Transcript: Taxes (April 13, 2000) | Apr 13, 2000

Maureen Taylor sits in a studio with yellow walls and a small TV set in the background, which reads “More to life.”

Maureen is in her late thirties, with wavy blond hair in a bob. She’s wearing a purple blazer and a tan and purple scarf.

Maureen says HI,
I'M MAUREEN
TAYLOR.
TODAY ON “MORE TO LIFE,” A
DEADLINE IS LOOMING.
YOUR TAXES ARE DUE IN JUST
OVER TWO WEEKS.
TAX EXPERT LORN KUTNER IS
HERE TO TELL US WHAT WE NEED
TO KNOW.

(music plays)

The opening sequence shows different sets of hands performing activities on a wooden table such as pulling petals from a daisy, drawing a big red heart, tuning a violin, flipping through the pages of a book, cooking, and pouring a glass of red wine.
In animation, the title appears inside the shape of a house: “More to life.”

Then, Maureen reappears in the studio.

Maureen says WELCOME TO “MORE
TO LIFE.”
MANY OF US CONSIDER IT WORSE
THAN A VISIT TO THE DENTIST,
FILLING OUT INCOME TAX
FORMS.
WELL, LORN KUTNER IS HERE
TO HELP EASE THE PAIN.
HE'S A CHARTERED ACCOUNTANT
WITH MINCE AND PARTNERS AND
OUR RESIDENT TAX EXPERT.
WITH THAT APRIL 30th
DEADLINE APPROACHING FAST
AND FURIOUSLY, YOU PROBABLY
HAVE QUESTIONS ABOUT
EVERYTHING FROM TAX CREDITS
TO TAX SHELTERS AND MORE.
SO DON'T HESITATE.
GIVE US A CALL.
IN TORONTO, OUR NUMBER
IS 416 484-2727. CALL US TOLL
FREE IF IT’S LONG DISTANCE.
1-888-411-1234 AND YOU CAN E-MAIL
YOUR QUESTION TO MORETOLIFE@TVO.ORG
AND LORN,
WELCOME BACK.
HI.

Lorn says HI.

A caption reads “Lorn Kutner. Accountant.”

Lorn is in his mid-forties, with short wavy brown hair and a moustache. He wears glasses, a dark brown suit, pale green shirt and striped tie.
Maureen says SO APRIL 30th
FALLS ON A SUNDAY.

Lorn says MM-HMM.

Maureen says SO DO WE HAVE TO
GET EVERYTHING IN BY FRIDAY
BECAUSE THAT'S THE BUSINESS
DAY?

Lorn says NO, THE
EXACT OPPOSITE.
WE HAVE AN EXTRA DAY.
MONDAY MAY 1st, MIDNIGHT.

Maureen says IS THE ACTUAL
DEADLINE?

Lorn says YES, IT'S
EXTENDED WHEN IT FALLS ON A
WEEKEND.
WHICH IS NOT GREAT FOR ME, I
WOULD RATHER HAVE IT BE
FRIDAY AND HAVE THAT WEEKEND
OFF --

Maureen says YOU'LL BE
WORKING YOU FIGURE?

Lorn says I IMAGINE
I'LL SHOW MY FACE IN THE
OFFICE.

Maureen says WHAT HAPPENS
WHEN YOU KNOW YOU HAVE
CLIENTS WHO STILL HAVEN'T
GOT ALL THEIR STUFF TO YOU?
DO YOU START GETTING ANXIOUS
FOR THEM?

Lorn says NO, I NEVER
GET ANXIOUS AROUND THEM.
I GET ANXIOUS AROUND APRIL
28th, 29th.
THERE'S PLENTY OF TIME AT
THIS POINT AND NOBODY HERE
OR OUT THERE SHOULD BE
PANICKING AT ALL.
THERE'S LOADS OF TIME.
IT'S LIKE AN ETERNITY
BETWEEN NOW AND MAY 1st.
SO THERE'S PLENTY OF TIME.
DON'T PANIC.
DOAN GET FRUSTRATED AND TAKE
THE POSITION THAT OH, I'LL
WAIT UNTIL AFTER THE TIME.
I'LL DO IT IN MAY AND JUNE,
WHAT HAPPENS IS IT BECOMES
JUNE AND JULY, AUGUST AND
STEP SEPTEMBER, AND BEFORE
YOU KNOW IT A YEAR'S GONE BY
AND I SEE THAT A LOT DURING
THE YEAR.
PEOPLE COME IN AND SAY I
HAVEN'T DONE MY TAXES FOR
TWO YEARS.
WELL WHY NOT?
AHH, THIS AND THAT.
AND THEN WHEN YOU DO IT,
THEY HAVE REFUNDS.
UNFORTUNATELY THE
GOVERNMENT'S HAD THE USE OF
THAT MONEY FOR ALL THAT
PERIOD OF TIME.

Maureen says AND THEY'RE
MISSING OUT ON
INTERESTING --

Lorn says ABSOLUTELY.

Maureen says BUT IF YOU OWE
MONEY YOU SHOULD BE WORRIED.

Lorn says RIGHT.
IT'S IMPORTANT TO GET IT IN
BY MIDNIGHT ON MAY 1st
BECAUSE IF YOU OWE MONEY AND
HAVEN'T FILED AT THAT TIME
THERE'S AN IMMEDIATE PENALTY
OF 5 percent FOR BEING A MINUTE
LATE AND THEN 1 percent EVERY MONTH
FOR A YEAR, SO MAXIMUM IS
LIKE 17 percent, AND INTEREST ON
ALL OF THAT AS WELL.
SO IT'S REALLY BAD IF YOU
OWE AND YOU FILE LATE.
EVEN IF YOU DON'T HAVE
ANYTHING.
BETTER TO FILE AND THEN GET
IT IN AND THEN IF SOMETHING
COMES IN LATER OR YOU HAVE
TO CHANGE IT, YOU'LL CHANGE
IT BUT THAT WAY YOU AT LEAST
AVOID THE PENALTY.

Maureen says WHAT ARE THE
IMPORTANT TAX CHANGES FOR
1999?

Lorn says THERE
REALLY HASN'T BEEN MANY.
IN THE TAX COMMUNITY IT'S A
BORING YEAR.

Maureen says OH.

Lorn says I MEAN, YOU
KNOW, YOU HEAR IN THE PRESS,
IN THE LAST BUDGET THAT
TAXES ARE COMING DOWN, AND
THAT'S ALL VERY BUOYANT
AND ENCOURAGING, BUT IN
TERMS OF SPECIFIC CHANGES
THAT ARE REALLY INTERESTING,
VERY LITTLE.
YOU KNOW, THE PERSONAL
EXEMPTION IS UP A LITTLE
BIT.
THE CHILDCARE EXPENSE FOR
CHILDREN SEVEN AND UNDER,
AND OVER, IS UP A LITTLE
BIT.
BUT IN TERMS OF KIND OF
THINGS THAT ARE NEW AND
EXCITING, NOTHING REALLY.

Maureen says NOW WHAT ABOUT
THE '99 FEDERAL BUDGET THAT
ELIMINATED THAT GENERAL 3 PERCENT
SUR TAX?
DOES THAT APPLY FOR NEXT
YEAR OR THIS YEAR?

Lorn says NO, THAT
APPLIES NOW.
THERE'S ACTUALLY THE RECENT
BUDGET, FEBRUARY 2000 ALSO
CHANGED THE SURTAX STRUCTURE
BUT THAT CHANGE APPLIES
RIGHT NOW IT WASN'T A BIG
CHANGE.
IT'S KIND OF A GRADUAL
CHANGE, BUT WHEN YOU'RE
DOING YOUR FARM AND YOU'RE
EITHER DOING IT ON SOME
SOFTWARE OR DOING IT BY HAND,
IT'S ALL FACTORED INTO THE
CALCULATIONS.

Maureen says IT IS, EH?
IS THERE A CUT-OFF FOR THAT?
DO PEOPLE WITH INCOMES OVER
65,000--

Lorn says YEAH,
THEY'RE UNAFFECTED BY IT.

Maureen says OH.
WHAT ABOUT PEOPLE UNDER A
CERTAIN AMOUNT?

Lorn says THE BREAK
IS REALLY ABOUT FIFTY.
UNDER FIFTY IT'S ELIMINATED,
BETWEEN FIFTY AND SIXTY-FIVE
IT GRADUALLY GETS PHASED OUT
AND OVER 65,000 DOLLARS OF
INCOME --

Maureen says WHY DID MARTIN
GET RID OF THAT?

Lorn says THE SURTAX
WAS REALLY BROUGHT IN TO
BATTLE THE DEFICIT.
THAT'S EXACTLY WHAT IT WAS
MEANT TO DO.
THEY PROMOTED IT THAT WAY,
AND IT'S NOT HERE ANYMORE.
SO THERE WAS A LOT OF
PRESSURE TO GET RID OF IT.
PROBLEM IS IT'S A BIG INCOME
GENERATOR FOR THE GOVERNMENT
SO IT'S HARD TO JUST TURN
AND GET IT OFF RIGHT AWAY
BECAUSE IT'S BILLIONS OF
DOLLARS.
SO IN THAT BUDGET AND THE
MORE RECENT ONE, THERE'S A
GRADUAL ELIMINATION OF IT
FOR EVERYBODY.
SO THEY STARTED FIRST WITH
LOWER INCOME FAMILIES, AND
TAXPAYERS, AND GRADUALLY ARE
GOING TO SPREAD IT ACROSS
THE BOARD TO EVERYBODY.

Maureen says OKAY.

Lorn says BUT LONGER
TERM.

Maureen says IF I'M NOT
MISTAKEN, I READ SOMETHING
YESTERDAY THE AUDITOR
GENERAL ACTUALLY SAID THAT
REVENUE CANADA'S 1-800
NUMBER OR WHATEVER THAT
PEOPLE CALL FOR HELP WAS NOT
VERY GOOD AT OFFERING ADVICE
AND SOMETIMES THERE WAS NO
ONE THERE.

Lorn says NO.
WELL, THERE'S SOMEONE THERE.
IT MAY RING FOR A LONG TIME,
MIND YOU, AND YOU MAY WAIT
AND LISTEN TO THEIR
SELF-PROFESSING --

Maureen says THEIR MUSIC.

Lorn says RIGHT, AND
“HEY, WE'RE CANADA, WE'RE
YOUR FRIEND.”
BUT WHEN THEY ANSWER, IT
DEPENDS ON THE NATURE OF THE
QUESTION.
IF THE QUESTION IS A
RELATIVELY EASY-TYPE
QUESTION, WHERE DO I GET A
FORM?
WHAT DOES THIS NUMBER MEAN,
THEY CAN ANSWER IT.
BUT IF YOU'RE ASKING A
TECHNICAL QUESTION, SAYING
HERE'S MY TRANSACTION AND
HOW SHOULD I REPORT IT?
THEY MAY NOT BE THE BEST
PEOPLE TO ASK AND YOU SHOULD
PROBABLY BE SEEKING
PROFESSIONAL ASSISTANCE FOR
SOMEONE WHO REALLY
UNDERSTANDS TAX AND IS MAYBE
MORE ON YOUR SIDE THAN
REVENUE CANADA'S SIDE.
I'M NOT SAYING THAT THEY'RE
GOING TO DO SOMETHING
DISHONEST, BUT THERE'S TWO
SIDES TO EVERY STORY.
REVENUE CANADA WILL ONLY
ANSWER BASED ON THEIR
INTERPRETATION BUT THERE MAY
BE SOME GREYNESS TO THE
ISSUE.

Maureen says I SEE.
SEEK AN ACCOUNTANT'S ADVICE
THEN.
I KNOW I NEEDED TO KNOW,
FROM MY NOTICE OF ASSESSMENT
LAST YEAR, MY R.R.S.P. ROOM,
COULDN'T FIND LAST YEAR'S
ASSESSMENT SO I CALLED THE
NUMBER --

Lorn says FOR THAT,
IT'S FINE.
THEY'LL PUNCH YOUR SOCIAL
INSURANCE NUMBER INTO THE
COMPUTER AND OUT IT'LL COME
AND THEY'LL CONFIRM THE
NUMBER FOR YOU.
OR INSTALMENTS.
IF YOU CAN'T FIND YOUR
INSTALMENT CONFIRMATION,
THEY'LL DEAL WITH THAT
QUESTION.
I'M MORE DEALING WITH THE
QUESTION, I SOLD MY FARM
THIS YEAR AND IT'S KIND OF A
BIT DICEY IF YOU'RE RELYING
ON THEM FOR ADVICE.

Maureen says ALL RIGHT, WE'RE
TALKING TAXES THIS AFTERNOON
WITH LORNE KUTNER, A TAX
ACCOUNTANT SO IF YOU'RE
STILL WITH THE PENCIL AND
CALCULATOR FIGURING OUT WHAT
YOU OWE AND YOU HAVE A
QUESTION, HERE'S A CHANCE TO
GET SOME FREE ADVICE.
IN TORONTO, OUR NUMBER
IS 416 484-2727. CALL US TOLL
FREE IF IT’S LONG DISTANCE.
1-888-411-1234 AND YOU CAN E-MAIL
YOUR QUESTION TO MORETOLIFE@TVO.ORG
AND WE'VE GOT AN
E-MAIL QUESTION.
IT'S INTERESTING.
THIS IS FROM JIM IN
PEMBROKE.
MIGHT BE MY COTTAGE
NEIGHBOUR.
RESIDENTS HERE IN THE OTTAWA
VALLEY ARE REQUIRED TO FILE
THEIR TAX RETURNS IN
SHAWINIGAN QUEBEC.
THEY RESENT THIS, SINCE
QUEBEC HAS ITS OWN REVENUE
SYSTEM AND WOULD NEVER ALLOW
THEIR TAXES TO BE TIMED IN
ANOTHER PROVINCE.
MY QUESTION FOR LORNE IS DO
THE RES DENS OF THE OTTAWA
VALLEY IN EASTERN ONTARIO
HAVE THE LEGAL RIGHT TO
REQUEST THAT THEIR TAX
RETURNS BE FILED IN AN
ONTARIO OFFICE SUCH AS
SUDBURY?

