Leskun Son Accounting Ltd

Scientific Research & Experimental Development (SRED) – is it for you?!

dleskun — Tue, 03 Apr 2012 16:19:44 +0000

E=mc2....are you with me all you scientists?!

Ah, Science…. it conjures up pictures of a crazy, white-haired dude with beakers and potions and experiments. In our eyes, this is the type of person/business which might qualify for the Government’s “Scientific Research & Experimental Development” (SRED) tax credits. At one point, this may have been how it was….but this is not the case any more! The SRED credit program has really opened up over the last 5 to 10 years to include many different forms of work. Whether you are starting a project from scratch to create new and amazing gadgets or taking an already existing process or machine and improving on it. Look deep at the work you are doing and there may be something within your existing array of projects that may qualify for this amazing credit. You could be developing software, building machinery or on your way to interplanetary travel… you may just qualify! Our firm has had great success in assisting with the application process. Whether you do it alone, or use an expert to assist you, do NOT leave these credits on the table, or you may just miss out. There is a deadline for filing of 18 months past year end of the corporation or business and the CRA is very strict on enforcing this. Give me a call if you think you have something, it never hurts to ask…you may just be more of a Scientist than you thought!

Here is some interesting information from Video Tax News that may help you decide.

SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT (SR&ED):In December, 2011, CRA issued Guide RC4467 which notes that:

• In 2010 the SR&ED Program provided approximately $3.5 billion of tax assistance for over 21,000 claimants. Of these, 75% were small businesses.

• The SR&ED Program provides financial assistance through the form of refundable investment tax credits, and a reduction of taxes payable, or both.

• The SR&ED Program is available to any business operating and doing SR&ED in Canada. Any business that is involved in basic or applied research, or in developing new or improved materials, devices, products, or processes may be eligible under the SR&ED Program.

• To determine if your work meets the SR&ED requirements, see the CRA Eligibility Self-Assessment Tool at http://www.cra-arc.gc.ca/sred-assessment/.

• Also, CRA has a First Time Claimant Service; a Pre-Claim Project Review Service (provides a preliminary opinion on the eligibility of projects for SR&ED tax incentives); and the Account Executive Service(provides a designated contact person who will be available to answer your questions on SR&ED).

New Personal Tax Credit!

dleskun — Tue, 06 Mar 2012 19:52:18 +0000

There is a new Children’s Art Tax Credit (CATC), which is a non-refundable tax credit based on eligible expenses paid for the cost of registration of your child in a prescribed program of artistic, cultural, recreational or developmental activity. The CATC will let you claim eligible expenses of up to $500 per year for each of your children who are under 16 years of age at the beginning of the year in which the expenses are paid (similar to the Children’s Fitness Credit). See your Accountant for more details or check out the CRA website http://www.cra-arc.gc.ca/gncy/bdgt/2011/qa01-eng.html . Happy Tax Season!

Oh, what’s a girl (or guy) to do?

dleskun — Fri, 10 Feb 2012 21:26:24 +0000

MEDICAL EXPENSES -COSMETIC PROCEDURES
In an August 31, 2011 Technical Interpretation, Canada Revenue Agency (CRA) noted that medical expenses paid after March 4, 2010 for purely cosmetic procedures are ineligible for the Medical Expense Tax Credit (METC).
This generally includes surgical and non-surgical procedures purely aimed at enhancing an individual’s appearance, such as liposuction, hair replacement procedures, botulinum toxin injections, and teeth whitening. For a list of eligible medical expenses, see this CRA-Eligible Medical Expenses . The CRA does and will check any extraordinary medical expenses, so make sure you understand what can and cannot be used as a medical expense on your T1 Personal Income Tax Return BEFORE you file! If you have any doubt, check it out with your Accountant. Happy Tax Season!

Wow, another year almost over!

dleskun — Thu, 22 Dec 2011 22:41:39 +0000

and she gave birth to her firstborn, a son. She wrapped him in cloths and placed him in a manger, because there was no room for them in the inn.

Well, another year is come and almost gone. 2011 has been an amazing roller coaster of progress in both my personal and business life. It never ceases to amaze me that 365 days can go so fast, yet at times go so slow. When all is said and done, we can look back and see the good, the bad and all that was in between and reflect on those moments. I suppose this separates us from the animals, although I think they may have memory, they do not have the capacity to look back and remember. Through it all, I feel I have done my best as a father, husband, businessman, friend and son and I look forward to improving even more upon that in 2012. I am actually glad for the mistakes I have made because I learned from them. I am glad for the victories because that fuels me to go on. I am happy for the moments of peace which calm my soul. And I thank Jesus every day for the breath he puts in my body so that I can continue on! I want to thank all those who have been clients of Leskun & Son Accounting, we feel truly blessed to have you as part of our lives and to be able to work with you each year. I am humbled by the friendships I have formed and for the amazing wife and children I have. With 2012 quickly approaching, I will ready myself for for the excitement to come. I wish everyone a very Merry Christmas and a safe and happy New Year. See you in tax season!

