Well as we star...

Well as we start a new year most people are starting to evaluate the year that just past. Considerations of how they will adjust will start to be become the focus.




Five tips to focus at work


When was the last time you were reading a draft and your phone buzzed? While writing your last email, were you distracted by an incoming email notification? How many times in the last week did a co-worker interrupt you mid-task? Be honest.

Office workers are interrupted (or self-interrupt) every three minutes, according to a recent study at the University of California. What is worse is it can take up to 23 minutes for a worker to return to the original task. No wonder it’s so hard to get work done. And while our ability to juggle work is necessary, multitasking is a weakness, not a strength. A 2009 study at Stanford University found that frequent multitaskers not only underperformed when compared to nonmultitaskers, they also used their brains less effectively when they focused on a single activity.

So how do we avoid all these evil attention seeking, unnecessary task and make sure we accomplish what we should be accomplishing on the day itself? Our minds are easily wavered and affected and it becomes extremely hard to realign your focus with goals at job task.


1. Work in small segments

It’s a scientific fact that our brains can only be attentive on a limited amount of information for a limited amount of time. Making sure the appropriate information in mind is the one that lines up with our duties at work is where the difficulty is. To lighten the load on your brain, it is better to segment your work into small manageable pieces. The idea is you do not want to spend an entire day working on one task non-stop. Breaking it up allows your brain to ‘breathe’ and it will reward you later with effective work.

2. Take a minute to reward yourself

It’s not really a bad thing to visit sites like Facebook, Meebo, or Twitter to get your social updates, but this should never be done especially when your work is not complete. What I tend to do is create a set of tasks that I need to complete before I can visit any of those sites or leave my desk. I will work awhile, complete a task, then reward myself with some time catching up with a friend. This strategy relies on sheer perseverance and strong will. If you cant stick to goals that you set try another one of these methods.

3. Find the right Music

As for me there is no way that I can push through an entire work day of coding or designing without the appropriate music to keep me motivated. For me its either intense techno or alternative music that sustains me throughout the day. I can be wrong about this but I believe its important that whatever genre you decide to listen to, to make sure its music that can be easily filtered out while keeping the work ethic at full throttle.

4. Try to be interested and passionate about your work.

Finally the best way to be productive is to truly enjoy and be passionate about what your working on. We go to great lengths and hours of work for things that interest us. Yet we lose focus instantaneously if what we are doing is not important. It might take sometime finding interest in the work you do, you might have to just think about the big picture or maybe focus on impressing those around you (possibly a boss) to stay on track.

5. Keep a low profile.

Often times co-workers simply want to stop by your office and tell you about their day. While this is usually a nice chance to keep up with each others lives, it can happen at an time that is inappropriate. When work deadlines become pressing, it is a good practice to schedule time in your calendar that prevents bookings. During those times set your phone to do not disturb and close your office door. This will allow you to complete the tasks at hand.
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Are Tough Times...






Are Tough Times Ahead?

All the economic indicators tell us that we are still looking at some tough trading times ahead.

In that regard, we have prepared a "Tough Times Business Checklist" which we hope you will find useful as you look at ways to keep your business successful in this environment.

Please review the ideas we have presented and talk to us about how we can help you with implementation. We have helped a number of clients recently to control their costs and maintain their revenue base.

What is really important is that you take steps now to make sure your business is "ship shape and Bristol fashion".

Please let me know how we can help.

Best regards

Trevor Gough, BComm, CGA
[Ascend Financial Certified General Accountant]

P.S. Take action now to preserve the health of your business




Tough Times Practice Management - Immediate Action Plan No Action Item Completed
1. Review your Budgets and set targets for 2014.
2. Get rid of can‟t pay/won‟t pay clients.
3. Bill out Work in progress on a daily basis.
4. Review debtors list and chase up overdue bills.
5. Offer existing debtors extended payment terms and/or discounts.
6. Establish a fee-funding facility (for example Premium Credit).
7. Make sure your invoices contain explicit payment terms.
8. Assign responsibility to one individual for billing and collections.
9. Agree extended payment terms with all suppliers in advance.
10. If appropriate, review banking facilities and discuss future needs.
11. Put extra effort into making sure your relationships with your better clients are solid.
12. Focus more on what your client's revised needs are.
13. Detail the services you can provide you clients during tough times 
14. Publicise to your clients that these services are available
15. Review and flow chart the main processes in your office (e.g. accounts and tax production) and challenge the need for each step.
16. Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
17. Use „bottom up‟ budgeting where everyone in the office gives input on areas over which they have control – target a 10% cost saving.
18. Review your staffing needs over the next 12 months and make weak or unnecessary individuals redundant now.
19. Get your members of staff involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
20. Review your list of services and eliminate those that are unprofitable or not core services
21. Establish your key performance indicators (KPI‟s) and measure them on a daily basis (e.g. daily charge time –v- budget)
22. Review efficiency of office processes and consider alternatives such as outsourcing certain activities locally or overseas.
23. Pull everyone together and explain firm‟s strategy and get their buy-in.
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PERSONAL TAX &n...