Lorn says INTERESTING
QUESTION.
IT IS A LEGAL QUESTION AND I
DON'T KNOW THE ANSWER.
MY GUT FEELING IS NO.
I THINK THAT NO MATTER WHERE
THIS INDIVIDUAL IS GOING TO
FILE THEIR RETURN, EVEN IF
THEY POSTED IT TO SUDBURY,
WHERE WE FILE OUR RETURN,
IT'LL ULTIMATELY GET OPENED
AND REROUTED TO WHERE IT'S
SUPPOSED TO GO.
BECAUSE THE COUNTRY'S
DIVIDED UP BASED ON
POPULATION, AND THE LOADS AT
THE VARIOUS TAX OFFICES.
SO IF ALL THE PEOPLE IN
QUEBEC WERE -- ALL THE
NATIONALIST PEOPLE IN QUEBEC
THAT WERE UNHAPPY TO FILE IN
SHAWINIGAN WANTED TO FILE IN
ONTARIO IT WOULD BE AN
OVERLOAD TO THE ONTARIO
DISTRICT OFFICES.
SO I'M SYMPATHETIC TO THE
E-MAILER'S COMMENTS.
YOUR COTTAGEMATE.
BUT UNFORTUNATELY I THINK
THAT IT'S THE TYPE OF THING
THAT HE SHOULD JUST SORT OF
TOW THE LINE.

Maureen says IS HE RIGHT?
ARE QUEBECKERS DEALT WITH
VERY DIFFERENTLY IN THE TAX
SYSTEM --

Lorn says RIGHT.
UNLIKE THE OTHER PROVINCES
QUEBEC IS THE ONLY PROVINCE
THAT HAS THEIR OWN SEPARATE
TAX SYSTEM.
THE ONTARIO AND ALL THE
OTHER PROVINCE'S TAX SYSTEM
IS BASED ON THE FEDERAL SO
YOU CALCULATE YOUR TAXABLE
INCOME, AND ONTARIO IS A
PERCENTAGE OF THE FEDERAL
TAX.
WHERE QUEBEC HAS A TOTALLY
DIFFERENT FORM AND YOU
CALCULATE THEM TOTALLY
SEPARATE, AND IN QUEBEC, FOR
EXAMPLE, THERE MAY BE
CERTAIN DEDUCTIONS THAT ARE
ALLOWED THAT AREN'T ALLOWED
FOR FEDERAL PURPOSES AND
VICE VERSA.
SO THE QUEBECKERS ARE REALLY
FILING TWO RETURNS.
AND BOTH RETURNS WILL GET
FILED LIKELY IN QUEBEC.
CERTAINLY WITH THE QUEBEC
RETURN, FOR SURE, WOULD BE
FILED IN QUEBEC.
THE FEDERAL ONE MAY BE FILED
DEPENDING ON WHERE THE
PERSON LIVE THE IN THE
PROVINCE.
BUT THE INTERESTING THING IS
THAT THE PROVINCES HAVE NOW
BEEN GIVEN THE POWER BY THE
FEDERAL GOVERNMENT, IF THEY
WANT TO, TO MOVE AWAY FROM
THE CURRENT SYSTEM.
SO QUEBEC WANTED TO DO THAT
A LONG TIME AGO, AND SOME OF
THE OTHER PROVINCES WANT TO
IMPLEMENT THEIR OWN TAX
INCENTIVES AND TAX IDEAS TO
PROVIDE TAX RELIEF OR MAYBE
THEY WANT TO EVEN GO THE
OTHER WAY AND TAX CERTAIN
TYPES OF TAXPAYERS.
SO THEY'VE BEEN GIVEN THE
OPPORTUNITY TO PREPARE THEIR
OWN TAX SYSTEM.
WHICH WILL MEAN THAT THEY'RE
GOING TO HAVE TO COLLECT THE
TAXES.
BECAUSE RIGHT NOW THE
FEDERAL GOVERNMENT COLLECTS
BOTH THE FEDERAL AND THE
PROVINCIAL, EXCEPT FOR
QUEBEC AND THEN SENDS THE
MONEY AROUND.

Maureen says IS ONTARIO
TALKING ABOUT DOING THIS?

Lorn says THEY'RE
TALKED ABOUT IT.
I THINK THEY'RE PROBABLY
PROVINCE THREE OR FOUR THAT
HAVE BEEN TALKING ABOUT IT.
SOME OF THE WESTERN
PROVINCES HAVE BEEN TAKING A
MORE ACTIVE ROLE BUT IT'S
GOING TO BE A COUPLE OF
YEARS.
YOU CAN'T JUST SAY ALL OF A
SUDDEN OKAY, FEDS, DON'T
COLLECT THE MONEY, WE'LL
COLLECT IT IT'S GOING TO
TAKE A WHILE.
AT LEAST A COUPLE YEARS.

Maureen says THANK YOU FOR
THE QUESTION.
JULIE IS IN TORONTO.
HI JULIE.

Julie says HI MAUREEN.
I HAVE QUESTION FOR YOUR
GUEST.
I'M WONDERING, IF A PERSON,
THEIR INCOME IS FROM ONE
MAIN SOURCE, YOU KNOW, ON
STAFF SOMEPLACE, BUT THEN
THEY TAKE TIME OFF TO DO
WORK, SAY -- WELL NOT EVEN
TIME OFF, PERHAPS ON
VACATION, A LONG VACATION,
CAN YOU DEDUCT ANY -- CAN
YOU HAVE DEDUCTIONS AS IF
YOU WERE A FREELANCER AT
THAT POINT?
YOU KNOW, SORT OF STATIONERY
AND TRAVEL AND THINGS LIKE
THAT?

Lorn says SO WHEN YOU'RE TAKING
TIME OFF YOU'RE ACTUALLY
FREELANCING IN SOME OTHER --
NOT JOB LIKE AS IN
EMPLOYMENT JOB BUT YOU'RE
DOING WORK FOR SOMEBODY ELSE
AS AN INDEPENDENT
CONTRACTOR?

Julie says RIGHT.

Lorn says YOU CAN
TAKE DEDUCTIONS THAT RELATE
SPECIFICALLY TO THAT INCOME
YOU'RE EARNING AS AN
INDEPENDENT CONTRACTOR.
YOU COULDN'T TAKE DEDUCTIONS
THAT APPLY TO YOUR
EMPLOYMENT INCOME.
IT'S ONLY IF YOU, FOR
EXAMPLE, WERE DOING SOME --
SAY SOME CHILDCARE FOR LONG
WEEKENDS AND YOU WERE
BRINGING CHILDREN INTO YOUR
HOUSE, YES, YOU WOULD REPORT
THE INCOME AND YOU WOULD
TAKE DEDUCTIONS SPECIFIC TO
TAKING CARE OF THOSE
CHILDREN.
FOOD, MAYBE A PORTION OF THE
HOME, TRAVEL, SOME GAS, ET
CETERA.
BUT YOU WOULDN'T BE ABLE TO
DEDUCT THAT AGAINST YOUR
EMPLOYMENT, ONLY DEDUCT THAT
SPECIFICALLY AGAINST THE
INCOME THAT YOU'RE
FREELANCING

Maureen says OKAY, SO DO
YOU HAVE TO EARN INCOME AS A
FREELANCER TO MAKE
DEDUCTIONS?
I HEARD YOU HAD A LITTLE BIT
OF TIME.

Lorn says WELL FIRST
OF ALL THERE ARE DEDUCTIONS
AVAILABLE TO EMPLOYEES, BUT
THEY'RE VERY RESTRICTIVE.
SO FREELANCERS DO HAVE A BIG
ADVANTAGE -- WHEN I SAY
FREELANCERS, I'M TALKING
ABOUT PEOPLE WHO ARE
CARRYING ON SOME BUSINESS.
THEY HAVE THE ABILITY AND
MUCH GREATER SELECTION TO
DEDUCT CERTAIN EXPENSES, BUT
THEY HAVE TO BE, AGAIN,
RELATED TO THAT BUSINESS.
AND YOU DON'T EVEN HAVE
TO -- YOU'RE NOT LIMITED TO
THE INCOME.
LIKE YOU COULD THEORETICALLY
IN THE EARLY YEARS BE
CREATING LOSSES FROM THAT
BUSINESS AND SHELTERING,
USING THOSE LOSSES TO
SHELTER YOUR OTHER INCOME,
WHETHER IT'S INVESTMENT OR
PENSION INCOME OR EMPLOYMENT
INCOME.
BUT REVENUE CANADA WILL OVER
A PERIOD OF TIME LOOK TO SEE
THAT THERE IS SOME, WHAT
THEY CALL “REASONABLE
EXPECTATION OF PROFIT.”
YOU'RE IN BUSINESS FOR TEN
YEARS AND YOU'VE GOT LOSSES
FOR TEN YEARS, THEY MAY TAKE
A POSITION YOU'RE NOT REALLY
IN BUSINESS.
THIS IS MORE OF A HOBBY.
AND THEY MAY DISALLOW THOSE
LOSSES FOR ALL THOSE YEARS.
SO THEY UNDERSTAND IN THE
EARLY YEARS, IN THE
FORMATIVE YEARS OF CARRYING
ON A BUSINESS THERE MAY BE
SOME INITIAL LOSSES BUT THEY
WOULD LOOK FOR PROBABLY
AFTER YEAR TWO OR THREE TO
SEE SOME INCOME BEING
REPORTED SO YOU GOT TO BE
CAUTIOUS.

Lorn says I KNOW MY
ACCOUNTANT ENCOURAGES ME TO
DO SOMETHING -- WRITE
ARTICLING FOR -- ARTICLES
FOR NEWSPAPERS OR MAGAZINE,
BUT HE WANTS ME TO DO THAT
BECAUSE THERE WOULD BE MORE
OPPORTUNITY FOR DEDUCTIONS.

Lorn says ABSOLUTELY.
THINGS LIKE HOME EXPENSES,
YOUR MORTGAGE AND PROPERTY
TAXES AND INSURANCE AND
THINGS LIKE THAT ARE
NORMALLY PERSONAL EXPENSES.
YOU CAN'T DEDUCT THEM.
HOWEVER IF YOU HAVE A SIDELIGHT
BUSINESS, WRITING ARTICLE,
AND YOU WRITE THE ARTICLES
IN YOUR HOME --

Maureen says AT HOME ON YOUR
COMPUTER --

Lorn says EXACTLY,
THEN MAYBE YOU COULD ISOLATE
THAT ROOM AS YOUR OFFICE
RELATING TO THAT BUSINESS
AND YOU CAN NOW DEDUCT A
PORTION OF YOUR MORTGAGE AND
YOUR PROPERTY TAXES AND YOUR
INSURANCE AND ETCETERA,
ETCETERA, ETCETERA.
AND WRITE OFF OVER A PERIOD
OF TIME YOUR COMPUTER AND
MAYBE SOME OF THE FURNITURE IN
THAT ROOM AND DEDUCT THOSE
EXPENSES IN TOTAL AGAINST
THE INCOME THAT YOU'RE
GENERATING FROM THE WRITING
OF THESE ARTICLES.

Maureen says GOT IT.
OKAY, JULIE, HOPE THAT
HELPS.
THANKS.
MARYAN IS IN LONDON.
HI.

Maryan says HI.
I HAVE TWO QUICK QUESTIONS.
THE FIRST IS REGARDING MY
HUSBAND AND I ARE BOTH
GRADUATE STUDENTS AND WE
HAVE TWO CHILDREN.
WE ARE BOTH TEACHING
ASSISTANTS AND WE RECEIVE
ANOTHER SCHOLARSHIP ON TOP
OF THAT.
BUT MY CONCERN IS THAT WE
HAVE TUITION SCHOLARSHIPS,
NO MONEY EXCHANGES HANDS, WE
JUST DON'T HAVE TO PAY
TUITION.
HOWEVER THIS REALLY ADDS TO
OUR GROSS INCOME.
SO IT SAYS ON PAPER WE MADE
IS A LOT MORE THAN WE
ACTUALLY DID, AND WHICH NOW
SEEMS TO DISQUALIFY US FOR
THINGS LIKE CHILD TAX
CREDITS AND STUFF.

Lorn says YEAH.
UNFORTUNATELY THE WAY IT
WORKS IS THAT YOU HAVE TO
INCLUDE IT BEFORE YOU CAN
DEDUCT IT.
AND I'M ASSUMING YOU'RE
GETTING SLIPS OF SOME SORT
WHICH REPORT THE INCOME FROM
THESE SCHOLARSHIPS.

Maryan says YES.
IT COMES OFF AS A T-4.
LIKE AS IF WE GOT -- BUT WE
DIDN'T ACTUALLY, THEY
ACTUALLY DIDN'T GIVE US
ANY --

Lorn says NO, I UNDERSTAND BUT
UNFORTUNATELY THE WAY THE
SYSTEM WORKS IS YOU HAVE TO
INCLUDE IT IN YOUR TOTAL
INCOME CALCULATION AND THEN
DEDUCT IT OUT BELOW THE
LINE.
AND EVEN THOUGH ON A NET
BASIS THAT REPRESENTS
EXACTLY HOW IT IS ON A CASH
BASIS, UNFORTUNATELY THE
INCOME LOOKS TO BE INFLATED
BECAUSE YOU'RE GIVING IT
BACK ANYWAYS IN THE FORM OF
TUITION.
AND BECAUSE YOUR INCOME IS
SOMEWHAT INFLATED, AS THE
CALLER HAS MENTIONED, A
NUMBER OF THE CREDITS, GST,
CHILD TAX CREDIT, ETCETERA,
ARE PERHAPS GROUND DOWN,
BECAUSE THOSE ARE BASED ON
INCOME LEVELS OF THE FAMILY.

