Annual Message From The Partners
It seems, yet another tax season snuck up on us – our 60th! From humble beginnings in a basement office at Dundas and Hurontario in 1963, a small but mighty team of three has grown into a firm of more than 40 talented and enthusiastic professionals dedicated to delivering on our promise of Quality, Care and Candour. 60 years is an amazing milestone and we are incredibly proud of our past, but equally excited about the future.
We are very fortunate to have been able to add fantastic professionals to our team, and help our legacy team grow and advance in their careers. So much has evolved, but one thing will always be a constant – our commitment to delivering excellence and putting relationships first. As you watch us grow, we would wholeheartedly appreciate your feedback and guidance to keep us on track. Our team’s goal is to create the best accounting firm, and our clients’ experience with us is first and foremost!
Thank you for the privilege of being of service! Cheers to 60 years more!
Steve, Catherine, and Ana
COVID-19 Benefits Repayment
If in 2022, you repaid federal COVID-19 benefits (CERB, CESB, CRB, CRCB, CRSB, or CWLB) which were received in 2022 or earlier, the amount repaid will be reported in box 201 of your T4A slip, or on your T4E slip along with other employment insurance (EI) amounts repaid. You can choose to claim a deduction on your return for the repayment in the year that the benefit was received, or in the year that the benefit was repaid. You may also choose to split the deduction between these two returns, if the total deduction is not more than the amount repaid. Your tax savings may vary depending on which year the repayment is deducted. CRA has added a new tax form for 2022 that will avoid the need to file a T1 adjustment of prior years. The Farnham team will assist you with determining the most advantageous year to include the repayment.
For more information on the eligibility criteria and repayment of benefits, visit:
First-time Home Buyer’s Tax Credit
A first-time home buyer who purchases a qualifying home is eligible for a federal 15% tax credit. For 2022, the government has increased the amount from $5,000 to $10,000. This provides eligible home buyers with a non-refundable $1,500 tax savings. The purchaser does not need to be a first-time home buyer to qualify if the home provides better accessibility for either the purchaser or a related individual, who is disabled at the time and qualifies for the disability tax credit. The purchaser or related individual must also intend to occupy the home as a principal residence no later than one year after it is acquired.
Home Accessibility Tax Credit
A 15% non-refundable tax credit is available for eligible home renovation/alteration expenses for a qualifying individual. The claim can be made by the individual or a related person (some exceptions apply), as long as the individual was eligible for the disability tax credit in 2022 or the individual was 65 years old or older in 2022. To qualify, the renovations or alterations should improve accessibility, mobility, functionality of the dwelling or reduce the risk of harm to the qualifying individual. For 2022, the eligible expense limit has been increased from $10,000 to $20,000, providing the taxpayer with up to $3,000 of savings.
Surrogacy and Fertility Expenses
The list of eligible medical expenses has been expanded to include amounts paid to fertility clinics and donor banks in Canada to obtain donor sperm or ova to enable the conception of a child by the individual, the individual’s spouse or common-law partner, or a surrogate mother on behalf of the individual. In addition, certain expenses incurred in Canada for a surrogate or donor are considered medical expenses of the individual. Along with other eligibility criteria, the expense must be paid by the individual or their spouse or common-law partner, incurred in Canada, and incurred for the purpose of the individual becoming a parent.
Ontario Staycation Tax Credit
Ontario residents (as of December 31, 2022) can claim a 20% refundable tax credit on their eligible 2022 accommodation expenses for short-term leisure trips in Ontario. Expenses incurred for school, business, or eligible for the medical expense tax credit are not eligible for the Staycation credit. The expense limit is $1,000 for individuals and $2,000 for families. An invoice from a GST/HST registered vendor, which you, your spouse or eligible child paid, should be readily available.
Immediate Expensing of Capital Property
Self-employed individuals may be eligible to claim a 100% deduction of certain capital assets acquired during 2022 and become available for use before 2025. This deduction cannot create a business loss. In the case where the individual may own shares of a corporation or has an interest in a partnership, there are specific rules which may require the $1.5 million expenditure limit to be shared by the individual and those entities.
Farnham Expense Template
For our applicable clients, we have provided a template which will assist you with the summarization of your business expenses to be reported on your personal tax return. The new template will minimize possible errors and improve efficiency during the preparation of your tax returns. Please enter the expenses in the excel spreadsheet, which can be downloaded here, and submit to us along with your tax documents. If there are any questions regarding how to complete the template, please connect with your Farnham representative.
Reminders
Filing Deadlines – April 30th falls on a Sunday this year. As a result, personal tax returns will be considered filed on time if received on or before May 1, 2023. Self-employed individuals and their partners’ filing due date is June 15th. Regardless of your filing deadline, tax owing is due by May 1, 2023, otherwise the balance will attract 8% interest, compounded daily. Late filed returns will attract a 5% penalty on the balance owing plus 1% for each full month the return is outstanding.
RRSP Contributions – March 1, 2023, is the RRSP contribution deadline. The deduction can be used in either 2022 or 2023 tax filings, subject to your RRSP room available. Review your 2021 Notice of Assessment for your available room, or check online with CRA “My Account”, if registered. An overcontribution above $2,000 will trigger a 1% monthly penalty.
TFSA Contributions – Canadian residents over 18 years of age can open a tax-free-savings account (TFSA). The annual limit is $6,000 for 2022 and $6,500 for 2023.
Late Slips – Typically, T3 (trust) and T5013 (partnership) slips are not issued until the end of March and foreign slips can be even later. If you receive a late or amended slip after filing, please notify us as soon as possible to amend your return. The CRA’s matching program will identify any missing slips and impose penalties.
Paying CRA – Three payment options:
- Pre-Authorized Debit (PAD): A one time draw directly from your bank account on a specified withdrawal date. The PAD form must be filed at least 5 days before the withdrawal date and therefore must be submitted by April 25th to meet the April 30th deadline.
- Online: Sign-in through your financial institution and add CRA as a payee. Your account number would be your 9-digit SIN.
- Remittance Voucher: We can issue a voucher that you can mail with a cheque or take to your bank for a direct transfer.