PERSONAL TAX  UPDATES 2013


MEDICAL EXPENSES - TRAVEL

In a November 8, 2012 Tax Court of Canada case, CRA disallowed as a medical expense $14,883 of travel costs related to 101 round trips that Mr. Jordan made from Weyburn to Regina to assist his wife in recovering from an aneurysm. 

Taxpayer wins

The Court allowed the deductions on the basis that they were incurred while his wife was receiving medical treatment and, therefore, should not be restricted to just the initial trip from Weyburn to Regina.

DISABILITY TAX CREDIT

In a December 18, 2012 Tax Court of Canada case, the Court determined that the Appellant was not entitled to a Disability Tax Credit for the 2010 taxation year in respect of her diagnosis under Attention Deficit-Hyperactive Disorder and DSM-IV Learning Disability.

The Court noted that there is no doubt that the difficulties experienced by the Appellant are not insignificant, however, they are not sufficiently serious to meet the definition of mental or physical impairment required to claim the credit.

MOVING EXPENSES AND REIMBURSEMENTS

When taxpayers move, they commonly incur significant costs, many of which are deductible as moving expenses, including:

· Transportation and storage costs (packing, hauling, in-transit storage and insurance) for possessions and household contents;

· Reasonable travelling costs (vehicle expenses, meals, accommodation) to move you and your family;

· Temporary living costs near the old or new location (meals, accommodation) for up to 15 days;

· Lease cancellation costs;

· Temporary home costs while trying to sell your vacant residence (interest, property taxes, insurance premiums, heat and utilities) after you have moved out to a maximum of $5,000;

· Transaction costs of selling of your old house (real estate commissions, advertising, legal fees, and mortgage penalties);

· Transaction costs of buying a new house (legal fees and land transfer taxes excluding GST/HST) if the old house is sold due to the move;

· Costs incidental to the move (connecting and disconnecting utilities, changing legal documents such as a driver's license or automobile registration).



EMPLOYMENT INCOME

102(2) 

TAXABLE BENEFIT - EMPLOYER PROVIDED MOTOR VEHICLES REQUIRED TO BE TAKEN HOME AT NIGHT

It was noted by the CRA in Income Tax Technical News No. 40 (June 11, 2009), that travel from home to the office for some employer provided motor vehicles may still be considered taxable benefits even if the vehicles are required to be taken home and prohibited from any other personal use.

It should be noted that when calculating the benefit, the use of these vehicles is not considered personal if the employee proceeds directly from home to a point of call or returns home from that point of call.

RENTAL OF TOOLS AND MOTOR VEHICLE

In a November 29, 2012 Technical Interpretation, CRA indicates that they may consider rental payments made to an employee for the use of his or her vehicle and tools to be income from employment, and not from property, on the basis that the payments are received by virtue of an employer/employee relationship.

DOOR PRIZES

In a February 4, 2013 Technical Interpretation, CRA was asked about door prizes received by attendees at a company social event where every attendee received a door prize.

CRA indicated that their tax-free $500 gifts and awards policy would apply to gifts received by the employee, the employee's spouse, and any other non-arm's length person.

The questioner suggested that gift cards may be given.  CRA noted these near cash gifts would not be included under their gifts policy.  Therefore, the value would be taxable to the employees.  CRA referred to the detailed discussion of their gifts and awards policy at www.cra.gc.ca/gifts.





102(3)

SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT (SR&ED)

In an October 25, 2012 Tax Court of Canada case, the Court found that CRA had incorrectly denied SR&ED expenditures of $387,000 in 2008.  CRA unsuccessfully argued that the company was only reproducing existing technology when it incurred expenses to develop a new Heating, Ventilation, and Air Conditioning system for multi-storey residential townhomes.

The Court found for the taxpayer on the basis that the Company had to make modifications to the system to make it work at the level necessary for commercial success.

This means that CRA will have to look at SR&ED claims in their entirety and not try and break them down into component sections as they have done in the past.

SALE OF FAMILY HOMES

In a September 6, 2012 Tax Court of Canada case, the taxpayer was a police officer who had three unreported sales of family homes built in 2004, 2005 and 2007 in which CRA assessed business income of $31,068, $44,729 and $29,872 and also assessed gross negligence penalties.

For the three properties, the ownership period between the date of purchase of the land and the date listed for sale varied between 67 and 110 days.

Taxpayer loses

The Court found that these homes were acquired and built with the intention of selling and were, therefore, business income and, that there was gross negligence in not reporting the income.