Maureen says BUT SHE'S DONE
IT RIGHT --

Lorn says SHE'S DONE
IT CORRECTLY, THAT'S JUST
THE WAY THE SYSTEM WORKS.

Maureen says DID YOU HAVE
ANOTHER QUESTION?

Maryan says YEAH, REALLY
QUICKLY.
ABOUT WRITING, SINCE I
GRADUATED IN JANUARY I PUT
TOGETHER A BOOK PROPOSAL,
I'M WORKING ON A NOVEL AND
THAT SORT OF THING.
NOW IF I DON'T GET PUBLISHED
AND DON'T MAKE ANY MONEY CAN
I STILL WRITE SOMETHING OFF?

Lorn says YOU COULD
TRY, BUT AGAIN I CAUTION YOU
BASED ON THE DISCUSSION I
WAS HAVING WITH MAUREEN
BEFORE, IS THAT REVENUE
CANADA MAY LOOK AT THAT AND
SAY WELL, THAT WAS REALLY
KIND OF LIKE A HOBBY.
EVEN THOUGH YOU MAY SAY NO,
IT WASN'T.
I WAS REALLY MAKING A
LEGITIMATE ATTEMPT TO
PUBLISH A BOOK, THEY MAY
LOOK AT IT AS A HOBBY.
IT MAY BE A ONE-OFF TYPE
THING WHERE YOU TRIED IT,
DIDN'T WORK AND NOW YOU
MOVED ONTO SOMETHING ELSE.
LEGITIMATELY IT SOUNDS LIKE
IT WOULD BE A BUSINESS
VENTURE, AND YOU SHOULD BE
ABLE TO DEDUCT YOUR EXPENSES
RELATED TO IT.
BUT BE PREPARED, AND IT
DEPENDS ON THE TYPE OF
PERSON YOU ARE, AS TO
WHETHER OR NOT YOU WANT TO
GO TO BATTLE WITH THEM IF
THEY HAPPEN TO REVIEW IT,
AND WHETHER OR NOT YOU WANT
TO TAKE THE ISSUE TO EVEN
COURT TO THE EXTENT THAT YOU
CAN'T RESOLVE IT WITH
REVENUE CANADA.

Maureen says YEAH, AND IF
SOME DAY SHE GETS PUBLISHED
SHE CAN COME BACK TO THEM
AND SAY I TOLD YOU!

Lorn says THEN YOU
CAN GO ON THE PAPERS AND GO
TO “MORE TO LIFE” AND TELL
YOUR STORY.

Maureen says YEAH, TELL YOUR
STORY.
GOOD LUCK MARYANNE, THANKS.
CAROL IS IN MISSISSAUGA.
HELLO, CAROL.

Carol says GOOD AFTERNOON.
I WONDERED IF YOUR GUEST
THIS AFTERNOON IS AWARE AND
CAN HELP ME HE IN TERMS OF A
CHARITABLE DONATION
DEDUCTION ON MY FORM.

Lorn says RIGHT.

Carol says I UNDERSTAND THAT
THERE IS A CHARITABLE
DONATION OF 1200 DOLLARS EVERY SIX
YEARS BECAUSE OF THE FOOD
INDUSTRY.
ARE YOU AWARE OF THIS?
DO YOU KNOW WHERE I'M GOING?

Maureen says NO.

Lorn says NO.

Carol says ALL RIGHT, THERE
IS.
THERE WAS AN ARTICLE IN ONE
OF THE TRADE PAPERS FOR FOOD
MANUFACTURERS THAT THERE IS
A HIDDEN TAX -- NOT TAX,
EXCUSE ME.
A HIDDEN COST IN THE PRICE
OF FOOD IN ORDER TO SELL TO
OUR JEWISH POPULATION IN
TERMS OF KOSHER PREPARATION
OF FOOD.
AND EVERY SIX YEARS REVENUE
CANADA ALLOWS A DEDUCTION OF
1200 DOLLARS TO COVER THOSE HIDDEN
COSTS THAT ARE PASSED ONTO
THE CONSUMER.
ARE YOU AWARE OF THAT AND DO
YOU KNOW ANYTHING ABOUT IT?

Lorn says NEVER HEARD
OF IT.
AND I'M -- I'M NOT SAYING
IT'S NOT TRUE, I'M SKEPTICAL,
BECAUSE IT'S NOT LIKE
REVENUE CANADA TO ALLOW
THAT.
DO YOU HAVE TO FILE A -- I
MEAN, NORMALLY TO GET A
CHARITABLE DONATION TO CLAIM
A CHARITABLE DONATION ON
YOUR TAX RETURN YOU NEED TO
HAVE A SLIP.
THEY DON'T ALLOW SERVICES,
THEY DON'T ALLOW FOOD OR
CLOTHING THAT YOU'VE GIVEN
IN.
IT'S GOT TO BE IN THE TERM
OF CASH THAT YOU'VE DONATED
OR SOMETHING, YOU'VE DONATED
A FRIDGE OR A TELEVISION,
AND THEN THEY'LL GIVE YOU A
RECEIPT.
AND THAT RECEIPT HAS TO BE
FILED WITH A TAX RETURN TO
BE ABLE TO CLAIM A
CHARITABLE DONATION CREDIT.
WHAT THE CALLER IS REFERRING
TO, IT DOESN'T SEEM TO BE TO
ME THAT YOU'D HAVE A
DONATION SLIP.
AND I'VE NEVER HEARD OF THIS
BEFORE AND IT WOULD BE
UNUSUAL THAT I WOULD NOT
HAVE HEARD OF IT.

Maureen says YEAH, I'M
SKEPTICAL, TOO.
WE SHOULD TALK, THOUGH,
ABOUT CHARITIES.
IS IT BEST TO SAVE YOUR
RECEIPTS FOR A PERIOD OF
TIME UNTIL YOU HAVE A
CERTAIN AMOUNT?
DOES THAT WORK IN YOUR
ADVANTAGE?

Lorn says AND THAT'S
WHERE I THOUGHT THE CALLER
WAS GOING BECAUSE THERE'S AN
INITIAL AMOUNT OF 200 DOLLARS A
YEAR THAT IS, THAT THE
CREDIT IS AT A 26 PERCENT RATE.
EVERYTHING OVER 200 DOLLARS IS
ROUGHLY AT A TOP RATE OR
50 PERCENT RATE SO WHAT MOST
PEOPLE DO IS IF YOU MADE A
200 DOLLAR CONTRIBUTION EVERY YEAR,
WELL IF YOU CLAIM THAT 200 DOLLARS
EVERY SINGLE YEAR YOU'LL
ONLY GET A CREDIT OF 26 PERCENT IN
YEAR 1999, 200, 2001.
BUT IF YOU SAVE THEM, AND
YOU HAVE FIVE YEARS TO USE
UP YOUR DONATIONS, IF YOU
SAVE THEM ALL, YOU NOW HAVE
A 1000 DOLLAR DONATION IN THE LAST
YEAR, AND YOU'D BE TAXED --
YOU GET A TAX CREDIT OF 26 PERCENT
ON THE FIRST 200 DOLLARS BUT A TAX
CREDIT OF 50 PERCENT ON THE OTHER
800 DOLLARS.
SO YOU WOULD BE AHEAD OF THE
GAME.

Maureen says TO SAVE THEM.

Lorn says TO SAVE
THEM.
BUT IT DEPENDS.
I MEAN WHAT YOU'RE GIVING UP
IS THE DOLLARS BACK TODAY.
I MEAN, YOU'RE SAVING THEM
UP BUT GETTING BETTER TAX
RELIEF.
I MEAN, YOU HAVE TO LOOK AT
HOW IMPORTANT IS THE TIME
VALUE OF MONEY TO YOU AND
HOW DESPERATE YOU ARE FOR
THE MONEY.

Maureen says BUT IF YOU'RE A
MARRIED COUPLE, IT DOESN'T
MATTER WHO MADE THE DONATION,
YOU CAN GIVE THE TAX CREDIT
TO THE OTHER PERSON.

Lorn says ANYBODY YOU
WANT.
AND YOU TYPICALLY WOULDN'T
IN NORMAL SITUATIONS SPLIT
THE DONATIONS, BECAUSE THEN
BOTH SPOUSES ARE USING UP
THAT FIRST 200 LOW TAX
CREDIT.
YOU WANT TO ACCUMULATE THEM,
PUT THEM ON ONE OF THE
RETURNS.
AGAIN IT DOESN'T MAKE A
DIFFERENCE IF ONE OF THE
SPOUSES IS MAKES 300,000 DOLLARS AND
THE OTHER IS MAKING 10,000 DOLLARS.
THE CREDIT IS IDENTICAL.
AND YOU MAY TO WANT PUT IT
ON THE SPOUSE THAT ACTUALLY
OWES TAXES, WHETHER IT'S THE
HIGH OR LOW INCOME SPOUSE.

Maureen says ALL RIGHT.
LET'S GO TO THIS E-MAIL FROM
LAURIE IN MISSISSAUGA.
OUR HEALTH INSURANCE COMPANY
ONLY COVERS A PERCENTAGE OF
OUR DRUG COSTS.
WE HAD 3500 DOLLARS IN
PRESCRIPTIONS LAST YEAR.
I ASKED THE INSURANCE
COMPANY TO RETURN OUR
ORIGINAL RECEIPTS SO WE
COULD CLAIM THE UNPAID
BALANCE ON OUR INCOME TAX.
THEY DIDN'T AND WON'T.
CAN I SUBMIT THEIR STATEMENT
INSTEAD, WHICH SHOWS THE
TOTAL COST AND HOW MUCH THEY
PAID?

Lorn says ABSOLUTELY.
ABSOLUTELY.
YOU CAN CLAIM A MEDICAL
EXPENSE CREDIT FOR THE
DIFFERENCE BETWEEN WHAT YOU
PAID AND WHAT THE INSURANCE
COMPANY REIMBURSED YOU FOR.
AND YOU WOULD NEED PROOF OF
THAT.
AND YOU DON'T NECESSARILY
NEED THE ORIGINAL
PRESCRIPTION NOTICE, YOU
NEED THEIR STATEMENTS WHICH
SHOW HERE'S YOU WHAT
SUBMITTED, HERE'S WHAT'S
ALLOWED, HERE'S WHAT WE'VE
REIMBURSED OR PAID DIRECTLY
TO THE PHARMACY, ETCETERA.
AND THE DIFFERENCE IS WHAT
YOU'RE ALLOWED TO CLAIM AS A
MEDICAL CREDIT ON YOUR TAX
RETURN.

Maureen says OKAY, NOW HERE
AGAIN.
IS REVENUE CANADA GOING TO
LOOK AT THE COMBINED INCOME
IN A FAMILY BEFORE THEY
DECIDE WHETHER TO ALLOW
THESE?

Lorn says NO.
MEDICAL CREDITS ARE BASED ON
THE INDIVIDUAL WHO'S
CLAIMING THEM.
SO IT'S BASED ON THE LOWER
OF TWO AMOUNTS.
NUMBER ONE IS A FLAT
THRESHOLD WHICH IS ABOUT
1,700 DOLLARS OR 1,800 DOLLARS AND 3 PERCENT OF
YOUR NET INCOME.
SO IF YOUR NET INCOME WAS
10,000 DOLLARS,3 PERCENT IS 300.
SO THE LOWER INCOME SPOUSE
IS THE ONE THAT YOU WOULD
WANT TO BE ABLE TO CLAIM THE
SPENDS BECAUSE YOUR
THRESHOLD IS LOWER AND HENCE
ANYTHING ABOVE THE THRESHOLD
YOU CAN GET CREDIT FOR.

Maureen says OKAY.
WHAT ARE SOME MEDICAL
EXPENSES THAT PEOPLE DON'T
THINK OF?

Lorn says MASSAGE
THERAPY.
PRESCRIPTIONS OBVIOUSLY --

Maureen says PHYSIOTHERAPY.

Lorn says PHYSIO.
ORTHODONTESTRY.
I HAVE TWO TEENAGED KIDS
THAT JUST FINISHED IT AND
THOSE ARE BIG BILLS.
BIG BILLS.

Maureen says YEAH, BUT COME
ON, DO YOU GET TO CLAIM THEM
WITH YOUR INCOME?

Lorn says IT HAS
NOTHING TO DO WITH MY
INCOME.
IT'S A QUESTION OF BETWEEN
MYSELF AND MY SPOUSE -- I'M
TALKING THE ORTHODONTIST IS
4,000 DOLLARS TO DO THREE YEARS
WORTH OF ORTHODONTICS.
IF YOU HAVE A RECEIPT IN A
PARTICULAR YEAR, YOU'D HAVE
TO -- THE THRESHOLD BEING
1600 DOLLARS, YOU'VE GOT IT
IMMEDIATELY RIGHT OVER NO,
MATTER WHAT YOUR INCOME
LEVEL IS SO PEOPLE FORGET
ABOUT -- EVEN DENTISTRY, YOU
FORGET ABOUT IT.
EVEN THOUGH A LOT OF THAT
GOES THROUGH INSURANCE, A
LOT OF TIMES YOU DON'T SEE
THE ORTHODONTRY WORK GO
THROUGH INSURANCE AND PEOPLE
FORGET ABOUT IT.
REMEMBER THAT IF YOU HAVE
FORGOTTEN ABOUT IT, YOU'RE
SITTING HERE IN APRIL OF
2000 DOING YOUR 1999 TAX
RETURN AND YOU SAY MY GOD!
MY KIDS HAD IN 1998, 1997,
GO BACK AND AMEND YOUR TAX
RETURN.
SEND THE RECEIPTS.
IF YOU DON'T HAVE THEM, CALL
UP YOUR ORTHODONTIST OR
YOUR --

Maureen says GET A PRINT OUT.

