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Extended Office Hours
Willsey Davis is now open with extended office hours of 8:00 am - 5:00 pm. For your convenience the office will remain open during the 12:00 pm -1:00 pm lunch hour. These hours will be in effect until May 1st.
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Welcome Tessa
Welcome to our newest staff member Tessa Vos who joined Willsey Davis as an accounting technician in January. Tessa is currently enrolled at GPRC and will complete the Bachelor of Commerce program in April 2014. Tessa was raised in South Africa and moved to Canada with her family when she was 11 years old. Welcome to our team Tessa!
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Our New Website
Willsey Davis is pleased to announce the completion and launch of its new website. Visitors will find up-to-date contact information, useful tax guidelines, as well as details about our company, team, and culture. The new site is mobile-optimized to provide an enhanced browsing experience for visitors on tablets and mobile devices. See it for yourself at http://www.willseydavis.com
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Willsey Davis is proud to be a Community Leadership Partner of the Community Foundation of Northwestern Alberta.
The 14th Annual Regional EMS Wine Fair & Auction was held on February 7, 2014. We are pleased to have once again been a sponsor of this important fundraising event.
Willsey Davis is a bronze sponsor of the annual ACFA Regionale de Grande Prairie Maple Sugar Festival. This festival celebrating the Francophone culture and heritage will be held at Muskoseepi Park on Saturday March 1, 2014
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DEADLINE TO FILE YOUR 2013 T-SLIPS
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Friday, February 28, 2014 is the deadline to file your 2013 T4, T5, T4A and other slips. If your business made payments to employees and/or shareholders during the year for employment income, commissions, taxable allowances and benefits, dividends, interest, or other services rendered during the year, this income may need to be reported to Canada Revenue Agency on a T slip.
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PERSONAL TAX FORMS AND RESOURCES
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The 2013 personal tax checklist and forms are available on the Resources section of our website. Watch your Inbox for our personal tax email which will include the tax checklist and the T183 form which CRA requires to be signed by each tax filer every year.
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If you spend part of the year in the United States it is important for you to determine how the U.S. tax laws apply to you.
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DIRECT DEPOSIT FOR BUSINESSES
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Some quick points to Consider...
* Make your RRSP contributions by March 3, 2014 to ensure the amount is deductible for the 2013 calendar year.
* Certain rules regulate the degree charities can participate in political activities. Is your charity onside?
See www.cra-arc.gc.ca/chrts-gvng/chrts/cmmnctn/pltcl-ctvts/menu-eng.html.
* Are you a US Citizen, Resident or Green Card Holder? Information exchange and U.S. filing requirements have many implications and procedures to consider.
Contact us if you have further questions or wish to discuss!
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Travel Costs
An individual can generally claim reasonable travel costs incurred for medical purposes as a medical expense only where substantially equivalent medical services are unavailable where the taxpayer resides. The following two Technical Interpretations discuss the Canada Revenue Agency's (CRA's) position on this matter.
In an April 5, 2013 Technical Interpretation, CRA considered whether initial travel costs incurred to participate in a foreign medical experimental drug research project and subsequent foreign travel costs after the drug became available in his locality would be considered a valid medical expense.
When the drug became available in Canada, the taxpayer's Canadian doctor advised the taxpayer to continue monitoring with the foreign doctor who had more expertise with the taxpayer's condition and the specific drug. CRA agreed that the reasonableness test was likely met even though medical services were available in a closer location, and would be considered a medical expense.
In another April 5, 2013 Technical Interpretation, CRA discussed a scenario where, even though medical services were provided by local medical practitioners, the taxpayer was unable to secure the services of a local practitioner due to a shortage of medical practitioners. CRA indicated the fact that services were not being available was sufficient to support a claim for medical travel. In this case, the taxpayer's claim for travel to his previous residence to continue receiving treatment from his previous doctor in that area would meet the medical expense requirements.