BUSINESS/PROPERTY INCOME

2013 FEDERAL BUDGET

102(4)

Some of the provisions in the 2013 Federal Budget include:

First-Time Donor's Super Credit (FDSC)

Budget 2013 proposes a temporary FDSC providing an additional 25-per-cent tax credit for a first-time donor on up to $1,000 of donations. 

A first-time donor will be entitled to a 40-per-cent federal credit for donations of $200 or less, and a 54-per-cent federal credit for the remaining portion, not exceeding $1,000.

An individual will be considered a first-time donor if neither the individual nor the individual's spouse or common-law partner has claimed a Charitable Donation Tax Credit in any taxation year after 2007.

The FDSC will be available in respect of donations of cash made on or after Budget Day (March 21, 2013) and may be claimed only once in the 2013 through 2017 tax years.

Taxes in Dispute and Charitable Donation Tax Shelters

Budget 2013 proposes to allow the CRA to collect 50 per cent of the disputed tax, interest or penalties where an objection has been filed with regards to a disallowance of a deduction or tax credit claimed in respect of a tax shelter that involves a charitable donation.  Normally, collection action cannot be taken while amounts are under objection or appeal.

This measure will apply in respect of amounts assessed for the 2013 and subsequent taxation years.

Leveraged Insured Annuities (LIA) and 10/8 Arrangements

A LIA involves the use of borrowed funds in connection with a lifetime annuity and a life insurance policy, both of which are issued on the life of an individual.

A 10/8 Arrangement generally involves the borrowing of funds secured by a life insurance policy, or investment account under the policy, whereby the rates on the loan and the investment are tied to each other.

Budget 2013 proposes to eliminate unintended tax benefits by introducing rules for "LIA policies" and "10/8 arrangements".

Budget 2013 also proposes to alleviate the income tax consequences on a withdrawal, from a policy relating to a 10/8 arrangement, if the withdrawal is made before January 1, 2014.

Restricted Farm Losses (RFL)

Budget 2013 proposes to codify the chief source of income test whereby other income must be subordinate to farming in order for farming losses to be fully deductible against income from those other sources.

Budget 2013 also proposes to increase the RFL limit to $17,500 of deductible farm losses annually, being the first $2,500 loss plus half of the next $30,000.

These measures will apply to taxation years that end on or after Budget Day.

The Canada Job Grant

Businesses with a plan to train Canadians for an existing job or a better job will be eligible to apply for a Canada Job Grant.  The Grant will provide access to a maximum $5,000 federal contribution per person towards training at eligible training institutions.

As there are various bodies involved, negotiations must still take place to finalize the detailed design of the Grant.

Extension and Expansion of the Hiring Credit for Small Business

Budget 2013 proposes to expand and extend for one year the temporary Hiring Credit for Small Business.  This credit would offset up to $1,000 of the increase in an employer's 2013 Employment Insurance (EI) premiums over those paid in 2012.  Only employers with total EI premiums of $15,000 or less in 2012 qualify.

Stop International Tax Evasion Program

The CRA will pay rewards to individuals providing information on major international tax non-compliance to the CRA of up to 15 per cent of federal tax collected if reassessments exceed $100,000 in federal tax.

Canada - U.S. Information Exchange & FATCA

Budget 2013 confirms the Government is engaged in negotiations with the U.S. for an agreement to enhance reciprocal information exchange under the Canada - United States Tax Treaty.

The agreement would include information exchange provisions in support of the United States Foreign Account Tax Compliance Act provisions.



OWNER-MANAGER REMUNERATION

102(5)

DIRECTOR LIABILITY

In an October 16, 2012 Tax Court of Canada case, the issue was whether the Appellant, as a director of the corporation, was personally liable for the unremitted GST of $2,512.

Taxpayer wins

The Court noted that he had effectively lost control over the corporation's affairs.

It was also noted that the individual is not necessarily personally liable if external constraints (such as psychological, economic and social control) were such that a reasonable person who was a victim of the same control would have done nothing.



ESTATE PLANNING

102(6)

ESTATE PLANNING

It is commonly advised that the RRSP/RRIF holder designate a beneficiary of the plan.  Advantages of this approach include:

· The funds transfer directly, avoiding probate.

· The status as a "refund of premiums" requires no elections.  Refunds of premiums allow a tax-deferred transfer of funds.

· Reporting on transfers to a surviving spouse or common law partner can be avoided.

· The funds are not exposed to liabilities of the deceased's Estate.

· It avoids the risk that a beneficiary will not sign the election, thereby requiring the Estate to pay tax on the account value or, that the opportunity is overlooked entirely by the Executor.