Lorn says GET A
PRINT-OUT, SEND IT IN.
THEY WILL ALLOW IT.
IT'S NOT TOO LATE.

Maureen says OKAY, LET'S GO
TO TRACEY IN OSHAWA.
HI TRACEY.

Tracey says HI.

Lorn says HI.

Tracey says I FORGOT TO
RECORD COMMISSION ON MY
TAXES AND I'VE ALREADY SENT
THEM IN AND IT DOESN'T
APPEAR TO HAVE AFFECTED ANY
OF THE CALCULATIONS.
I'M WONDER PHYSICAL I NEED
TO CORRECT IT OR NOT.

Lorn says THE ONLY
THING IT AFFECTS IS TO THE
EXTENT THAT YOU ARE CLAIMING
EMPLOYMENT-RELATED EXPENSES
AGAINST THAT COMMISSION?
WERE YOU DOING THAT?

Tracey says NO.

Lorn says OKAY, THEN
IT DOESN'T MAKE A
DIFFERENCE.
IT'S ALREADY INCLUDED IN
YOUR T-4 AMOUNT.
IT'S REPORTED IN A SEPARATE
BOX ON YOUR T-4, AND IF YOU
PUT IT IN IT WOULD SHOW UP
ON A LINE KIND OF TO THE
SIDE ON YOUR TAX RETURN NEAR
THE TOP OF THE FIRST PAGE.
BUT IT ONLY COMES INTO PLAY
TO THE EXTENT THAT YOU ARE
CLAIMING EXPENSES,
EMPLOYMENT-RELATED EXPENSES,
BECAUSE YOU'RE LIMITED TO
THE COMMISSION INCOME.
SO IF YOUR COMMISSION INCOME
IS 5,000 DOLLARS AND YOU HAD 8,000 DOLLARS
WORTH OF EMPLOYMENT-RELATED
EXPENSES YOU'D ONLY BE
ALLOWED TO DEDUCT 5,000 DOLLARS THOU
BUT IT'S NOT A CONCERN.

Maureen says NEEDS TO DO
NOTHING?

Lorn says ABSOLUTELY
NOTHING.

Maureen says THANKS, TRACEY.
CATHY'S IN MARKHAM.
HI CATHY.

Cathy says HI, I HAVE TWO
QUESTIONS.
FIRST ONE'S ON A CAREGIVER
AMOUNT.
I LIVE WITH MY PARENTS AND I
GET THE CAREGIVER AMOUNT
THING.
THAT JUST CAME IN 1998?

Lorn says YES.

Cathy says DO THEY HAVE TO
HAVE SOME SORT OF PHYSICAL
OR MENTAL DISABILITY IN
ORDER FOR ME TO CLAIM THIS
CREDIT?

Lorn says YES.
HER PARENTS.

Lorn says YES.

Cathy says OH, I THOUGHT IT
WAS JUST IF THEY'RE UNDER A
CERTAIN AMOUNT ON THEIR
INCOME.

Lorn says ARE THEY
LIVING WITH YOU?

Cathy says YES.

Lorn says OH, I'M
SORRY, I DIDN'T KNOW THEY
LIVED WITH YOU.
YES, IF THEY'RE LIVING WITH
YOU AND THEIR INCOME LEVELS
ARE BELOW THE THRESHOLD, AND
I DON'T REMEMBER WHAT THOSE,
YOU CAN CLAIM THE CAREGIVER
AMOUNT.

Cathy says SO THEY DON'T
HAVE TO HAVE ANY SORT OF
DISABILITY?

Lorn says NOT WHEN
THEY'RE LIVING WITH YOU.

Cathy says AND THIS IS
SOMETHING THAT CAN JUST GO
BACK TO 1998?

Lorn says YES, 98
WAS THE FIRST YEAR.

Cathy says AND PRIOR TO THAT
THEY HAD TO HAVE A
DISABILITY, I GUESS?

Lorn says WELL THE
CAREGIVER IS KIND OF AN
EXTENSION OF A WHOLE BUNCH
OF OTHER CREDITS THAT ARE
ALLOWED ON THE INCOME TAX
ACT.
DISABILITY CREDIT, MEDICAL
EXPENSE, ATTENDANT CARE,
THINGS LIKE THAT AND THEY
JUST KIND OF RE-HE DEFINED
THEM IN 1998, AND HIVED-OFF
THIS CAREGIVER AMOUNT SO IN
PRIOR YEARS YOU'D HAVE TO
LOOK UNDER THE RULES IN
EFFECT IN THOSE PRIOR YEARS
TO SEE IF THE CIRCUMSTANCES
APPLIED.
I DON'T KNOW OFF THE TOP OF
MY HEAD.
YOU'D HAVE TO SPEAK TO
SOMEONE ABOUT THAT.
BUT FOR '98, YES.

Maureen says AND YOUR OTHER
QUESTION, CATHY?

Cathy says THE OTHER IS I
WAS ON MATERNITY LEAVE FOR
HALF OF LAST YEAR, 1999, AND
PARTS OF MY E.I. GOT CLAWED
BACK.
I GUESS IF YOU'RE OVER
48,000 DOLLARS, PART OF IT GETS
CLAWED BACK.
BUT THIS YEAR I'M NOT
WORKING IS THERE ANYWAY I
CAN -- I DON'T KNOW, SPLIT
THE INCOME INTO ANOTHER
YEAR?

Lorn says NO.
IT SAID BE NICE, BUT
UNFORTUNATELY THEY LOOK AT
THE E.I. BEING PAID TO YOU
IN THE YEAR YOU RECEIVE IT
AND COMPARE THAT TO THE
INCOME YOU RECEIVED IN THE
YEAR YOU RECEIVED IT.
THEY DON'T DO AN AVERAGING.

Cathy says OAKS.

Maureen says ALL RIGHT, GOOD
LUCK, THANKS.

Lorn says ALTHOUGH
IT'S A GOOD SUGGESTION.
IT IS.

Maureen says WELL, FROM YOUR
LIPS TO THEIR EAR, RIGHT?

Lorn says EXACTLY.
ON MY WAY BACK TO THE OFFICE
I'LL MAKE A CALL.

Maureen says WHAT IS INCOME
SPLITTING THOUGH?
WHAT IS THE TRUE DEFINITION?

Lorn says THAT IS
LEGITIMATE TAKING A PORTION
OF INCOME THAT YOU WOULD
NORMALLY BE REPORTING ON
YOUR TAX RETURN AND
SPLITTING IT WITH TYPICALLY
FAMILY MEMBER WHOSE ARE
TAXED AT A RATE THAT IS LESS
THAN YOURS.
THE INCOME TAX, CANADIAN
INCOME TAX SYSTEM IS BASED
ON MARGINAL TAX BRACKETS.
SO FROM 0 TO 30,000 DOLLARS THE TAX
RATE IS ROUGHLY 60 PERCENT
FROM 30 to 60 THOUSAND IS ROUGHLY 32 PERCENT
AND ANYTHING OVER IS HIGHER
SO IF YOU HAVE MEMBERS
MAKING 60 AND SOME MAKING
LESS, IF YOU CAN
LEGITIMATELY SPLIT SOME OF
YOUR INCOME WITH THEM AND
THEREFORE THEY'LL PAY ON
THEIR RETURN, PAY TAX AT
THEIR MARGINAL TAX RATE
WHICH WILL BE LESS THAN YOURS,
HENCE THE FAMILY HAS TAX
SAVINGS.
A SIMPLE ONE THAT GOES
UNNOTICED IS THINGS LIKE
CAPITAL GAINS.
YOU COULD, FORCE, GIVE YOUR
CHILD 100 DOLLARS AND THAT CHILD
COULD INVEST IN BELL CANADA.
FORGET THE FACT THAT BELL'S
BEEN DOWN THE LAST FEW
WEEKS.
THE OLD BELL.
AND OVER SAY THE COURSE OF
THE YEAR THE STOCK HAS GONE
FROM 100 DOLLARS TO 150 DOLLARS.
AND IT HAS PAID DIVIDENDS AS
WELL.
THE CHILD THEN HAS TWO THING,
DIVIDENDS THE CHILD HAS
RECEIVED ON OWNING THE STOCK
AND --

Maureen says THE 100.

Lorn says AND THE
100 THAT WAS GIFTED FROM THE PARENT
AND LET'S ASSUME IT WAS SOLD
IN THE YEAR SO THERE'S A 50 DOLLAR
CAPITAL GAIN.
THE DIVIDEND PORTION HAS TO
BE MOVED BACK TO THE
PARENTS' RETURN AND TAXED ON
THE PARENTS BUT THE 50 DOLLAR
CAPITAL GAIN IS LEFT ON THE
CHILD'S RETURN TO BE TAXED
ON THE CHILE'S HANDS.
SO WHAT A NUMBER OF
TAXPAYERS DO AND CLIENTS OF
MINE AND MYSELF, THEY USE
THIS MECHANISM TO FUND THE
CHILD'S EDUCATION.
YOU WOULDN'T DO THIS TO MAKE
A 50 DOLLARS GAIN IN A YEAR.
YOU WOULD WANT TO DO THIS
WHEN THE CHILD WAS YOUNG SO
THAT OVER THE COURSE OF 10
OR 15 YEARS THE CHILD CAN
BUILD UP KIND OF A BLUE CHIP
TYPE PORTFOLIO THAT MAYBE
HAS GROWN FROM AN INITIAL
GIFT OF SAY 10,000 DOLLARS TO
50,000 DOLLARS AND WITH SOME OF THE
PERFORMANCES OVER THE PAST
COUPLE OF YEARS, THAT'S NOT
UNREALISTIC SO AT THE TIME
THE CHILD IS GOING TO
UNIVERSITY, THEN YOU MAY
LIQUIDATOR THE PORTFOLIO,
AND NOW THERE'S A 40,000 DOLLAR
CAPITAL GAIN TAXED IN THE
CHILD'S HANDS IN A MUCH
LOWER RATE THAN TAXED IN
YOURS AND NOW THE CHILD HAS
THESE FUNDS FOR POST
SECONDARY SCHOOL EDUCATION.
THE SAME FUNDS THAT THE
PARENT WOULD HAVE HAD TO
PROVIDE IF IT WAS TAXED ON
THE PARENT'S RETURNS.
BUT THE ONLY PERSON WHO
LOSES IS THE GOVERNMENT.
BUT IT'S NOT LIKE -- I MEAN,
I'M TALKING ABOUT THIS ON
TV.
THIS IS NOT A HIDDEN THING.
YOU'RE ALLOWED TO DO THIS.

Maureen says NO, BUT ARE YOU
FURTHER AHEAD DOING THAT AND
STILL PAYING TAX ON THE
DIVIDENDS THAT'S TAXED BACK
TO YOU THAN TO SET UP AN
R.E.S.P.?

Lorn says I'M SAYING
YAWN THE R.E.S.P.
THE R.E.S.P. IS A GOOD IDEA
NOW THAT THE GOVERNMENT HAS
THE GRANT LEVEL.
THIS IS BEYOND.
YOU KNOW, IF YOU ARE MAKING
SUFFICIENT FUNDS THAT YOU
HAVE INVESTMENTS OUTSIDE OF
YOUR R.R.S.P. AND OUTSIDE OF
YOUR R.E.S.P. -- I KNOW,
MOST OF US DON'T BECAUSE WE
HAVE MORTGAGES AND THING,
BUT THERE IS A WHOLE BUNCH
OF PEOPLE OUT THERE THAT
DO -- THIS WOULD BE AN
INTERESTING WAY TO TAKE
ADVANTAGE OF IT.
I MEAN, YOU SEE A LOT OF
IN-TRUST ACCOUNTS.
SOME OF THEM ARE SET UP
CORRECTLY AND SOME AREN'T.
THERE'S A LOT OF CAUTION
THAT NEEDS TO BE HANDLED IN
THOSE.

Maureen says WE MAY GET CALLS
ON THAT AS WELL.
CATHY, THANK YOU.
NORBERT.
I WORK ON THE INTERNET CAN I
CLAIM THE COST OF MY
INTERNET SUPPLIER. I'M
NOT A REGISTERED BUSINESS, I
JUST CLAIM THE INCOME FROM
THE WORK I DO.

Lorn says DO YOU
UNDERSTAND THAT QUESTION?

Maureen says I THINK.
SEE, I HAVE TO DO RESEARCH
AT HOME ON THE INTERNET AS
WELL SO LET'S JUST SAY
THAT'S WHAT IT'S FOR.

Lorn says YEAH, IF
HE'S AN EMPLOYEE, AND THE
FACT THAT HE IS USING THE
INTERNET TO PERFORM HIS JOB,
THAT TYPE OF EXPENSE IS NOT
ALLOWED AS A DEDUCTION TO AN
EMPLOYEE.
GOING BACK TO OUR
CONVERSATION EARLIER IN THE
PIECE, WHEN SOME QUESTIONS
ABOUT CARRYING ON A BUSINESS,
TO THE EXTENT THAT HE HAD A
BUSINESS AND PART OF HIS
BUSINESS WAS -- NOT EVEN
MAKING TRADES ON THE -- NOT
BUYING AND SELLING PRODUCT,
BUT ACTUALLY MAYBE DOING
MARKET RESEARCH OR OTHER
THINGS RELATED TO HIS
BUSINESS, CLEARLY THE COSTS
OF THE INTERNET PROVIDER
WOULD BE A DEDUCTIBLE
EXPENSE.