Congratulations to our winner!

dleskun — Tue, 01 Nov 2011 21:55:14 +0000

I worked at the recent West Coast Women’s Show at the Abbotsford Tradex with my wife, Melody. We were there to promote her company, House Calls Health & Wellness, and at the same time give out information about my company, Leskun & Son Accounting. Part of the fun at our booth was a large vase that I had filled with beans, and people could, ”guess how many beans the ‘BEANCOUNTER’ has”. There were a lot of beans in there and it had taken my wife and I quite a while to count and then double check the number. The closest to the actual number of beans would win a $100 gift certificate to Choo Choo’s Restaurant in Langley, BC. I would have thought if someone came within a few hundred of the actual amount we would have a winner. On Monday morning, when we went through the guesses, we were surprised to find an entry ballot with a guess matching the EXACT number of beans in the vase, 7,777. Wow, what are the chances of that! Congratulations to Bethany N. of Abbotsford, BC for that amazing guess! We hope you enjoy your time at Choo Choo’s. Look for us next year and see how close you can come!

EI – should you be paying into it?

dleskun — Mon, 17 Oct 2011 18:39:43 +0000

EI REFUND?! If you are like many individuals in Canada who have shares in your own corporation, then more than likely, you and/or members of your immediate family probably work for this corporation. Are you paying into EI? You shouldn’t be…because likely you won’t be eligible to collect. A refund of Employment Insurance paid for non-arm’s length employees may be available upon application to CRA. Knowing the rules and regulations for the day to day events within your company is essential to the success of your business. Check with your accountant for details.

CRA Interpretation on Medical Expense Tax Credit (METC)- Cosmetic Surgery etc.

dleskun — Sat, 17 Sep 2011 13:05:20 +0000

CRA Interpretation on Medical Expense Tax Credit (METC)- Cosmetic Surgery etc.

With the increase in cosmetic surgery becoming more common over the past 10 years or so, it invariably begs the question as to whether or not the expense for such a surgery is a personal income tax deduction. This is a sensitive issue and has been argued many times by both sides. Recently the CRA released a interpretation of what they will or will not allow as an METC.

MEDICAL EXPENSE TAX CREDIT (METC) – COSMETIC PROCEDURES

In an April 4, 2011 Technical Interpretation, CRA notes that eligible medical expenses exclude amounts paid for purely cosmetic purposes, unless necessary for medical or reconstructive purposes.

CRA opined that expenditures such as liposuction, hair replacement procedures, botulinum toxin injections, and teeth whitening would generally not qualify for the METC. A cosmetic procedure will qualify for the METC if it is required for medical or reconstructivepurposes such as expenditures that would ameliorate a deformity arising from a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.

CRA notes that a general statement on a receipt indicating that the procedure was “not purely for cosmetic procedures” would not, by itself, be determinative. It may be necessary to provideadditional information to determine that a cosmetic procedure qualifies for the METC such as adescription of the nature and purpose of the procedure.

Now, this being said, interpretation is just that. This is the view of the CRA and each case must be looked at in its entirety before a decision can be made on the validity of such a claim. As with any issue surrounding income tax, if there is any doubt whatsoever as to what can and cannot be claimed… consult with your Accountant or Tax Advisor before proceeding. You can save yourself a lot of trouble in the end. http://www.leskunaccounting.com

Medical Expense Tax Credit

Are you considered “Common-Law” for Income Tax purposes?

dleskun — Mon, 22 Aug 2011 18:06:38 +0000

Hmmmm, common-law for income tax purposes? This question has been posed to me countless times over the years. It has been an area that has been a point of contention for many. The long and short of it is that it is NOT an option, if you are, then you MUST file that way. In an April 11, 2011 Technical Interpretation, Canada Revenue Agency (CRA) notes that a “common-law partner” means a person who cohabits in a conjugal relationship with the taxpayer and, either has cohabited with the taxpayer for a continuous period of at least one year, or is considered to be a “parent” of a child of whom the taxpayer is also a parent. This is relevant for income tax and other purposes. Among other things, the main reason the CRA gets so worked up about this is generally because when a child is involved, there are claims for tax credits that are made which benefit the taxpayer which should not be claimed if in a common-law relationship. What people fail to realize is that there are benefits to filing together as well, such as the establishment of your relationship for tax-free rollover of assets upon death and other aspects not always commonly known. If you are at all unsure as to the nature of your relationship for tax purposes, get advice. Staying on the right side of the CRA is in your best interest!

Employee vs. Subcontractor

dleskun — Tue, 02 Aug 2011 20:02:34 +0000

I get this question asked of me alot, “Am I an employee or a subcontractor?”. Like many things in life, this is not a simple answer. There are many factors to consider when determining this status for yourself or for someone working for your company. The Canada Revenue Agency expects each individual to understand the differences before making a decision. Following are some cases that recently went through the Tax Courts of Canada.

