Tax Tips at a Glance
 

Employees

April 30, 2007 is the last day to file without penalty

To avoid or minimize late charges, pay any taxes owing by April 30, 2007, even if you plan on filing later.

Everyone (including students) with earned income should file tax returns even if they don’t owe anything. The earned income will generate Registered Retirement Savings Plan (RRSP) contribution room, which can be carried forward indefinitely.

Ensure all foreign reporting forms are filed on time to avoid penalties.

Delinquent tax filings may be done via the voluntary disclosure program.

U.S. individual tax returns are due on April 16, 2007.

Childcare expenses, safety deposit fees, charitable donations, political contributions and medical expenses qualify for tax deductions if they were made before the end of 2006.

All deductible alimony or maintenance payments can be claimed if they were paid by the end of 2006.

Tax credits are available relating to the interest portion of qualifying student loan payments made in 2006.

Canada Education Savings Grant (CESG) for RESP contributions is permitted, equal to 20 per cent of annual contributions for children (maximum $400 per child, per year) – higher amounts are available for those with lower incomes.

Have the higher-income spouse incur all household expenses and have the lower-income spouse acquire the investments, so that the investment income will be taxed at a lower rate.

Some tax credits that cannot be used by a lower income spouse may be transferred to the higher income spouse.


For further information about taxes, contact a Chartered Accountant.

Brought to you by the Institute of Chartered Accountants of Ontario.



Additional Tips for the Self-Employed

The deadline to file tax returns is June 15, 2007 but reporting income is based on the calendar year. (To avoid being charged interest, make the payment by
April 30, 2007)

A refund of Employment Insurance (EI), paid for non-arm’s length employees, may be available upon application.

Accelerate purchases of depreciable assets.

Deduct half of Canada Pension Plan (CPP) contributions, to a maximum of $1,910.70

Tax preparation fees may be deductible.

Premiums paid under a Private Health Services Plan (limits apply) are tax deductible, if certain conditions are met.

Consider lending money to your spouse or child with annual interest payable at the prescribed rate. Earnings in excess of these rates will be included in their earned income.


For further information about taxes, contact a Chartered Accountant.

Brought to you by the Institute of Chartered Accountants of Ontario.



Brought to you by the Institute of Chartered Accountants of Ontario.