Maureen says BACK TO IF HE'S
AN EMPLOYEE, THOUGH.
IF YOU CAN GET YOUR BOSS TO
FILL OUT THAT FORM, THE T
T-2200 --

Lorn says YEAH, I
THINK IT'S STILL A PUSH.
YOU'RE VERY RESTRICTED.
THE T-2200 IS A NICE FORM
BUT AN EMPLOYEE IS LIMITED
TO DEDUCT CAR-RELATED
EXPENSES, EXPENSES RELATING
TO AN ASSISTANT, AND A
COUPLE OF OTHER MINOR ONES.
INTERNET PROVIDER REALLY
ISN'T INCLUDED IN THERE.
NOW WHEN THE RULES CAME
OUT --

Maureen says THERE WAS NO
INTERNET.

Lorn says RIGHT,
EXACTLY SO MAYBE THERE IS
SOME INTERPRETATION THAT YOU
MAY FIT INTO ONE OF THOSE
CATEGORIES.
MY FEELING IS IF YOU CAN GET
THE T-2200 AND YOU
LEGITIMATELY USE THE
INTERNET FOR YOUR EMPLOYMENT
RELATED SERVICE, TAKE A RUN
AT IT.

Maureen says WE'RE TALK TAXES
THIS AFTERNOON WITH TAX
EXPERT LORNE KUTNER FROM
MINCE AND PARTNERS IN
TORONTO.
IF YOU HAVE A QUESTION ABOUT
YOUR TAXES AND FILLING IN
ALL THE FORMS, GIVE US A
CALL. IN TORONTO, OUR NUMBER
IS 416 484-2727. CALL US TOLL
FREE IF IT’S LONG DISTANCE.
1-888-411-1234 AND YOU CAN E-MAIL
YOUR QUESTION TO MORETOLIFE@TVO.ORG
AND LET'S GO TO WAYNE IN
WINSOR. HELLO, WAYNE?

Wayne says HELLO, MAUREEN.

Maureen says HI, AND WHAT'S
YOUR QUESTION?

Wayne says I HAVE A QUESTION
FOR YOUR GUEST ABOUT THE
BARTER SYSTEM.

Lorn says AH, THE OLD
BARTER SYSTEM.

Wayne says YEAH.
IS THERE ANY GUIDELINES
PRINTED OUT BY CANADA?

Lorn says REVENUE
CANADA DOES HAVE A
DISCUSSION IN ONE OF THEIR
PUBLICATIONS, AND I DON'T
REMEMBER WHICH ONE IT IS, ON
THE BARTER SYSTEM.
THIS IS THE TYPE OF QUESTION
THAT WE TALKED ABOUT EARLIER.
IF YOU CALLED UP REVENUE
CANADA AND SAID I NEED SOME
INFORMATION ON THE BARTER
SYSTEM, THEY WOULD POINT THE
CALLER IN THE RIGHT
DIRECTION.
BUT JUST TO TALK ABOUT IT
GENERALLY, TO THE EXTENT
THAT YOU AND SOMEONE ELSE
ARE TRADING SERVICES, I'M AN
ACCOUNTANT AND I NEED SOME
ELECTRICAL WORK DONE IN MY
HOUSE, AND I'LL DO YOUR TAX
RETURN IF YOU GO IN AND PUT
IN A COUPLE POT LIGHTS.
WELL THAT IS BASICALLY PART
OF THE UNDERGROUND ECONOMY
IF YOU'RE NOT REPORTING IT.
BECAUSE REALLY WHAT'S
HAPPENED IS THAT YOU CHARGED
THIS PERSON IN THE FAIR
MARKET VALUE OF THOSE
SERVICES THAT I WOULD
NORMALLY CHARGE TO PREPARE
HIS TAX RETURN IS 300 DOLLARS, TO
PICK A NUMBER, AND HE HAS
FIGURED OUT THE ELECTRICIAN,
THAT IT'S ABOUT 300 DOLLARS FOR ME
TO GO AND PUT POT LIGHTS IN.
SO WE'RE NOT GOING TO REPORT
AND WE SAVE THE TAX.
WELL REALLY I SHOULD BE
REPORTING THE 300 DOLLARS AND HE
SHOULD BE REPORTING THE
300 DOLLARS.
HE WOULD ALSO HAVE A 300 DOLLAR
EXPENSE FOR MY ACCOUNTING
SERVICES AND I WOULD HAVE
THAT EXPENSE FOR THE
ELECTRICAL SERVICES.
I WOULDN'T BE ABLE TO DEDUCT
MIP.
HE MAY OR MAY NOT BE ABLE TO
DEDUCT HIS IF HE WAS PART OF
A BUSINESS.
YOU GOT TO BE CAREFUL NUMBER
ONE WITH WHO YOU'RE DEALING
WITH.
REMEMBER, THERE'S TWO SIDES
TO A BARTER.
AND THAT PERSON IF THEY'RE
UNHAPPY BECAUSE MAYBE
THEY'RE UNHAPPY WITH THE
ARRANGEMENT, COULD MAKE SOME
CALLS TO OUR FRIENDS AT
REVENUE CANADA, AND EVEN
THOUGH THEY MAY BE SUBJECT TO
REVIEW AS WELL, YOU GOT TO
BE CAREFUL AS TO WHAT YOU'RE
DOING AND WHO YOU'RE DOING
IT WITH.

Maureen says OKAY, BUT IF YOU
WANT MORE INFORMATION YOU
COULD CALL THAT 1-800 NUMBER
IN THE PHONE BOOK.

Lorn says YES.

Maureen says OKAY, THANKS
WAYNE.
DONNA IS IN TORONTO.
HI DONNA.

Donna says HELLO, GOOD
AFTERNOON.

Lorn says HI.

Maureen says HI.

Donna says HI.
I WAS JUST WONDERING YOU MY
PARENTS DO MY TAX AND I'M
THEIR DEPEND SPENT, I LIVE
WITH THEM, I'M 19 BUT I ALSO
WORK.
I WAS WONDERING IF I HAVE TO
DO MY TAX INDEPENDENTLY,
TOO.

Lorn says YES,
ABSOLUTELY.
T-4 FROM AN EMPLOYER?

Donna says YES.

Lorn says YES, AND I
IMAGINE THERE'S SOME TAX
WITHHELD?

Donna says YES.

Lorn says YES.
THE ONLY WAY YOU CAN
DETERMINE WHETHER OR NOT THE
AMOUNT OF TAX THAT'S BEEN
WITHHELD IS ACCURATE IS FOR
YOU TO PREPARE A TAX RETURN.
NUMBER ONE.
NUMBER TWO IS THEY PROBABLY
TOOK OFF C.P.P. AND E.I..
THEY MAY HAVE TAKEN OFF TOO
MUCH, DEPENDING WHAT THE
INCOME LEVELS ARE AND HOW
LONG THE CALLER WORKED
DURING THE YEAR SO YOU MAY
BE ENTITLED TO A REFUND OF
C.P.P. AND E.I.
MORE IMPORTANTLY THERE MAY
BE CREDITS YOU'RE ELIGIBLE
FOR.
THE ONTARIO TAX CREDIT.
CERTAINLY AT AGED 19 YOU'LL
BE ELIGIBLE FOR THAT THE
G.S.T. CREDIT, NONE OF WHICH
YOU WON'T BE ABLE TO GET IF
YOU DON'T FILE YOUR TAX
RETURN.
FINALLY, R.R.S.P.s.
EVEN THOUGH YOU MAY NOT
CURRENTLY TO WANT MAKE AN
R.R.S.P. CONTRIBUTION,
YOU'RE ENTITLED TO 18 PERCENT OF
YOUR PRIOR YEAR'S EARNED
INCOME TO DETERMINE WHAT
YOU'RE AVAILABLE TO
CONTRIBUTE.
IF YOU DON'T FILE A TAX
RETURN, THERE'S NO WAY
YOU'RE EVER GOING TO BE ABLE
TO FIGURE OUTS, AND THE
GOVERNMENT WON'T KNOW,
BECAUSE YOU HAVEN'T FILED,
WHAT YOUR R.R.S.P.
CONTRIBUTION ROOM IS.
SO EVEN 19, EVEN A
15-YEAR-OLD WHO HAS A SUMMER
JOB SHOULD BE FILING A TAX
RETURN AND ESTABLISHING
THEIR R.R.S.P. CONTRIBUTION
ROOM, BECAUSE WHEN THEY'RE
25, 26, 27, AND THEY'RE
MAKING COMPARATIVELY MORE
MONEY AND THEY WANT TO MAKE
AN R.R.S.P. CONTRIBUTION,
WELL NOW IT'S BASED ON MAY
SEVEN OR EIGHT YEARS OF PART
TIME JOBS.

Maureen says SO DO YOU
RECOMMEND FOR THOSE STUDENTS
WHO SAY CUT GRASS DURING THE
SUMMER, AND NO ONE'S
DEDUCTING ANYTHING FROM THEM,
SHOULD THEY STILL FILE A TAX
RETURN?

Lorn says THEY
SHOULD.
BECAUSE REMEMBER THE FIRST
ROUGHLY 7,000 OF INCOME IS
TAX-FREE.
YOU HAVE YOUR OWN PERSONAL
TAX CREDIT.
SO MOST PEOPLE WOULD SAY YOU
KNOW WHAT?
I'M NOT GOING TO REPORT IT.
IT'S CASH UNDER THE TAME.
IF YOU'RE MAKING 7,000 DOLLARS
YOU'RE JUST LOSING OUT ON
YOUR OWN BEHALF.
YOU FILE IT, ESTABLISH SOME
R.R.S.P. ROOM, MAY BE
ELIGIBLE FOR R.R.S.P. CREDIT,
GST CREDITS.
I'M NOT TALKING THOUSANDS OF
DOLLARS, BUT A HUNDRED
DOLLARS IS THE G.S.T. CREDIT,
SEVERAL HUNDRED -- IT'S
SOMETHING WORTH FILING.

Maureen says THANKS DONNA.
BILL IN NIAGARA FALLS.
I'VE PURCHASED
LABOUR-SPONSORED GST FUNDS
THIS YEAR FOR THE FIRST
TIME.
WHAT AREA OF THE FORM DO I
HAVE TO COMPLETE TO GET THE
ADDITIONAL LABOUR-SPONSORED
TAX CREDIT.

Lorn says THAT'S ON
PAGE FOUR OF THE TAX RETURN
WHERE YOU GET THE ADDITIONAL
CREDIT.
NOW, THAT'S WHERE IT GOES.
NOW IT ACTUALLY GOES FIRST
ON SCHEDULE ONE, WHICH IS
THE TAX CALCULATION FORM.
SO WHEN YOU'RE DOING
SCHEDULE ONE -- I'M ASSUMING
HE'S DOING IT BY HAND,
BECAUSE IF HE DID IT ON ONE
OF THE PROGRAMMES, WOULD
AUTOMATICALLY CONFORM.
IT WOULD GO ON SCHEDULE ONE
AND THAT NUMBER CARRIES
FORWARD TO PAGE FOUR OF THE
FOUR-PAGE JACKET.
DON'T FORGET IT BECAUSE IT'S
AN INCENTIVE.

Maureen says IT'S IMPORTANT.
YOU DON'T KNOW THE LINE
NUMBER?!

Lorn says YEAH, THANK
YOU.
(LAUGHING)

Maureen says JACK IN
LISTWELL.
HELLO JACK.

Jack says HELLO, MAUREEN,
IT'S A QUESTION FOR
CLARIFICATION THAT I'M
LOOKING FOR FOR YOUR GUEST.
YOU WERE TALKING ABOUT
CHARITABLE DONATIONS
EARLIER.

Lorn says YES.

Jack says AND YOU THREW A
COUPLE OF PERCENTAGES, OF
26 PERCENT ON THE FIRST 200 AND
THEN 50 AFTER
THAT?

Lorn says THAT'S
FEDERAL AND PROVINCIAL.

SO IT NEVER APPEARS ON
YOUR FORM THAT WAY.

Lorn says YEAH, THE
FORM WOULD SHOW IT AT 17 PERCENT
AND 29 PERCENT?
THAT'S THE FEDERAL RATE.
I WAS GIVING A COMBINED.
BECAUSE THE WAY --

Jack says YOU WERE WORKING
IT RIGHT THROUGH TO THE END.

Lorn says RIGHT
THROUGH TO THE END, EXACT
THREE.

Jack says THAT CLARIFIES IT
FOR ME.
THANK YOU VERY KINDLY.

Maureen says YOU'RE WELCOME.
THANKS, JACK.
BYE-BYE.
LET'S SEE, R.R.S.P.
CONTRIBUTIONS LAST YEAR
PROPER IN A BIT OF A SLUMP.
WHAT DO YOU THINK WILL BE --
WE'LL BE TELLING PEEP BELL
THEM AFTER THIS YEAR?