Action Item: Travel for medical services may be considered a medical expense in certain
scenarios. Contact us to see if your medical travel may qualify.
Can Renovations be Claimed? In a September 13, 2013 Tax Court of Canada case, the taxpayer's claim for amounts paid to install engineered hardwood flooring as a medical expense was denied by CRA. The engineered hardwood replaced fairly new carpet in the taxpayer's five year old home on the advice that her husband, who suffers from progressively debilitating Parkinson's disease and psoriatic arthritis, was at serious risk of the carpet causing a fall. There was no dispute that the new flooring would enable the Appellant's husband to be more mobile and functional within the dwelling. However, in order to claim a medical expense, the law also requires that the expense: (i) not typically be expected to increase the value of the dwelling; and (ii) not normally be incurred by persons who have normal physical development or who do not have a severe and prolonged mobility impairment. CRA argued that the engineered hardwood flooring had to be excluded under both requirements. Taxpayer wins The Court was satisfied with the evidence that modestly priced engineered hardwood flooring, as opposed to solid hardwood flooring, would not typically increase the value of the property, especially when replacing fairly new, quality carpet in only a portion of the home. The Court further concluded that the taxpayer "only put in what was necessary" and that this expense would not normally have been incurred in the absence of the medical need. As such, the expense was allowed. Action Item: Large medical expenses are routinely reviewed by CRA. Contact us before incurring significant costs to determine if they may qualify as a medical expense.
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In an October 3, 2013 CRA Release (Marital Status), CRA noted that:
A spouse is a person to whom you are legally married.
A common-law partner is a person who is not your spouse but with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. Your partner:
(i) has been living with you in a conjugal relationship, and this relationship has lasted at least twelve continuous months;
(ii) is the parent of your child by birth or adoption; or
(iii) has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.
You are "separated" when you start living separate and apart from your spouse or common-law partner because of a breakdown in the relationship for a period of at least 90 days and you have not reconciled.
If you continue to reside in the same household and continue to share parenting and financial responsibilities, CRA will not consider a separation to have occurred for the purposes of the Canada Child Tax Benefit (CCTB) or the GST/HST credit legislation. An exception to this may occur when separate living quarters are self-contained in the same household.
Where there is a marital status change, CRA will recalculate your benefits based on the number of children you have and their ages, your province or territory of residence, and your revised family net income based on your marital status change. Your benefits will be adjusted the month following the month in which your marital status changed.
CCTB: If you or your new spouse or common-law partner have children who are residing with you, CRA will move all the children to the female parent's account. If you are married or living common-law with a person of the same sex, one of you will receive the CCTB for all of the children. To receive the CCTB, you and your spouse or common-law partner have to file a tax return every year, even if you have no income to report.
GST/HST CREDIT: If you did not apply for the GST/HST credit on your tax return and your status is now separated, widowed or divorced, you can apply now.
Action Item: Contact us as soon as there is a change in your marital status as there are numerous current and future tax implications, such as changes to your Canada Child Tax Benefits and GST/HST Credits!
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Gift of "Free Rent"
In a November 1, 2013 Tax Court of Canada case, the issue was whether the taxpayer could claim a charitable donation for the fair market value of free rent provided to a Registered Canadian Charitable Organization, Peaceful Schools, of which the taxpayer's spouse was the president.
Two rooms in the house, owned by the taxpayer's spouse were used by the charity although there was no rental arrangement, no rent paid, no rental income reported by the taxpayers, and no cash donation made.
Taxpayer Loses
The Court noted that there was not a transfer of property as the Charitable Organization was simply allowed to use the rooms. There was no legal effect to this.
Planning Strategy
The Court noted that the taxpayer and his wife could have rented the rooms, donated the receipts and received a charitable donation tax credit. CRA agreed that this was true but this is not what happened.
If rent had been charged, the rental income, net of expenses, would have to be reported.
Action Item: This may also apply to a person providing a personally owned tool, or a piece of equipment, for example a computer, or even an automobile for a charity to use.
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