Case 1 – Independent Contractor

In an October 22, 2010 Tax Court of Canada case, given the clear shared common intention to be a subcontractor between the payer and the workers, the Court found that the workers wereindependent contractors, not employees.

Case 2 – Independent Contractor

In an August 31, 2010 Tax Court of Canada case, the issue was whether the salesman was anindependent contractor or engaged in employment income. The Court concluded that the salesperson was an independent contractor and noted that:

1. The worker had signed Written Agreements with the Appellant when he began his working relationship on the basis that he was an independent contractor.

2. The facts that apply in respect to establishing control, ownership of tools, possibility of profit, risk of loss, and integration show that the worker was an independent contractor.

3. No controls were exercised on his services and the worker had the opportunity to make a profitand took on a risk of a loss. He provided his own work tools and his own equipment. He had no job security and was free to accept other employment or contracts while engaged.

4. The test of intent also indicates that the worker was an independent contractor.

Case 3 – Independent Contractor

In a November 16, 2010 Tax Court of Canada case, the Court found that the workers wereindependent contractors, not employees, and noted that:

1. A mutual intention to create an independent contractor relationship indicates that the individuals were independent contractors, not employees.

2. The workers were able to set their own hours of work, although within certain limits.

3. The workers were able to work for other clients without consent of the payer.

4. The workers used their own vehicles to pick up supplies and charged an hourly rate for the use of their vehicles.

5. The workers carried on their business under a business name, for example, “Cleaning with Care”, and had their own liability insurance coverage.

Case 4 – Employee

In a November 22, 2010 Tax Court of Canada case, the Court found that the workers wereemployees and noted that:

1. The parties did not share a common understanding that the worker was to be self-employed and not an employee. Where the intention of the parties cannot be ascertained, it is necessary to look at all the facts to see the legal relationship.

2. The payer provided all the tools and equipment, except for a keyboard.

3. The worker had no responsibility for investment in management.

4. The worker had no expenses and no liability exposing her to a risk of loss and there was no opportunity for her to increase her income.

5. The worker received instructions and directions from the payer on a daily basis.

If you would like assistance with understanding the differences between employee and subcontract work, contact our office at 1-877-826-1219 or visit us on the web at http://www.leskunaccounting.com

O Canada, we need help with the rules!

New Things

dleskun — Fri, 29 Jul 2011 18:47:20 +0000

Life is full of seasons, and there is a time for everything. New things in life can be exciting or scary, good or bad, big or small, fun or boring, useful…. or not. Some people like change while some are vehemently opposed to it. I would say I am somewhere in the middle. I have tried raw eel before, but I won’t do it again. About 10 years ago, I started running which was new to me and although I knew I needed to so something (I was overweight and out of shape at the time), I thought there was no way I would like it. Well, turns out I ended up loving it after a year or two. Ten years later, I am in better shape, but also… well… ten years older. My knees are starting to go, I have lower and upper back pain and I can’t run as fast as I once did. I was feeling very disappointed and sad that each time I went out, I seem to injure myself further. I wanted to stay active but my body just didn’t want to agree with me. My wife asked me if I might enjoy biking since it would be easier on my knees and again I thought I wouldn’t like it. Low and behold, I love it! Remember when our parents used to say to us, “just try it, you might actually like it”, well this is so true! I am not saying this works for everything, I have tried many things that I did not like, but at least I know and at least I tried. My point is, when life throws you a curve-ball, which is usually just when you think you have it all figured out, a change can happen and the results can be surprisingly good. The other good change came from how I viewed certain types of doctors. Of course, with my knees and back hurting, I went reluctantly to my doctor who did what he could. When that didn’t work, I tried something else, and that didn’t work. I tried to change my stride and that didn’t work. With the pain in my back getting worse every day from sitting at a desk, I needed to find some relief. I have never been very open to alternative healing methods but when you don’t have any options left, you gotta do what you gotta do. I called up an old high school friend of mine who is now a Doctor of Acupuncture and threw caution to the wind. My first visit went well, my second even better. Surprise once again. Change in life is inevitable, some of it we can and need to fight, while other changes we need to roll with and you just never know where it might lead. My experience has opened me up to a broader way of thinking and a whole new enjoyable activity. “Try it, you just might like it!”

Ecclesiastes 3:1-8:

To every thing there is a season, and a time to every purpose under heaven:
A time to be born, and a time to die;
a time to plant, and a time to pluck up that which is planted;
A time to kill, and a time to heal;
a time to break down, and a time to build up;
A time to weep, and a time to laugh; a time to mourn, and a time to dance;
A time to cast away stones, and a time to gather stones together;
A time to embrace, and a time to refrain from embracing;
A time to get, and a time to lose; a time to keep, and a time to cast away;
a time to rend, and a time to sew;
A time to keep silence, and a time to speak;
a time to love, and a time to hate; A time of war and a time of peace.