Lorn says I THINK
PEOPLE ARE GENERALLY BUOYANT
WITH THE ECONOMY, EVEN COME
OTHER RECENT CHANGES -- NOT
CHANGES BUT THE IMPACT OF
THE STOCK MARKET HAS NOT
BEEN VERY FAVOURABLE FOR
PEOPLE BUT PEOPLE ARE
BUOYANT WITH ECONOMY, THE
JOB, PROSPECTS ARE GOOD,
INFLATION IS LOW, INTEREST
RATES ARE REASONABLE.
I THINK PEOPLE GENERALLY
HAVE MORE DISPOSABLE INCOME.
I THINK PEOPLE ARE EVEN
INCLINED TO BORROW TO MAKE
AN R.R.S.P. CONTRIBUTION.
THE LOAN RATE CHARGED ON
R.R.S.P. LOANS IS FAIRLY
REASONABLE.
THE BANKS ARE VERY
UNDERSTANDING IN TERMS OF
TIME PERIOD TO PAY IT BACK.
IT REALLY PROVIDES AN
OPPORTUNITY TO BUILD UP AND
TAKE ADVANTAGE OF THESE
R.R.S.P. CONTRIBUTION ROOMS
THAT YOU'VE DEVELOPED ALL
THESE YEARS, THAT PERHAPS
YOU HAVEN'T HAD THE FUNDS TO
TAKE ADVANTAGE OF.

Maureen says YEAH.

Lorn says I'M NOT
HERE SELLING R.R.S.P. LOANS,
BUT IT IS SOMETHING TO LOOK
AT.
BUT I THINK IN GENERAL
YOU'LL SEE AN INCREASE.
YOU'LL FIND PEOPLE, THE BABY
BOOMER AGE IS NOW IN THE LOW
40s, UP UNTIL THE 60s.
AND THESE PEOPLE ARE GETTING
CLOSE TO RETIREMENT, AND
THEY'RE NOW LOOKING AT
ISSUES LIKE -- THEY'VE LED A
PRETTY GOOD LIFE IN TERMS OF
WHAT THEY'VE INHERITED FROM
THEIR PARENTS OR ARE GOING
TO INHERIT FROM THEIR
PARENTS AND THEY'RE STARTING
TO NOW FOCUS ON KIND OF
INTERESTS, THINGS IN THEIR
LIFE AS OPPOSED TO CARS AND
TRIPS AND HOUSES.
UNFORTUNATELY I'M PART OF
THE GROUP AS WELL.
AND IT'S IMPORTANT TO START
THINKING ABOUT.
AND I THINK PEOPLE START TO
THINK ABOUT IT AND HENCE
WILL START TO TOP TURN.
I THINK THERE IS HUGE
R.R.S.P. ROOM.

Maureen says THERE'S ROOM.
OH, THERE'S ROOM.

Lorn says THAT PEOPLE
DON'T TAKE ADVANTAGE OF AND
IT'S A REAL NICE, FLEXIBLE
PORLGS OF THE TAX SYSTEM WE
NEED TO TAKE ADVANTAGE OF.

Maureen says LET'S GO TO
THE -- LET'S GO TO THE
PHONES.
ALBERT IN ALORA.
HI ALBERT.

Albert says HI.
I HAVE A QUESTION FOR YOU.
OUR DAUGHTER LIVES IN A
HOUSE OWNED BY HER
FATHER-IN-LAW AND HER
HUSBAND, WHICH IS THE SON OF
THE FATHER.

Lorn says RIGHT.

Albert says SHE PAYS HALF THE
RENT TO THE FATHER AND HE IN
TURN I GUESS PAYS IT TO THE
MORTGAGE.
NOW IS SHE ALLOWED TO CLAIM
THAT ON HER ONTARIO PROPERTY
SALES TAX CREDIT OR NOT?

Lorn says YES.

Albert says SHE IS?

Lorn says SHE IS.
HOWEVER KEEP IN MIND THAT
THE FATHER-IN-LAW SHOULD BE
REPORTING THE RENTAL INCOME
ON HIS TAX RETURN.

Albert says HOW WOULD YOU
FIND OUT?

Lorn says I'M SORRY?

Albert says HOW WOULD YOU
FIND OUT?
COULD YOU GO TO THE BANK AND
FIND OUT?
IF HIS SON -- THE SON NEVER
GETS ANY RECEIPTS OR
ANYTHING.

Lorn says WELL, YOU
KNOW, TO THE EXTENT THAT
THEY'RE ON SPEAKING TERMS, I
THINK IT'S IMPORTANT THAT
THEY HAVE A CONVERSATION TO
SAY THAT THE DAUGHTER SHOULD
SAY LISTEN, I HAVE --
DAUGHTER-IN-LAW, I HAVE THE
OPPORTUNITY TO CLAIM AN
ONTARIO TAX CREDIT FOR THE
RENT THAT I PAY TO YOU, BUT
ON THE OTHER SIDE YOU SHOULD
BE REPORTING THAT RENT ON
YOUR TAX RETURN.
AND THE FATHER-IN-LAW MAY
SAY WELL, I'M NOT, AND
PLEASE DON'T.
BUT TO ANSWER YOUR QUESTION
TECHNICALLY, SHE'S ENTITLED
TO CLAIM THE CREDIT.
BUT THERE ARE REPERCUSSIONS
TO THE EXTENT THAT REVENUE
CANADA TRIES TO MATCH UP.
ON THE CREDIT FORM IT'LL ASK
FOR THE NAME OF THE
LANDLORD.

Albert says RIGHT.

Maureen says AND IF HE'S NOT
CLAIMING IT -- IT'S LIKE THE
CAREGIVERS.
WHEN YOU DON'T GET RECEIPTS
FOR DAYCARE --

Lorn says RIGHT.

Maureen says THAT'S THE RISK
YOU TAKE.

Lorn says
PARTICULARLY WHEN YOU LIVE
WITH FAMILY.
IF YOU'RE IN A SITUATION
WHERE IT'S ARM'S LENGTH
ABSOLUTELY YOU'RE GOING TO
CLAIM IT BUT IN FAMILY
SITUATION YOU FEED TO BE
COGNIZANT OF THE OTHER SIDE.

Maureen says OKAY.
THANKS FOR THE QUESTION,
ALBERT.
WE HAVE AN E-MAIL.
OKAY, WHEN SOMEONE DIES
OWING TAXES THROUGH THEIR
BUSINESS HOW LONG UNTIL THE
GOVERNMENT STOPS COMING
AFTER THEM?
IN THIS CASE IT'S BEEN 12
YEARS SINCE THE DEATH AND
THE LAST TAX CLAIM AND AT
LEAST EIGHT YEARS SINCE LAST
CONTACT FROM THE GOVERNMENT.
CAN WE ASSUME IT'S OVER?
THE COMPANY HAD NO ASSETS ON
THE DEATH OF THE CLAIMANT
ANYWAY.

Lorn says DON'T
REALLY HAVE ENOUGH FACTS,
BUT LET ME TALK ABOUT IT
GENERICALLY.
WHEN SOMEONE PASSES AWAY
THEY HAVE TO FILE WHAT'S
CALLED THEIR TERMINAL TAX
RETURN.
THAT'S THE TAX RETURN FOR
THE YEAR FROM JANUARY 1st UP
TO THE DATE OF THEIR DEATH.
AND ASSUMING THAT THERE WAS
NO SURVIVING SPOUSE, THEY
ARE DEEMED TO HAVE SOLD ALL
OF THEIR ASSETS AT THEIR
THEN FAIR MARKET VALUE AT
THE DATE OF THE DEATH.
SO THERE'S TWO THINGS TO
LOOK AT.
NUMBER ONE, THE INCOME.
LET'S ASSUME SOMEONE PASSED
AWAY ON JUNE 30th OF THE
YEAR.
SIX MONTHS' WORTH OF INCOME
NEEDS TO BE REPORTED AND
THEN YOU NEED TO LOOK AT
WHAT DOES THE PERSON OWN?
WHAT STOCKS DO THEY OWN,
WHAT REAL ESTATE DO THEY
OWN?
WHAT LIST OF ASSETS DO THEY
OWN AND IS THERE
APPRECIATION IN THOSE
ASSETS?
SO IF SOMEONE PASSES AWAY
OWNING -- I'LL PICK UP BELL
CANADA.
A BELL CANADA STOCK ASK
THEY'VE HAD IT 40 YEARS
THERE'S GOING TO BE A BIG
GAIN IN THERE AND EVEN
THOUGH YOU HAVEN'T ACTUALLY
SOLD IT THE PERSON IS TAXED
AS IF THEY HAD SOLD IT AND
IT'S THE EXECUTOR'S
RESPONSIBILITY TO MAKE SURE
THAT THE DECEASED AND HIS OR
HER ESTATE PAYS THE TAXES.
SO IN THIS SITUATION, I'M
SURPRISED IT'S GONE ON THIS
LONG, BECAUSE NORMALLY WHAT
HAPPENS IS THAT THE PERSON
WILL HAVE FILED A TAX
RETURN.
THE RETURN WOULD HAVE BEEN
ASSESSED, THERE WOULD HAVE
BEEN A BALANCE OWING AND IF
REVENUE CANADA HAD NOT
GOTTEN THE FUNDS ON CLOSING,
ON FILING THE TAX RETURN,
THEY WOULD GO AND LOOK AT
THE ASSETS, THE NET WORTH OF
THE INDIVIDUAL TO SEE IF
THEY CAN TAKE CONTROL OF AN
ASSET AND SELL IT.
NORMALLY WHAT HAPPENS IS THE
EXECUTOR NEEDS TO FILE
WHAT'S CALLED A CLEARANCE
CERTIFICATE.
SO AFTER THE PERSON'S DIED,
YOU FILE THIS FORM WITH
REVENUE CANADA, TX-19.
I MAY NOT KNOW THE LINE, I
KNOW THE FORM.
CX-19, THAT HAS TO BE FILED.
WHICH BASICALLY IF REVENUE
CANADA AGREES THIS PERSON
DOESN'T OWE ANYTHING, THEY
CLEAR THE DEBTS, AND THE
EXECUTOR THEN HAS THE
ABILITY TO PAY OUT ALL THE
DECEASED ASSETS TO THE
BENEFICIARIES.
WITHOUT IT, THE EXECUTOR IS
LIABLE.
IF THEY FIND OUT WE'VE
DISTRIBUTED EVERYTHING TO
THE KIDS, HOWEVER THIS GUY
HAD A LIABILITY FROM 1987
THAT WAS NEVER PAID, WELL
REVENUE CANADA CAN ACTUALLY
GO AFTER THE EXECUTOR, WHO
WOULD FIRST GO BACK TO THE
KIDS.
THE KIDS MAY SAY...

He makes a mocking hand gesture.

Maureen says YEAH!

Lorn says AND THEN
HE'S LEFT WITH IT OUT OF HIS
OWN POCKET.

Maureen says THE FACT THAT
REVENUE CANADA HASN'T
CONTACTED HIM IN EIGHT
YEARS --

Lorn says IT'S A GOOD
SIGN.
I DON'T KNOW WHETHER THEY'RE
GONE THE CLEARANCE
CERTIFICATE ROUTE OR NOT.
IT'S HARD TO KNOW WHERE THEY
ARE.

Maureen says SO ASK ABOUT
THOSE THINGS.

Lorn says I WOULD ASK
WHAT SPECIFIC STEPS HAS BEEN
TAKEN TO CLEAR THE FILE.

Maureen says OKAY, TERESA IN
TORONTO, WELCOME.
HI.

Teresa says HI, GOOD
AFTERNOON.
I'M CALLING YOU BECAUSE I
HAVE A BUSINESS.
I STARTED A BUSINESS BACK IN
'97 WHEN I CAME -- ACTUALLY
I CAME TO CANADA IN '94, BUT
I STARTED A BUSINESS IN '97.

Lorn says OKAY.

Teresa says WHEN I STARTED MY
BUSINESS, I WAS NOT LANDED
OR ANYTHING LIKE THAT SO I
NEVER HAD A SOCIAL SECURITY
NUMBER.
I'M STILL WAITING TO BE
PROCESSED FOR MY LANDED SO I
STILL DON'T HAVE A SOCIAL
SECURITY NUMBER.
YET I HAVE TONS OF LETTERS
FROM REVENUE CANADA.
THEY KEEP WRITING ME.
I DON'T EVEN KNOW WHAT TO DO
WITH ALL THESE LETTERS.
THEY KEEP WRITING FOR ME TO
FILE TAXES.
THEY'RE WRITING ME, GOODS
AND SERVICE HARMONIZED SALES
TAX RETURNS.
IF I GO IN WITH THEM TO
LET'S SAY H and R BLOCK OR
ANYTHING, THAT CAN DO STUFF
LIKE THAT THEY WOULD SAY TO
ME YOU NEED A SOCIAL
SECURITY NUMBER --

Lorn says SOCIAL
INSURANCE NUMBER.

Teresa says YEAH, AND THEY
CAN'T DO ANYTHING FOR ME
WITHOUT THAT.

Lorn says RIGHT.

