Special Edition – Underused Housing Tax Newsletter

Highlights In This Issue:

  • The new Underused Housing Tax (UHT) imposes a 1% annual tax on the value of residential real estate considered to be vacant or underused that is owned on December 31 of each year. The government indicated that the tax would target property owned by non-Canadians; however, the scope of filing requirements extends to many Canadian entities and individuals, including private corporations, and trustees of a trust. The first filings and taxes are due on April 30, 2023.1
  • This summary is intended to be a general guide in determining filing obligations and tax exposure.

Special Edition Underused Housing Tax Newsletter

Tax Tips & Traps – 1st Quarter 2023 – Issue 141

Highlights In This Issue:

  • Tax Tidbits
  • Covid Benefits: Review/Audit Activity
  • Unreported Real Estate Dispositions: Multiple Issues
  • Employee Gifts and Parking: Updated CRA Policies
  • Witnesses For Legal Documents:  Choose them Wisely
  • Canada Dental Benefit:  Support for those with Young Children
  • One-Time Top-Up to the Canada Housing Benefit: Additional Support

Tax Tips and Traps 141, 2023 – 1st Quarter

Canadian Dental Benefit

Do you have a child under the age of 12? If so, you may qualify for the Canadian Dental Benefit!

This benefit will give eligible families up-front, direct payments of up to $650 a year per eligible child under 12 for two years to help cover the costs of dental care services.

Payments will range between $260 and $650, depending on the adjusted net income. This payment will be tax free, and available for each eligible child, for two periods. The first period is for children under 12 as at December 1, 2022 who had dental care between October 1, 2022 and June 30, 2023.

Full criteria include:

  • Have a child or children under 12 as of December 1, 2022 and are currently receiving the Canada Child Benefit (CCB) for that child;
  • Have an adjusted family net income of less than $90,000;
  • The child does not have access to private dental insurance;
  • Have filed their 2021 tax return; and
  • Have had or will have out of pocket expenses for their child’s dental care services incurred between October 1, 2022 and June 30, 2023, for which the costs are not fully covered or reimbursed by another dental program provided by any level of government.

More information on the Canada Dental Benefit can be found here: Canada Dental Benefit – Canada.ca

Tax Tips & Traps – 4th Quarter 2022 – Issue 140

Highlights In This Issue:

  • Tax Tidbits
  • Crowdfunding: Taxable or Not?
  • Trusts:  New and Expanded Disclosure Requirements
  • Director Liability:  Is Asking About Source Deductions Enough?
  • Executor:  Whether to Accept this Role
  • GST/HST Input Tax Credits:  Reasonable Expectation of Profit
  • Tips Collected Electronically:  Withholding Requirements

Tax Tips and Traps 140, 2022 – 4th Quarter

Tax Tips & Traps –3rd Quarter 2022 – Issue 139

Highlights In This Issue:

  • Tax Tidbits
  • Poker Playing: Hobby or Business?
  • Required Travel: Between Home and Work
  • Principal Residence Exemption: Land in Excess of One-half Hectare
  • Personal Services Business (PSB): CRA Education Initiatives
  • TFSA Overcontribution: Information in Your CRA Online Account
  • CPP Disability Benefit: Following the Doctor’s Advice
  • Shared Custody Arrangements: Impact of School Closures

Tax Tips and Traps 139, 2022 – 3rd Quarter (PDF)

Tax Tips & Traps – 2nd Quarter 2022 – Issue 138

Highlights:

Tax Tidbits
Buying and Selling a Home: Budget 2022
Principal Residence Exemption
CERB/CRB: Eligibility Verification
Estimated Sales by CRA: Audit File Selection and Assessment
Auditing Old Tax Returns: CRA Abilities and Limitations
Money Received from Abroad: CRA Reviews
Digital Adoption Program: Grants, Loans and Professional Assistance

Tax Tips and Traps 138, 2022 – 2nd Quarter

Uplift – Your Voice, Your Business, and Your Community

Last night, Managers and Partners from GSE attended the Uplift – Your Voice, Your Business, and Your Community event, presented by Elgin-St. Thomas Small Business Enterprise Centre. This amazing event featured guest speaker Jam Gamble, and focused on gaining confidence and finding your voice to help elevate your life, business, and community. This was a great opportunity to gather with business and community leaders, and spend time together as a team!

 

Tax Party 2022

This past Monday marked the end of Personal Tax Season for us at Graham Scott Enns LLP. GSE marked the occasion with our usual end of tax season party. This year, we held our tax party at the wonderful Wildflowers Farm in St. Thomas. It was a great opportunity to socialize outside of the workplace and de-stress after a busy few months. There were lots of games, good food and great company. We’ve missed the opportunity to gather as a large group over the last two years, so we all enjoyed the opportunity to spend time together. A big thank you to Wildflowers Farm for hosting our party!

Work From Home – Personal Income Tax Deduction

Did you work from home in 2021? If the answer is yes, you may be eligible for a tax deduction on your 2021 tax return.

CRA has provided two options when claiming employment expenses related to working from home due to COVID-19.

  • Temporary Flat Rate Method
  • Detailed Method

Temporary Flat Rate Method

To qualify for the temporary flat rate method, the taxpayer must meet all the following conditions below:

  • The taxpayer worked from home due to the COVID-19 pandemic
  • The taxpayer worked more than 50% of the time from home for a period of at least 4 consecutive weeks in the year.
  • The taxpayer is not claiming any other employment expenses
  • The employer did not reimburse all the taxpayer’s home office expenses.

If you meet all the above conditions, you can claim $2 per day up to a maximum of $500 (250 days is the maximum number of days you can claim under this method). If you choose to claim home office expenses using this method, please inform your advisor of the number of days you worked from home in 2021. Please note, there is no certification required from your employer if you choose to use this method.

Detailed Method

To qualify for the detailed method, the taxpayer must meet all the following conditions below:

  • The taxpayer worked from home due to the COVID-19 pandemic
  • The taxpayer worked more than 50% of the time from home for a period of at least 4 consecutive weeks in the year.
  • The taxpayer paid for expenses related to the workspace in their home
  • The taxpayer has a completed and signed form T2200S – Declaration of Conditions of Employment for Working at Home Due to COVID-19 from their employer

If you meet all the above conditions, you can claim a portion of electricity, heat, water, maintenance/repair costs, the utilities portion of condo fees, common office supplies (such as toner and printer paper) and rent related to the use of the workspace in the home. Reasonable repair and maintenance costs are light bulbs, repairing walls of the workspace or broken desks etc. Expenses that are not deductible include mortgage interest, principal mortgage payments, furniture, equipment, computers, and accessories.  All the allowable expenses must be prorated to the portion of the house you are using for the office workspace, which is computed on a square footage basis.  In addition, the office workspace will have to be prorated for hours used for employment purposes (i.e., personal use hours of the workspace vs. employment use hours of the workspace). If you are using this method, please be sure to send your advisor information pertaining to the square footage of your home office workspace as well as the total square footage of your home, along with a ratio of personal vs business use of the home office workspace.  Under this method, you are required to keep supporting documents related to the allowable expenses in case CRA requests to review them.

If you are wondering what option would result in a better tax deduction for you, CRA has created a calculator online which can be accessed using this link: Compare the claim methods – Home office expenses for employees – Canada.ca

If you have any questions, please reach out to your advisor who can assist you in making sure you claim the deduction that works best for your situation.