Turack Raguseo Lesti Gilliatt LLP
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 PERSONAL TAX LETTER FOR 2017 TAX YEAR

 SYNOPSIS

 

 January 2018

 

 This letter is to provide you with a quick look at the changes for the 2017/2018 tax years.  Please visit our website at www.turack.ca to see the complete tax letter or contact us should you have any concerns.

 

 REPORTING THE SALE OF YOUR PRINCIPAL RESIDENCE  **PLEASE TAKE NOTE**

 

  • Starting with the 2016 tax year and each year thereafter, if you or your spouse sold ANY real estate including your personal residence, cottage, vacation property or foreign property we need to know!!!

 

If you sold your personal residence you need to supply us with the date of acquisition and the gross sale price.

 

If it was anything other than your personal residence, please talk to one of the partners or staff

 

  • If you started or stopped renting a property that you owned, we need to know!!!

 

CRA is now requiring you to report any or all of the above on your 2016 personal tax returns and subsequent years in order to claim the principal residence exemption.  You do not have to pay tax on any capital gain when you sell your house if it was your principal residence for all the years you owned it and you did not use any part of it to earn income.

 

 TFSA  

 

  • Starting January 1, 2016, the annual TFSA dollar limits for 2016, 2017 and 2018 are $5,500 for each year.

 

RRSP Deduction Limit

 

  • The maximum RRSP contribution limit for 2017 is $26,010. It increases to $26,230 for 2018. You can start making RRSP contributions for the 2017 tax year as early as January 1, 2017 (March 1, 2018 is the deadline).
  • Please provide us with any contribution receipts made in the first 60 days of 2018. These amounts do not necessarily need to be deducted from income in 2017, but they do need to be reported in that year and can be carryforward to the following year.

Repeated failure to report income penalty

  • If you failed to report an amount on your return for 2017 and you also failed to report an amount on your return for 2014, 2015, or 2016, you may have to pay a federal and provincial/territorial repeated failure to report income penalty. Under proposed changes, if you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.
  • As a result of the proposed changes, the federal and provincial or territorial penalties are each equal to the lesser of:
  • 10% of the amount you failed to report on your return for 2017; and
  • 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.

It is imperative that you let us know if you hold any Foreign Property at any time in 2017 with a total cost of more than CAN $100,000. 

Foreign property includes:

  • Shares of foreign corporations held in Canadian brokerage accounts
  • Shares of Canadian corporations held by foreign brokers
  • Foreign mutual funds
  • Precious metals held outside Canada and
  • Foreign bank accounts.

Foreign property does NOT include:

  • Property held primarily (more than 50%) for personal use
  • Holdings in Canadian mutual funds or registered accounts (RRSP, RRIF, TFSA).

The CRA has implemented changes to Form T1135 for the 2015 and subsequent tax years. The changes will allow taxpayers who held specified foreign property with a total cost amount of less than $250,000, throughout the year, to report under a new simplified reporting method rather than providing the detail of each such property.

 

The above are some quick points that we believe should be brought to your attention.  Get the full letter at www.turack.ca.

PLEASE USE OUR PERSONAL TAX CHECKLIST UNDER INFO CENTRE

 

 

 

 

TURACK RAGUSEO LESTI GILLIATT INC.


 PERSONAL TAX LETTER FOR 2017 TAX YEAR

 SYNOPSIS

 

 January 2018

 

 This letter is to provide you with a quick look at the changes for the 2017/2018 tax years.  Please visit our website at www.turack.ca to see the complete tax letter or contact us should you have any concerns.

 

 REPORTING THE SALE OF YOUR PRINCIPAL RESIDENCE  **PLEASE TAKE NOTE**

 

  • Starting with the 2016 tax year and each year thereafter, if you or your spouse sold ANY real estate including your personal residence, cottage, vacation property or foreign property we need to know!!!

 

If you sold your personal residence you need to supply us with the date of acquisition and the gross sale price.

 

If it was anything other than your personal residence, please talk to one of the partners or staff

 

  • If you started or stopped renting a property that you owned, we need to know!!!

 

CRA is now requiring you to report any or all of the above on your 2016 personal tax returns and subsequent years in order to claim the principal residence exemption.  You do not have to pay tax on any capital gain when you sell your house if it was your principal residence for all the years you owned it and you did not use any part of it to earn income.

 

 TFSA  

 

  • Starting January 1, 2016, the annual TFSA dollar limits for 2016, 2017 and 2018 are $5,500 for each year.

 

RRSP Deduction Limit

 

  • The maximum RRSP contribution limit for 2017 is $26,010. It increases to $26,230 for 2018. You can start making RRSP contributions for the 2017 tax year as early as January 1, 2017 (March 1, 2018 is the deadline).
  • Please provide us with any contribution receipts made in the first 60 days of 2018. These amounts do not necessarily need to be deducted from income in 2017, but they do need to be reported in that year and can be carryforward to the following year.

Repeated failure to report income penalty

  • If you failed to report an amount on your return for 2017 and you also failed to report an amount on your return for 2014, 2015, or 2016, you may have to pay a federal and provincial/territorial repeated failure to report income penalty. Under proposed changes, if you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.
  • As a result of the proposed changes, the federal and provincial or territorial penalties are each equal to the lesser of:
  • 10% of the amount you failed to report on your return for 2017; and
  • 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.

It is imperative that you let us know if you hold any Foreign Property at any time in 2017 with a total cost of more than CAN $100,000. 