Teresa says AND I DON'T KNOW
WHAT TO DO.
I'M JUST LEFT WITH ALL THESE
BILLS AND --

Lorn says OKAY.
WELL FIRST OF ALL YOU DON'T
HAVE TO BE LANDED TO GET A
SOCIAL INSURANCE NUMBER.
ANYBODY CAN APPLY FOR A
SOCIAL INSURANCE NUMBER
SHOWING RESIDENCE IN CANADA
SO FROM REVENUE CANADA'S
PERSPECTIVE, YOU'RE TAXED
BASED ON THE FACT THAT YOU
ARE RESIDENT OF CANADA, NOT
ON YOUR IMMIGRATION STATUS
BECAUSE THEY DON'T CARE
WHETHER YOU'RE A CITIZEN,
WHETHER YOU'RE LANDED,
WHETHER YOU'RE A VISITOR.
IF YOU'RE A NON-RESIDENT AND
YOU'RE WORKING IN CANADA,
YOU'RE SUPPOSED TO FILE A
TAX RETURN.
CAN'T FILE A TAX RETURN
WITHOUT A SOCIAL INSURANCE
NUMBER.
SO EVEN A NON-RESIDENT WHO
HAS NO INTENTION OF EVER
LIVING HERE HAS TO GET A
SOCIAL INSURANCE NUMBER TO
BE ABLE TO FILE A TAX
RETURN.
SO THE CORRESPONDENCE THE
CALLER IS GETTING IS BECAUSE
SHE PROBABLY HAS REGISTERED
THE BUSINESS WITH REVENUE
CANADA AND THE VARIOUS OTHER
AGENCY SEE, MAYBE ONTARIO
RETAIL SALES TAX AND
WORKMAN'S COMPENSATION, WHO
KNOWS, AND THEIR
AUTOMATICALLY
COMPUTER-GENERATED FORMS ARE
SAYING BY THE WAY, WHERE IS
YOUR TAX FILINGS?
YOUR GST RETURNS AND ALL
THOSE ITEMS?
AND WHAT THE CALLER SHOULD
DO IS GO TO -- H and R BLOCK
MAY DO IT OR SOME
ORGANIZATION LIKE THAT OR AN
ACCOUNTANT, AND TAKE ALL THE
PAPERS AND SAY HERE'S MY
DILEMMA.
WHAT SHOULD I DO?
AND HOW MUCH WILL IT COST TO
GET ME UP TO DATE?
YOU KNOW, GENERALLY WHAT THE
PERSON SHOULD BE DOING IS
FILING TAX RETURNS FROM THE
POINT THAT THEY CAME INTO
CANADA -- CERTAINLY FROM THE
POINT THAT THEY STARTED THE
BUSINESS.
SO FROM '94 TO '97 THE
PERSON MAY NOT HAVE HAD ANY
INCOME BUT CLEARLY IN '97
WHEN THE BUSINESS WAS
COMMENCED TILL NOW, THERE
SHOULD BE RETURNS BEING
FILED FOR THAT BUSINESS.
WHETHER IT'S UNINCORPORATED
AND IT WOULD SHOW UP ON THE
PERSONAL TAX RETURN OR MAYBE
IT'S AN INCORPORATION
OPERATED BUSINESS AND
THERE'S AN INCORPORATION
RETURN THAT NEEDS TO BE
FILED.
BUT THEY DON'T REALLY CARE
THAT THE INDIVIDUAL'S NOT
LANDED AND IS WAITING FOR
THEIR SOCIAL INSURANCE
NUMBER.
THEY FEEL THAT YOU SHOULD BE
FILING AND YOU SHOULD HAVE
GOTTEN A SOCIAL INSURANCE
NUMBER.
AND I'VE DONE THIS FOR
CLIENTS WHO ARE NOT LANDED.
YOU GO DOWN, YOU EXPLAIN TO
HEALTH AND WELFARE CANADA
WHERE YOU GET THE NUMBERS,
HERE'S THE SITUATION.
YOU SHOW THEM SOME COLOUR
PICTURES OF YOU AND OTHER
DOCUMENTS, BIRTH
CERTIFICATES AND THINGS AND
THEY WILL ISSUE IT.
TAKES A FEW WEEKS, BUT THEY
ISSUE IT.

Maureen says SO THAT'S THE
FIRST THING SHE SHOULD DO.

Lorn says VERY FIRST
THING.

Maureen says AND THEN TAKE IT
TO SOMEBODY AND SAY BRING ME
UP TO DATE HERE.

Lorn says THERE MAY
NOT BE TAX OWING.
AS A MATTER OF FACT THERE
MAY BE CREDITS SHE HASN'T
TAKEN ADVANTAGE OF.
BUT IF YOU WANT THIS
FLOOD -- AND I KNOW.
THE AMOUNT OF PAPERWORK,
IT'S -- IT'S UNBELIEVABLE.
YOU TALK ABOUT THE
GOVERNMENT TRYING TO SAVE
MONEY.
WELL HERE'S ONE GOOD WAY TO
SAVE MONEY IS CUT DOWN ON
THE PAPERWORK.
IT'S HUMAN AMONG GUS.
EVERY MONTH YOU GET THE SAME
THING.
IT'S ALL COMPUTER-GENERATED.
YOU DON'T HAVE A FACE
LOOKING AT IT AND SAY “THIS
IS STRANGE.
MAYBE I'LL PICK UP THE PHONE
AND CALL THIS LADY AND ASK
SOME QUESTIONS.”
NO, WE'LL GIVE YOU THREE
YEARS' WORTH OF PAPER WORK.

Maureen says GOOD LUCK,
TERESA.
THANKS FOR THE CALL.
GAIL IS IN TORONTO.

Gail says HELLO.

Maureen says HELLO.

Gail says GOOD AFTERNOON.

Lorn says HI.

Gail says I'M AN EXECUTOR
AND SOUL BENEFICIARY OF MY
MOTHER'S ESTATE.

Lorn says OKAY.

Gail says NOW I'VE DONE
WHAT I CONSIDER ARE ALL THE
NECESSARY PAPERWORK BUT I'VE
RECEIVED A T-5 SLIP FOR
INTEREST ON HER ACCOUNT FOR
'99?

Lorn says OKAY.

Gail says AND I'VE ALREADY
DONE THE FINAL CLEARANCE AND
THAT.
CAN I APPLY THAT TO MY
INCOME OR DO I NEED TO KIND
OF OPEN THAT UP AGAIN AND --

Lorn says WHEN DID
SHE PASS AWAY?

Gail says IN '98.

Lorn says IN 1998.

Gail says YES.

Lorn says SO YOU
FILED A RETURN FOR HER UP
UNTIL THE DATE OF DEATH FOR
'98 AND SUBSEQUENT TO THAT
YOU HAVEN'T FILED ANYTHING
FOR HER, YOU JUST GOT THE
CLEARANCE CERTIFICATE.

Gail says RIGHT AND PROBATE
WAS DONE THIS YEAR.

Lorn says RIGHT THAT
'99 INCOME IS REALLY YOURS
ANYWAY IF YOU'RE THE SOUL
BENEFICIARY SO YOU SHOULD BE
INCLUDING THAT ON YOUR TAX
RETURN FOR '99 BECAUSE YOUR
LATE MOTHER WOULDN'T HAVE A
TAX RETURN FOR '99.

Gail says RIGHT.

Lorn says ABSOLUTELY
CORRECT.

Gail says RIGHT.
OKAY.
THANK YOU VERY MUCH THEN.

Maureen says THANKS.

Gail says BYE-BYE.

Maureen says BYE-BYE.
BRIAN IN SCARBOROUGH.
“WE'RE RENTING OUT AN
APARTMENT WHICH WE RECENTLY
INHERITED.
THE NET RENT IS BEING
DECLARED AS INCOME.
ARE WE PERMITTED TO
DEPRECIATE THE VALUE OF THE
AMOUNT AS A DEDUCTION AND IF
SO WHAT IS AN ACCEPTABLE
RATE OF APPRECIATION?
AND WOULD IT BE BASED ON THE
VALUE OF THE APARTMENT WHEN
IT WAS INHERITED?”

Lorn says ALL
EXCELLENT QUESTIONS.
I'LL GO WITH THE LAST FIRST.
YES, THAT IS -- YOUR COSTS
FOR TAX PURPOSES IS THE FAIR
MARKET VALUE OF THE
APARTMENT AT THE TIME IT WAS
INHERITED.
AS A MATTER OF FACT, THE
PERSON WHO PASSED AWAY
SHOULD HAVE REPORTED THIS AS
A CAPITAL GAIN, OR AT LEAST
AS A DEEMED SALE AT THAT
POINT IN TIME, SO THAT WAS
THEIR PROCEEDS, AND THIS IS
THE RECIPIENTS, THE
INHERITEES' COSTS.
THAT IS THE AMOUNT THAT YOU
THEN APPLY A DEPRECIATION
RATE TO THE DEPRECIATION
RATE FOR THAT IS 4 PERCENT.

Maureen says FOUR.

Lorn says RIGHT.
IN THE YEAR YOU ACQUIRE
SOMETHING SO, THE YEAR IT
WAS INHERITED, IF IT'S 1999,
IS HALF THE NORMAL RATE SO
IT'S 2 percent.
SO JUST IN THE YEAR YOU
ACQUIRE SOMETHING.

Maureen says SO THIS YEAR 2 PERCENT,
THEN FROM NOW ON 4 PERCENT.

Lorn says BUT IT'S
DECLINING BALANCE.
SO IF IT WAS 100 DOLLARS -- I KNOW
IT'S NOT -- BUT IF IT WAS,
AND THE FIRST YEAR YOU GET
2 percent, SO THAT'S 2 DOLLARS, SO THEN IN
THE NEXT YEAR YOU APPLY 4 percent
OF 98 DOLLARS.
YOU DON'T GO 4 PERCENT OF 100 DOLLARS.
IT'S DECLINING BALANCE.
AND YOU'RE LIMITED TO WHAT
YOUR NET INCOME IS BEFORE
THE PROPERTY BEFORE
APPRECIATION.
SO YOU CLAIM ALL NORMAL
EXPENSES LIKE TAXES AND
INSURANCE AND REPAIRS AND
MAINTENANCE AND YOU GET DOWN
TO 500 DOLLARS.
AND WHEN YOU DO YOUR
CALCULATION OF DEPRECIATION
YOU CAN REALLY CLAIM A
THOUSAND.
THE RULES ONLY ALLOW TO YOU
REALLY CLAIM AN AMOUNT EQUAL
TO YOUR NET INCOME.
THE 500 DOLLARS FROM THE RENTAL.
SO YOU CAN ONLY BRING IT
DOWN TO 0 DOLLARS.
YOU CAN'T CREATE A LOSS BY
CLAIMING DEPRECIATION.

Maureen says GOT IT.
THANKS, BRIAN, FOR THE
QUESTION.
RICH IS IN OSHAWA.
HI RICH.

Rich says HOW, HOW ARE YOU?

Maureen says GOOD THANKS.

Lorn says HI.

Rich says I JUST WANTED TO
ASK YOU A COUPLE QUESTIONS.
THE FIRST ONE WOULD BE MY
WIFE AND I HAVE A FOSTER
HOME WITH TEENAGERS IN IT
AND WE GET A TAX-FREE INCOME
FROM THAT.
SO WHAT I'M WONDERING IS HOW
YOU WOULD -- IT'S THROUGH
THE MINISTRY.
IT'S OBVIOUSLY A GOVERNMENT
SO, I'M WONDERING HOW WE
WOULD GO ABOUT CLAIMING
THAT.
I ALSO WORK WITH AN AID
WORKER AND THAT'S MY FIRST
QUESTION.
HOW WOULD YOU GO ABOUT
CLAIMING THAT?

Lorn says I'LL BE
HONEST WITH YOU, I HAVE NO
EXPERIENCE IN THAT.
MY SUGGESTION IS TO CALL THE
GOVERNMENT AGENCY THAT
YOU'RE FUNDED BY, AND ASK
THEM WHAT THE APPROPRIATE
REPORTING IS.
I MEAN, THEY MAY PUT YOU
ONTO A LEVEL OF THE FEDERAL
GOVERNMENT.
I IMAGINE IT'S ONTARIO
THAT'S FUNDING IT?

Rich says YEAH, MINISTRY OF
COMMUNITY AND SOCIAL
SERVICES.

Lorn says YEAH, THEY
MAY HAVE A CONTACT AT
REVENUE CANADA AT THE
FEDERAL LEVEL.
OTHERWISE I WOULD CONTACT
MAYBE THAT NUMBER AND TELL
THEM WHAT YOUR PROBLEM AND
THEY WILL GET YOU INTO ONE
OF THE AREAS, BECAUSE THE
NUMBER COMES INTO A CENTRAL
NUMBER THEN GETS INTO A
DIFFERENT SPECIALTY.
I'M SORRY, I DO NOT KNOW THE
ANSWER TO THAT QUESTION.

Maureen says AND THAT'S THE
REVENUE CANADA.
THEY'VE CHANGED THEIR NAME
NOW, BUT --

Lorn says CANADA
CUSTOMS AND REVENUE.

Maureen says CANADA CUSTOMS
AND REVENUE.

Rich says THERE'S A FEW
OTHER --

Maureen says GO AHEAD.

Rich says THERE'S A FEW
OTHER HOUSES DOING THE SAME
THING, SO I CAN ASK THEM.
I WAS JUST TRYING TO GET
FREE ADVICE.

Lorn says (LAUGHING)
THAT'S OKAY.

Rich says MY OTHER QUESTION
IS BECAUSE I HAVE TEENAGERS
WHAT I'VE BEEN DOING IS IN
THE SUMMER TIME WHEN THEY'RE
NOT IN SCHOOL I'VE BEEN
GETTING THEM ODD JOBS AND
STUFF?

Lorn says YES.

Rich says BUT I'VE ALSO
BEEN MAKING MONEY OFF THAT I
WOULD ADVERTISE AND DO MY
THING, AND -- BUT I
NEGLECTED TO GET REGISTERED
AND REALLY GET INTO IT,
BECAUSE I WAS JUST DOING IT
AS AN ODD JOB THING, TAKING
AWAY RUBBISH FROM PEOPLE IN
THE TRAILER AND THAT GETTING
THEM TO WORK AND STUFF.
BUT I DID MAKE A LITTLE BIT
OFF OF IT.
AND I PAID PEOPLE AND ALL
THAT KIND OF STUFF SO I'M
JUST WONDERING WHAT I WOULD
DO THERE.

