Transferred to a new website

I have managed to get the new website up and functional. The links are all working properly, so please check out taxtim.ca for any future updates.

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Hiring credit for small business (HCSB)

A little known benefit for the 2011 budget was the HCSB. This credit assists small businesses by providing a credit for those small businesses who pay more EI in 2011 than they paid in 2010. This credit is a maximum of $1,000 and would be issued if your 2011 employer’s EI premiums paid in 2010 was $10,000 or less. So, if your gross payroll in 2010 was $412,882 or higher, you are not eligible for this credit.

There are two major catches to the credit:

  1. The credit isn’t necessarily money in your hands. The CRA will issue a credit (not money) to your payroll account in 2012. This credit would be applied against your 2012 payroll, not your 2011 payroll. You can’t reduce your 2011 source deduction remittances to the CRA to reflect the anticipated 2012 HCSB.
  2. The credit is taxable. That is, you either must pay tax on the HCSB or you have to reduce your wage expense. Either generates the same result.

Should you apply for the HCSB? The answer is that you have no choice. The CRA will automatically calculate the HCSB that you are entitled to on filing your T4 Summary and slips for your business. The credit will be automatically issued.

The difficultly for employers is that they must track this credit and ensure that it is correctly reported for tax purposes. Professional bookkeeping will reduce the burden on business owners in this respect. Please feel free to contact me for help.

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This is a temporary website

Before people think this is a permanent website, I should point out that this is a trial only.

I am looking to covert my current website from a hand-crafted format to WordPress. The current site has not been touched for 7 years so the address and a lot of the content is wrong. It needs to be made more mobile and easier to update.

I am using this site to try out features and writing styles. Once the testing is completed, the entire site will be regenerated on a new domain.

The new site has been bought but is still under construction. The main delay are the DNS servers on the web and choice of theme.

Please subscribe to be notified of the switch over.

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2012 CPP rates

The CRA published the new CPP rates for 2012 on November 1, 2011.

The maximum pensionable earnings for 2012 will be $50,100. The basic exemption and the rates will remain the same as those used for 2011.

This means that, in 2012, the maximum employee contribution will be $2,306.70 and the maximum self-employed contribution will be $4,613.40.

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2011 Fourth Quarter Prescribed Interest Rates

The CRA publishes the prescribed rates of interest every three months. The rates are used to determine what the tax department charges or pays.

For the fourth quarter of 2011, the interest rates generally are:

  • 5% if you owe
  • 3% if the CRA owes you and you are not a corporation
  • 1% if the CRA owes you and you are a corporation as well as prescribed loans.
Exact details may be found here on the CRA’s website.

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The New Canada Pension Plan

Changes to the Canada Pension Plan

See the video at Service Canada

New rules will be affecting employees between the ages of 65 and 70 starting in 2012.

For those between 65 and 70, their employer will be required to deduct CPP contributions from their pay cheques starting Jan 1, 2012. This can be a surprise if they are currently receiving the CPP Retirement Benefits since their employer was not required (until then) to deduct CPP. Now their pay cheque will be reduced but with the possible benefit that their CPP Retirement Benefit will be increased in 2013.

Retirees who are working may elect to continue without CPP being deducted. You get to chose one way or the other once per year. Fail to make a choice and you are assumed to have elected to have CPP deducted from your pay cheques. So, is it worthwhile?

In general, it would be worthwhile if you anticipate living longer than the population average. Otherwise, the additional deductions will not be recovered before your death.

If you think it would be better for you to keep the CPP contributions for yourself, please feel free to contact myself to start the paperwork.

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