However, there may be advantages to leaving funds to the Estate itself, such as:

· Enhanced planning opportunities, as the elections can be used to determine the precise amounts to be reflected as a "refund of premiums", or reported on the terminal tax return.  

· The elections can also be used to allow the Executors flexibility to determine how any "refund of premiums", and other assets, will be allocated between eligible beneficiaries.  This could be used to direct the "refund of premiums" to lower income beneficiaries and/or beneficiaries best able to utilize rollovers while directing other assets to other beneficiaries.

· Funding a Testamentary Trust.  This may be especially desirable if no "refund of premiums" and/or rollovers are available (or if the plan holder does not want that amount of funds left to those beneficiaries).

Professional advice may be needed in this area.

DEFERRING OLD AGE SECURITY (OAS)

A person may defer receiving the OAS pension by not applying for it at age 65.  The pension amount will be increased by .6% per month of deferral after your 65th birthday or July 1, 2013, and stays in effect until your 70th birthday.

It also appears that a person that turns 65 before July 1, 2013 could consider delaying the receipt of OAS payments for up to five years beyond the 65th birthday.  However, the OAS increase of .6% per month will not commence until July 1, 2013.



WEB TIPS

102(7)

FINANCIAL CONSUMER AGENCY OF CANADA (FCAC) 

The FCAC is an independent body working to empower Canadians to expand their consumer education in the financial sector.

FCAC operates a website, www.fcac-acfc.gc.ca/eng/index-eng.asp, with a host of information on various financial products and services available in Canada such as mortgages, credit cards, insurance products, and other banking services.

Consumer education on the site comes in the form of toolkits and calculators, written commentary, pamphlets, and questions and answers, all of which are fairly simple to use and understand.  The website also provides an area devoted to education about fraud.

In addition, it provides direction for consumers on launching complaints against various federally regulated financial institutions and payment card network operators. 

As the FCAC is an independent body, information bias is reduced. 



GST/HST

102(8)

INPUT TAX CREDITS (ITCs) - TRAVEL ALLOWANCES

In a January 17, 2013 Tax Court of Canada case, ITCs of $126,339 were claimed with regards to travel allowances paid to employed sales representatives for the estimated number of kilometers driven.

Taxpayer loses

The Tax Court noted that:

1. The allowances paid were based on an estimate of the kilometres to be travelled and not on the actual kilometres driven for business.

2. The Excise Tax Act (ETA) permits ITCs related to non-taxable allowances, however, the allowance must be based on the actual number of kilometres driven.

3. The requirements were not met, and the ITCs were not allowed.

DID YOU KNOW

102(9)

CAYMAN ISLANDS 

Effective September 1, 2012, the Cayman Islands have introduced a new 10% payroll levy on expatriates who earn more than $36,000 a year.  This would affect approximately 5,875 expatriates living and working in the Cayman Islands.













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Family Caregive...

Family Caregiver Amount (FCA).

If you have a dependent with an impairment in physical or mental functions, you may
be eligible to claim an additional amount of $2,000 for one or more of the following amounts:

 • spouse or common-law partner amount;
 • amount for an eligible dependent;
 • amount for children born in 1995 or later; and
 • caregiver amount.

The maximum amount for infirm dependents age 18 or older includes the additional amount of $2,000 for the FCA. The dependent with the impairment must be:

• an individual 18 years of age or older and dependent on you because of an impairment in physical or mental functions; or

• a child under 18 years of age, with an impairment in physical or mental functions. The impairment must be prolonged and indefinite and the child must be dependent on you for assistance in attending to personal needs and care when compared to children of the same age.

 You must have a signed statement from a medical doctor showing when the impairment began and what the duration of the impairment is expected to be. For children under 18 years of age, the statement should also show that the child, because of an impairment in physical or mental functions, is dependent on others for an indefinite duration. This dependence means they need much more assistance for their needs and care compared to children of the same age.

You can claim the FCA for more than one eligible dependent.

Please free to contact our office for further information at Ascend Financial 403-823-1212


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First-Time Dono...

First-Time Donor’s Super Credit (FDSC)

The 2013 budget proposes a temporary FDSC providing an additional 25-per-cent tax credit for a first-time donor on up to $1,000 of donations.

A first-time donor will be entitled to a 40-per-cent federal credit for donations of $200 or less,
and a 54-per-cent federal credit for the remaining portion not exceeding $1,000.

An individual will be considered a first-time donor if neither the individual nor the individual’s spouse or common-law partner has claimed a Charitable Donation Tax Credit in any taxation year after 2007.

As a first-time donor, the FDSC may be shared by you and your spouse or common-law partner in a particular taxation year. However, the total amount of donations that may be claimed under the FDSC by both individuals cannot exceed $1,000.

Only donations of money that are made after March 20, 2013 will qualify for the FDSC.
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