Lorn says TECHNICALLY
SPEAKING THAT AROUND BE
REPORTED.
YOU'RE NOT THE TYPE OF
PERSON THAT REVENUE CANADA
IS LOOKING FOR.
IN THE EXAMPLE YOU'RE GIVING
ME THAT'S KIND OF A LITTLE
FISH IN A BIG OCEAN VERSUS
SOME OF THE BIG FISH THAT
ARE OUT THERE.
BUT AGAIN IF YOU WANTED TO
GO TOTALLY ABOVE-BOARD YOU
COULD WRITE A LETTER, MAKE
THE ADJUSTMENT.
WHAT YOU MAY WANT TO DO IS
ON A GOING FORWARD BASIS, IF
YOU'RE REPORTING THE
“PROFIT” THAT YOU'RE MAKING
FROM THIS, KEEP IN MIND,
THOUGH, THE KIDS COULD ALSO
BE FILING TAX RETURNS, AS WE
TALKED ABOUT EARLIER AND
CLAIMING THIS INCOME.
THERE'LL BE NO TAX FOR THEM
TO THE EXTENT THEY MADE
INCOME, BUT THEY MAY BE
OPENING UP R.R.S.P. ROOM AND
THINGS LIKE THAT.

Maureen says IT'S A GOOD WAY
TO TEACH THEM, TOO, ABOUT
MONEY AND STUFF.

Lorn says RIGHT.
THEIR OBLIGATION TO FILE TAX
RETURNS.

Maureen says WAS THERE
SOMETHING ELSE, RICH?

Rich says BECAUSE I DIDN'T
REGISTER, I WANT IT TO BE
COMPLETELY ABOVE-BOARD, BUT
I DON'T REMEMBER HOW MUCH I
MADE.

Lorn says THERE'S NO
REGISTRATION REQUIRED.
YOU'VE EARNED INCOME, AND
EVEN IF YOU HAVEN'T
REGISTERED, I MEAN, IT
WOULDN'T BE ANY G.S.T.
ANYWAYS BECAUSE THERE'S A
30,000 DOLLAR ANNUAL LIMIT BEYOND
WHICH YOU DON'T NEED TO
REGISTER FOR G.S.T.
SO OTHERWISE, IF YOU FEEL
THE DESIRE T, IS WRITE A
LETTER TO REVENUE CANADA,
IDENTIFY THE YEARS IN
QUESTION, IDENTIFY THE
AMOUNTS, AND THIS IS THE NET
AMOUNT.
THIS IS AFTER ANY EXPENSES
THAT YOU'VE INCURRED AND
THEY'LL ADJUST YOUR RETURN.

Maureen says AND IF YOU WERE
GOING TO START THAT FOR THIS
SUMMER, LET'S SAY, YOU KNOW,
START NOW, DO YOU GET --
LET'S SAY YOU'RE HAULING
RUBBISH AWAY FROM SOMEONE
AND THEY PAY YOU, DO YOU
GET -- GIVE THEM A RECEIPT
OR SOMETHING?

Lorn says YEAH IN A
PERFECT WORLD THERE SHOULD
BE RECEIPTS FOR ANYTHING.
YOU SHOULD BE GIVING A
RECEIPT FOR ANY MONEY THAT
IS GIVING TO YOU, GETTING A
RECEIPT FOR ANY EXPENSES
THAT YOU INCUR BECAUSE
ULTIMATELY IF REV KNEW
CANADA WANTS TO REVIEW IT
THAT'S THE BEST EVIDENCE.
IF YOU'RE DEALING IN CHEQUES
THAT'S OKAY.
THAT'S JUST AS GOOD.
WELL, 99 percent AS GOOD.
CASH IS DIFFICULT.
DIFFICULT TO PROVE THAT
SOMEONE PAID YOU CASH FOR
THIS, AND YOU PAID CASH FOR
A PARTICULAR SERVICE OR
PRODUCT.
SO AGAIN, IF YOU REALLY TO
WANT DO IT TOTALLY ABOVE
BOARD, RECEIPTS ARE THE BEST
WAY TO KEEP TRACK OF IT.

Maureen says ALL RIGHT, GOOD.
AND GOOD LUCK, RICH.
THANKS A LOT FOR THE
QUESTION.
CHRIS IN OWEN SOUND SAYS I
DO MY TAXES USING COMPUTER
SOFTWARE AND TWO YEARS AGO I
DID MY SPOUSE'S RETURN IN
THIS MANNER AND I JUST
REALIZED THAT THE R.R.S.P.
CONTRIBUTIONS WERE NOT TAKEN
INTO ACCOUNT BY THE
PROGRAMME SO, SHE HAS ABOUT
800 DOLLARS WORTH OF R.R.S.P.
CONTRIBUTIONS THAT SHE NEVER
GOT CREDIT FOR.
HOW I DO GO ABOUT RECTIFYING
THIS SITUATION?

Lorn says OKAY.
THEY SHOULD -- THE E-MAILER
SHOULD FILE A T1-ADJ, AN
ADJUSTMENT FORM.
AND ON THAT FORM MAKE THE
ADJUSTMENT THAT SHOWS WHAT
IT SHOULD HAVE BEEN, NOT THE
WAY IT WAS ACTUALLY FILED.
BECAUSE THE GOVERNMENT WON'T
KNOW THAT THE PERSON
ACTUALLY MADE AN R.R.S.P.
CONTRIBUTION UNLESS YOU CAN
PROVE TO THEM.
SO HOPEFULLY YOU STILL HAVE
THE RECEIPT OR A COPY OF THE
RECEIPT.
YOU SEND IN THE FORM, YOU
ATTACH THE RECEIPT, YOU
INDICATE THAT THIS WAS THE
R.R.S.P. CONTRIBUTION THAT
WAS MADE THAT WAS NOT DEAD
DUCT.
YOU HAVE A CHOICE, THOUGH.
YOU DON'T NECESSARILY HAVE
TO DEDUCT THAT IN THE YEAR
THAT YOU MADE THE
CONTRIBUTION, YOU COULD
DEDUCT IT ON THIS YEAR'S
RETURN OR ON NEXT YEAR'S
RETURN OR ON THE YEAR
AFTER'S RETURN.
SO IT DEPENDS A LITTLE BIT
MAYBE ON THE FACT THAT
YOU'RE LATE ALREADY.
WHAT TAX RATE WERE YOU IN IN
THAT YEAR VERSUS WHAT TAX
RATE ARE YOU IN NOW?
MAYBE YOU'RE IN A HIGHER TAX
RATE AND YOU WANT TO GET THE
DEDUCTION TODAY AS OPPOSED
TO GOING BACK AND GET THE
DEDUCTION IN THE LOW TAX
RATE.
REMEMBER THE GOVERNMENT'S
GOING TO PAY YOU INTEREST
FROM THE TIME YOU SENT THE
FORM IN NOT FROM THE DATE
YOU FILED THE RETURN.
SO THE LOST INTEREST IS
NEGLIGIBLE.
IT'S REALLY A QUESTION OF
YOUR TAX RATE.
IF YOU'RE IN THE SAME RATES
YOU MIGHT AS WELL GO BACK
AND DO IT IN THE RIGHT YEAR.

Maureen says SO HE SHOULD
INDICATE IN A LETTER WHICH
YEAR HE WANTS THAT APPLIED
TO?

Lorn says YES IT HAS
TO BE IN THE YEAR THE
DONATION WAS MADE.
IF IT WAS HIDE IN THE FIRST
TWO MONTHS YOU HAVE A CHOICE OF
THE YEAR BEFORE OR THE
CURRENT YEAR IT WAS MADE.
IT'S TOTALLY DISCRETIONARY
SO THE GOVERNMENT WON'T KNOW
WHAT TO DO UNLESS YOU
SPECIFY.

Maureen says OKAY, LET'S GET
TRACEY IN SHE'S IN DRESDEN.

Tracey says HI MAUREEN.

Maureen says HI.
YOUR QUESTION?

Tracey says I HAVE TWO
QUESTIONS.
THE FIRST ONE HAS TO DO WITH
FARM INCOME OR BUSINESS.

Lorn says OKAY.

Tracey says WE OWN OUR OWN
FARM AND A NEIGHBOUR OF OURS,
HE HAS AN ACCOUNTANT THAT
DOES HIS TAX RETURN, BUT WE
DO OUR OWN ON OUR PROGRAMME.

Lorn says OKAY.

Tracey says AND HIS
ACCOUNTANT ALLOWS BOTH
DOG FOOD AND CAT FOOD TO BE
DEDUCTED BECAUSE HE
CONSIDERS THE DOG TO BE A
GUARD DOG AND THE CATS TO
KEEP MOUSE DOWN AND WE HAVE
BOTH OF THOSE AND THAT'S
WHAT WE DO.

Lorn says RIGHT.

Tracey says IS THAT A
LEGITIMATE TAX DEDUCTION?

Lorn says I'LL SAY
IT'S INNOVATIVE.
I THINK THE BEST YOU COULD
ARGUE IS THAT LIKE A CAR,
THERE'S TWO COMPONENTS TO.
THERE'S A PERSONAL COMPONENT
AND THERE MAY BE A BUSINESS
COMPONENT.
AND I THINK THAT TO THE
EXTENT THAT YOU HAVE THE DOG,
DO YOU USE IT SOLELY FOR AS
A GUARD DOG OR IS IT
ACTUALLY A FAMILY PET AS
WELL?

Tracey says NO, HE'S AN OUTSIDE DOG,
SAME WITH OUR CATS.
I MEAN, WE'VE HAD SUCH MICE
PROBLEMS WITH CHEMICAL THAT
WE WENT BACK TO THE OLD WAY,
THE CATS AND THEY DO THE
BEST JOB.

Maureen says THEY DON'T EVEN
PET THESE PETS.

Lorn says YEAH, I
DON'T WANT YOU LOOKING AT
THEM, PETTING THEM, GIVING
THEM ENCOURAGEMENT.
BUT IN THAT SITUATION, JUST
LIKE IF YOU HAD A SECURITY
SYSTEM IN YOUR OFFICE AND
YOU HIRED GUARD DOGS -- YOU
DON'T HIRE THE DOGS, BUT YOU
HIRE -- THE COST OF THE DOGS
WOULD CLEARLY BE DEDUCTIBLE.
AND I THINK LEGITIMATELY IF
YOU'RE TELLING ME IT'S
SOLELY BUSINESS RELATED
THOSE ARE LEGITIMATE
EXPENSES.

Maureen says WHAT WAS THE
OTHER QUESTIONS TRACEY?

Tracey says MY HUSBAND,
BESIDES HAVING THE FARM HE
WORKS OUTSIDE THE HOUSE FOR
AN EMPLOYER, BUT HE WORKS IN
THE HOUSE FOR THIS EMPLOYER.
CAN WE DEDUCT THOSE
EXPENSES?

Lorn says DOES HE
HAVE AN OFFICE AT THE
EMPLOYERS' PLACE?

Tracey says YES, HE LIVES IN
THE OFFICE, WITH HIS
COMPUTER 24 HOURS A DAY.

Maureen says IS THAT IN THE
HOME OR THE EMPLOYERS?

Tracey says NO THIS IS IN OUR
HOME BECAUSE THE EMPLOYER
WORKS OUT OF HIS HOUSE AND
WE WORK OUT OF OUR HOUSE FOR
HIM.
HE GETS A.

Lorn says YES, YOU
NEED THE EMPLOYER TO GIVE
HIM A FORM CALLED T-2200 AND
YOU CAN DEDUCT A PORTION OF
THE EXPENSES RELATED TO THE
OFFICE YOUR HUSBAND IS
USING.

Tracey says RIGHT BECAUSE HE
PAYS FOR THE PHONE BILLS BUT
IT'S JUST ELECTRICAL AND
FURNITURE, BASICALLY.

Lorn says YEAH, GOOD.
OR PHONE, UTILITIES, REPAIRS
AND MAINTENANCE, YOU CAN'T
DO -- AS AN EMPLOYEE, YOU
CAN'T DO MORTGAGE OR
PROPERTY TAXES.

Maureen says NO?

Lorn says NO.

Maureen says AND WHAT ABOUT
COMPUTER DEPRECIATION?

Lorn says TO THE
EXTENT AGAIN -- MAY BE A
PERSONAL ELEMENT, YOU'VE GOT
TO BE CAREFUL AS HOW MUCH OF
THE COMPUTER YOU'RE
DEPRECIATING.
MAYBE 30 PERCENT BUSINESS, 75 PERCENT
PERSONAL, OR VICE VERSA, SO
YOU HAVE TO HAVE A CASE TO
SUPPORT IT IF YOU GET
QUESTIONS.

Maureen says QUICK QUESTION.
CAN YOU DEDUCT TAX SOFTWARE
FOR PREPARING YOUR INCOME
TAX?

Lorn says NO.

Maureen says ALL RIGHT, WE'LL
JUST LEAVE IT THERE THEN.
THANK YOU VERY MUCH.
SEE YOU NEXT YEAR.

Lorn says LOOK
FORWARD TO IT.

Maureen says REMEMBER
EVERYBODY, YOU HAVE THAT
EXTENSION TO MIDNIGHT ON
MONDAY MAY 1st.
LORNE KUTNER IS AN
ACCOUNTANT WITH MINCE AND
PARTNERS IN TORONTO.
THE CERTIFIED GENERAL
ACCOUNTANTS OF ONTARIO
OFFERS FREE TAX PREPARATION
FOR SENIORS AND PEOPLE WITH
LOW INCOMES.
YOU CAN REACH THEM AT:
416 322-6520 OR TOLL FREE AT
1-800-668-1454
FOR TAX INFORMATION AND
FORMS YOU CAN FIND AT THE
REVENUE CANADA WEBSITE:
WWW.RC.GC.CA
AND THAT’S IT FOR THIS EDITION
OF MORE TO LIFE. THANK YOU FOR
WATCHING. WE’RE HERE MONDAY THROUGH
FRIDAY AT 1 O’CLOCK.

Watch: Taxes (April 13, 2000)