Friday, 30 March 2012

The Ontario Budget 2012 ... PC what they are saying! Go Blue Jays!

With eight provinces and the federal government in deficit, political leaders across the country are faced with a similar challenge: How do we encourage job creation while regaining control of spending? The responses vary. Some have taken immediate action, while others, like Ontario, have moved at a glacial pace.
In the province that has long been an economic leader, 600,000 men and women are now unemployed. Yet, this week’s provincial budget will neither stimulate the economy nor aggressively attack the deficit. In the next year, the deficit will remain constant, leaving a staggering $15.2-billion gap between revenue and spending. Job creation is forecast to decline.
In New York this month, I met financial experts to discuss Ontario’s debt. Their advice is consistent with the way I would have approached the problem. For starters, I would not have accepted anemic private-sector growth or a slow response to a looming $30-billion deficit.
Businesses can invest anywhere in the world. If they’re going to come to Canada, they’ll look for a few basic things. They want a credible plan to eliminate deficits and get debt under control, and they want a competitive tax environment. Businesses realize that governments burdened with debt won’t be able to create a competitive tax climate and build and sustain infrastructure – two key things that attract investment, expansion and new jobs.
They need low tax rates, so they can retain more of their earnings to expand and hire. They want certainty about government tax policy, too, so the rules don’t change partway through the game. In Ontario, for example, this week’s budget would abandon a promised business tax cut. That’s not how you build an economy. A recent estimate by a leading economist said this measure alone could result in a loss of 30,000 jobs over 10 years. A higher tax burden than businesses had planned for amounts to a tax increase.
Affordable energy is another cornerstone of growth. The provinces that have taken steps to assure a steady supply of power at fair rates are well positioned for growth. Those like Ontario, where power rates are being driven up by subsidies that pay wind and solar producers between two and 10 times the going rate for energy from conventional sources, are not.
We need to pay attention to what’s happening in the world. One of the key factors in Germany’s success, for example, has been a strong apprenticeship system. I have advocated an aggressive apprenticeship plan for Ontario. The failure to act on this has left good skilled trades jobs unfilled.
Growth won’t happen unless government gets the fundamentals right. Our priority must be policies that create the conditions for growth, and that has to be accomplished while making significant structural changes. We can’t cut our way to prosperity; we need to grow our economy, too.
Every day that government puts off difficult decisions adds to debt and narrows our room to manoeuvre in the event of a sudden economic shock. This has been Greece’s sad experience.
The challenges facing Canadian governments may vary, but the underlying principles are the same. When governments control spending, ensure responsive regulation and keep business taxes low, labour markets flexible and energy affordable, jobs and growth will follow. Some provinces realize this, and will pull out of deficit sooner than Ontario. Their next challenge will be to tackle accumulated debt.
As Canadians, we need to reframe the deficit and debt issue. This is not just about government. It’s about the economy, jobs and prosperity.
Tim Hudak is the leader of Ontario’s Progressive Conservative Party.

Mariner motel's advice just start saving early
cause retirement age is going to keep on increasing ...
Eat right, live a healthy balance life and
pay off that debt as soon as you can ... 
Take a vacation once in a while
Follow your bliss
Have an attitude of gratitude always!

For all our clients past and present.
THank You to all our suppliers, workers and family
who have made the Mariner Motel successful for so
many years.  THANK YOU!

