allow an electronic filer to submit an electronic return for their client. It doesn’t matter even if a paper return is already submitted for that tax year but is not prepared.
● The government will provide a one-time $200 refundable tax credit to seniors in Manitoba called the Seniors Economic Recovery Credit. People living in Manitoba who are 65 years of age or above will receive the credit despite income. The senior citizens who file a 2018 tax return as a resident of Manitoba will receive a cheque in May 2020. And all other eligible seniors can declare the credit when they file their 2020 tax return next year.
● For seniors whose 2019 income data is not evaluated, extension in Guaranteed Income Supplement and Allowance payments will be given. It will help to ensure there is no delay in payments until October.
Taxpayers should be vigilant when they get a message saying you received a deposit for the Canada Emergency Response Benefit. You may get this either by telephone, mail, or text message. A fraud will claim to be from the Canada Revenue Agency (CRA). It request personal information such as a social insurance number, credit card number, bank account number, or passport number. Be aware of such scams. It is best to have an accounting firm in contact to get your protected from fraud.
These fraudsters may say that this personal information is important. So the taxpayer can get a refund or a payment benefit. Other communications insist taxpayers visit a dummy CRA website. At this site, taxpayer needs to verify his identity by entering personal information. These are scams, and taxpayers should never reply to these fraudulent communications. Also, they should not click on any of the links given by such sources.
If you have any queries about the influence of these changes on you and your taxes, Filing Taxes is here to help. Visit our website for the latest information on how we are ready to help our clients during the COVID-19 crisis and how we can serve you in the best possible ways. Alternatively, you can call us at +1 416-479-8532 too.
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