Foreign property includes:

  • Shares of foreign corporations held in Canadian brokerage accounts
  • Shares of Canadian corporations held by foreign brokers
  • Foreign mutual funds
  • Precious metals held outside Canada and
  • Foreign bank accounts.

Foreign property does NOT include:

  • Property held primarily (more than 50%) for personal use
  • Holdings in Canadian mutual funds or registered accounts (RRSP, RRIF, TFSA).

The CRA has implemented changes to Form T1135 for the 2015 and subsequent tax years. The changes will allow taxpayers who held specified foreign property with a total cost amount of less than $250,000, throughout the year, to report under a new simplified reporting method rather than providing the detail of each such property.

 

The above are some quick points that we believe should be brought to your attention.  Get the full letter at www.turack.ca.

PLEASE USE OUR PERSONAL TAX CHECKLIST UNDER INFO CENTRE

 

 

 

 

TURACK RAGUSEO LESTI GILLIATT INC.


 PERSONAL TAX LETTER FOR 2017 TAX YEAR

 SYNOPSIS

 

 January 2018

 

 This letter is to provide you with a quick look at the changes for the 2017/2018 tax years.  Please visit our website at www.turack.ca to see the complete tax letter or contact us should you have any concerns.

 

 REPORTING THE SALE OF YOUR PRINCIPAL RESIDENCE  **PLEASE TAKE NOTE**

 

  • Starting with the 2016 tax year and each year thereafter, if you or your spouse sold ANY real estate including your personal residence, cottage, vacation property or foreign property we need to know!!!

 

If you sold your personal residence you need to supply us with the date of acquisition and the gross sale price.

 

If it was anything other than your personal residence, please talk to one of the partners or staff

 

  • If you started or stopped renting a property that you owned, we need to know!!!

 

CRA is now requiring you to report any or all of the above on your 2016 personal tax returns and subsequent years in order to claim the principal residence exemption.  You do not have to pay tax on any capital gain when you sell your house if it was your principal residence for all the years you owned it and you did not use any part of it to earn income.

 

 TFSA  

 

  • Starting January 1, 2016, the annual TFSA dollar limits for 2016, 2017 and 2018 are $5,500 for each year.

 

RRSP Deduction Limit

 

  • The maximum RRSP contribution limit for 2017 is $26,010. It increases to $26,230 for 2018. You can start making RRSP contributions for the 2017 tax year as early as January 1, 2017 (March 1, 2018 is the deadline).
  • Please provide us with any contribution receipts made in the first 60 days of 2018. These amounts do not necessarily need to be deducted from income in 2017, but they do need to be reported in that year and can be carryforward to the following year.

Repeated failure to report income penalty

  • If you failed to report an amount on your return for 2017 and you also failed to report an amount on your return for 2014, 2015, or 2016, you may have to pay a federal and provincial/territorial repeated failure to report income penalty. Under proposed changes, if you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.
  • As a result of the proposed changes, the federal and provincial or territorial penalties are each equal to the lesser of:
  • 10% of the amount you failed to report on your return for 2017; and
  • 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.

It is imperative that you let us know if you hold any Foreign Property at any time in 2017 with a total cost of more than CAN $100,000. 

Foreign property includes:

  • Shares of foreign corporations held in Canadian brokerage accounts
  • Shares of Canadian corporations held by foreign brokers
  • Foreign mutual funds
  • Precious metals held outside Canada and
  • Foreign bank accounts.

Foreign property does NOT include:

  • Property held primarily (more than 50%) for personal use
  • Holdings in Canadian mutual funds or registered accounts (RRSP, RRIF, TFSA).

The CRA has implemented changes to Form T1135 for the 2015 and subsequent tax years. The changes will allow taxpayers who held specified foreign property with a total cost amount of less than $250,000, throughout the year, to report under a new simplified reporting method rather than providing the detail of each such property.

 

The above are some quick points that we believe should be brought to your attention.  Get the full letter at www.turack.ca.

 

 

 

 

TURACK RAGUSEO LESTI GILLIATT INC.


Virtually no one looks forward to dealing with the need to file a tax return each spring, and while some of that reluctance is undoubtedly due to the complexity of our tax system, there’s another factor at work.

Many (even most) taxpayers don’t know, until they have actually completed their return for the year, whether additional taxes will be owed. And, no matter what the taxpayer’s financial circumstances, finding out that money is owed to the tax authorities is bad news.


The reach of Canada’s system is broad – residents of Canada are taxed on their world-wide income, and the income or capital amounts that escape the Canadian tax net are few and far between.

One of the most significant of those exceptions, particularly for individual Canadian taxpayers, is the “principal residence exemption”. Plainly put, when a Canadian taxpayer sells his or her home, the proceeds of sale are not included in his or her income for the year (and therefore not taxed), no matter how much that home has appreciated in value since it was acquired. And, of course, given the real estate market conditions that have prevailed in recent years, especially in some urban centers, the difference between the original cost of the family home and its later sale price can be very substantial.


While everyone knows that the best results are obtained when tax and financial planning take place on an ongoing basis, the reality is that most Canadians focus on their tax situation only once a year, at tax filing time. And the harsher reality is that, by then, the opportunity to take steps which will make a significant difference in one’s tax liability for 2017 is lost.


The rules surrounding income tax are complicated and it can seem that for every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2017 must be remitted to the Canada Revenue Agency (CRA) on or before Monday, April 30, 2018. No exceptions and, absent extraordinary circumstances, no extensions.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.