Tuesday, 13 March 2012

2012 tax filing season: 5 triggers that could lead to an audit

2012 tax filing season: 5 triggers that could lead to an audit

A Canada Revenue Agency employee at the CRA tax return storage facility in Ottawa.
A Canada Revenue Agency employee at the CRA tax return storage facility in Ottawa.
Canada Revenue Agency photo
The dreaded brown envelope arrived just after Christmas. Instant fear! Would it be a full-blown tax take down (called a field audit) or just an inquiry? I’ve experienced the former and a colonoscopy is preferable.
“Our records indicate that you have received income that appears to be partially reported, or not reported on your income tax return,” the Canada Revenue Agency form letter stated. At least the CRA was kind enough to enclose a preaddressed mailing label.
I had been nailed by the T-slip matching program that ferrets out income reported by employers as paid out but not noted as income by the likes of me. The offending amount was $537.83 earned from CBC. The cheque should have been issued to my company not me personally. I deposited in my personal account, transferred it to my company and listed it as revenue, thus compounding the error.
Needless to say the very best way to avoid the beady eye of the CRA is to ensure all T-slips are reported, including those you haven’t received. T3 and T5 slips which detail investment income from interest, capital gains, dividends and mutual funds are notoriously late arrivals.
Related: 11 questions you were afraid to ask the taxman
Because T-slips can easily be misplaced, forgotten or occasionally not arrive at all, a great defensive strategy is to compile a list of expected slips. Keep it handy on your computer’s desktop and add to it as money comes your way, rather than trying to re-create all income sources while completing your tax return.
With roughly 1.3 million returns reviewed annually, chances are you will receive one of those brown envelopes more than once during your working life. An audit is rarer, only 200,000 Canadians suffer this fate. Still, dealing promptly with any CRA request lessens the chances that the agency will dig deeper into your return.
Usually you will have 30 days to respond to a query. In my case, I slogged away unsuccessfully trying to get the CBC to re-issue the T-slip. Despite numerous calls to the CRA to explain that I was working on the problem, time ran out and my personal return was re-assessed. I owed $116.61 and the CRA levied $4.73 in arrears interest. Not the end of the world but annoying and if I don’t cough up the money by March 15, I risk a more extensive review or audit.

Related: How to avoid these 8 tax-filing  mistakes 
Here are three more common signals that might trigger a second look at your return by the CRA.
1. Double dipping: It’s bad enough when a marriage or common-law relationship breaks down. Even worse is the fact that separated spouses often receive special CRA scrutiny. Check with your ex to ensure only one of you claims things such as the children’s fitness credit (line 365), tuition transfer (line 324) or the amount for an eligible dependent (line 305).
2. Change: If your deduction history deviates from the norm, the CRA might come calling. Say you normally have $500 or so in charitable donations annually, then one of those heart-tugging disasters, such as the recent Somali famine, encourages you to hand over a couple of thousand to help out. The increase in your charitable claim, though laudable, is a red flag.
The lesson here is to keep documentation and receipts close at hand especially when there is a big change in your deduction pattern.
3. Self-employment: According to Industry Canada the number of self-employed grew 12 per cent in the first decade of this century. And this is a gold mine for CRA reviewers, as small business owners and the self-employed are audited more often than the general population. Tax software can lead do-it-yourselfers through the process of listing business expenses. Still, it may be worth spending the money to consult an accountant to ensure you are minimizing the chances of an audit.
Related: What’s new for the 2012 tax filing season
Here are five specific deductions at the top of the CRA’s second look list.
1. Other deductions (Line 232). The CRA loves to zero in on this category as Canadians try to deduct funeral expenses, wedding costs, loss on the sale of a home and divorce or separation legal fees.
2. Caregiver amount (Line 315) — You can claim the caregiver amount for an eligible dependent over age 18 with a net income of less than $18,906 and who has a mental or physical infirmity. But don’t try it if that person isn’t living with you. And if your 22-year-old broke her ankle skiing, that doesn’t count either.
3. Medical expenses (Lines 330 and 331) — Medical expenses are one of the most confusing categories for tax filers and, according to the CRA, often riddled with mistakes. Guide RC4064 isn’t perfectly comprehensible, (the CRA scores a C in my book for plain English) but it will clear up some confusion for individuals and families.
4. Student loan interest (Line 319) — You may be groaning under the load of student debt but the CRA won’t let you deduct interest paid for a line of credit or family loan.
5. Education and textbook amounts (Lines 321 and 322) — If the number of months you are claiming doesn’t match the number of months you were a student the red flag will be raised. Students often make the mistake of claiming for the academic year, rather than the calendar year.
One caution, there is no way to be completely safe as the CRA randomly selects an unknown number of returns for review each year. However, you can increase the odds of keeping a CRA inquiry or audit at bay by checking the Common Adjustments web page. Be especially vigilant in maintaining records and receipts for the red flag areas.
Related: Where to get free tax advice

Mariner Motel
Thank you!