• Client Portal
  • Upper Tantallon902.820.8000
  • Hammonds Plains902.835.5000

A Summary of CRA Areas of Focus Where Applied to Personal Tax

Personal tax returns are filed on a self-assessment basis. A taxpayer must be prepared to substantiate all claims made on their return. Each year a number of personal returns are selected by CRA for post-assessment review. This process involves a request for information by CRA after which it will determine if the claims made by the taxpayer are legitimate. Bluenose Accounting handles these reviews for our personal tax clients, and some clients are unaware that their return was even reviewed. Our policy is to obtain most, if not all, of the necessary information at the time of filing so as to minimize any inconvenience for our clients later if their return is selected. Some claims are regularly reviewed, such as moving expenses. However, below are some new areas of focus by CRA.

Foreign tax credits: Individuals who earn income from outside of Canada and who have paid tax to another country are able to reduce their Canadian tax otherwise payable by an amount up to the amount of foreign tax paid. The amount of the allowable deduction depends on the tax treaty in effect between Canada and the foreign country. CRA has reviewed a high percentage of these claims. The taxpayer must prove amounts paid by providing copies of their foreign returns and the assessments thereof. All foreign-language returns and assessments must be translated into English or French. Some jurisdictions, such as the United Kingdom, have a tax filing period that does not match ours, making this process even more challenging. This is a complex area of personal tax.

Massage therapy: Amounts paid to medical practitioners such as dentists, nurses, and others are deductible. The difficulty comes in that to qualify as a medical practitioner, the rules of the jurisdiction in which the service is being performed must be considered. Unfortunately, massage therapists are not considered medical practitioners in Nova Scotia, and thus massage therapy is not deductible for residents of this province. We have seen this allowed in some cases but not in others.

Accounting fees: Fees paid for tax preparation, including those paid to our firm, are deductible as business expenses, rental expenses, employment expenses, and otherwise only if there is a significant amount of non-registered investment activity. Accounting fees are not deductible for individuals who have none of the above aspects to their personal tax filings. We are following this guideline.

Claims for children: Many claims for children, including child-care expenses, fitness, and even the amount for an eligible dependant, are being examined more carefully. CRA now requires a SIN for any child for whom a claim is made. If this is not available, CRA often accepts a copy of the birth certificate. We recommend that you apply for a SIN for any children who do not currently have one. Please provide this to us if claiming any amounts for children.

Spousal support: Any claim for spousal support should be supported by a court order or a written agreement. However, we have found that CRA is cross-referencing the payer’s and payee’s returns. We have had to request a letter from the recipient confirming receipt of the support payments. When there are both spousal support (deductible) and child support (non-deductible) payments, CRA applies any payments first to meet the child-support obligation and only allows a deduction for spousal support for amounts paid in addition to the child support.

Filed in:
Authors
PREVIOUS
What the Federal Liberal Government Might Mean for You
NEXT
Federal Budget - 2016

Categories

Privacy Policy

Bluenose Accounting (the “Firm”) is committed to maintaining the confidentiality, security and accuracy of your personal information. The Firm collects uses and discloses personal information related to its clients and employees to the extent required to provide requested services for those clients, to fulfill its professional responsibilities and operate its business. We are committed to protecting the privacy of information in our possession and control. To that end, the Firm has established a Privacy Policy to protect the privacy rights of its clients, employees and others. The Firm’s Privacy policy sets out principals and guidelines it follows in order to meet its privacy commitments and complying with provincial and federal privacy legislation. This policy relates to the collection, use and disclosure of personal information by the firm, its partners and employees.

What is Personal Information?

The firm defines personal information as any information that the firm receives as a part of servicing individuals, or indirectly, through clients that are organized as corporations, not-for profit organizations, charities or other like organizations in addition to information related to its employees and partners. Such information would include, but is not limited to, names, addresses, telephone number, age, sex, marital status, identifying numbers, education status and medical history. A more detailed definition can be found in the Freedom of Information and Protection of Privacy Act of Nova Scotia. The Firm only collects information required to provide the services requested and agreed upon. Such information is contained as required within filings with government agencies or as part of its working papers as required by professional standards, rules of professional conduct and regulation.

The Firm’s Commitment

The Firm has established and put into place policies and procedures designed to protect personal information. The firm has communicated to its partners and employees its policies with respect to privacy and has established responsibilities for all individuals with access to private information. The firm has designated Anthony Fielding Ph.D., CA (anthony@bluenoseaccounting.com) as its Privacy officer.

Consent

Information provided to us, including that collected from our website, is used solely for the purpose of the service(s) indicated and is often, but not always, set out in its engagement letter. Should you advise us at any time that you no longer consent to the use of the personal information that you have provided to us, we will take your information off our database.

Safeguards

The Firm protects the privacy of personal information in its possession by using security safeguards appropriate to the sensitivity of the information. Such safeguards include physical restriction (locked premises and security systems) and electronic protection (password protection and encryption).

Legal Disclaimer

Although we make every effort to preserve user privacy, we may need to disclose personal information when required by law when we have a good-faith belief that such action is necessary to comply with a current judicial proceeding, a court order or legal process.

Other Use of Your Information

Except as set out in this Privacy Policy, we do not make any other use of the personal information which you provide to us unless you have consented to its use for any other purpose. We do not sell or disclose your personal information to anyone, except as required by law.

Website

In using our website, you consent to the collection, use and disclosure of your personal information in accordance with this Privacy Policy.

×

Terms of Use

Terms of Use

The use of this web site is governed by the terms and conditions as set out below. By using this web site, you have agreed to be bound by these terms.

Copyright

The information contained within this site, including the underlying HTML, text, images and any other content is the property of Bluenose Accounting (the “Firm”). Any reproduction or redistribution of content of this site without the express written permission of the Firm is strictly forbidden.

Disclaimer

The information provided in this site is free of charge and is for information purposes only. Such information should not be relied upon or used as a basis for decisions. The Firm has made all efforts to maintain the accuracy of the content of this web site. Information provided on this web site is provided without any warranties of any kind. The Firm assumes no responsibility or liability for damages that may arise from the use of this site or of any information contained within.

External Links

The Firm may provide external links to third party sites and some content provided on this site may actually be from third party sites. The Firm assumes no liability for the accuracy of third party information contained within this site or in those reached through links contained within this site. Any links are provided for information purposes only and are not to be construed as an endorsement by the Firm. The Firm has not reviewed or otherwise attempted to verify the accuracy of information contained within such sites.

The Firm assumes no responsibility or liability for damages that may arise from the use of these links including any computer security issues such as, but not limited to, viruses, Trojan horses or other disruptive code which may be downloaded or transferred from such linked sites.

Acknowledgement

By using this site, you are agreeing to the terms and conditions as set out above. Any use of information contained within this site is not to be construed as professional advice and the use of such information does not relieve you from applying the standard of care and due diligence relevant to the use of such information contained in this web site. You are solely responsible for verifying the accuracy and reliability of all information contained within this web site.

×