2019 Tax Filing Season News

Personal Returns

Canada Revenue continues to review personal tax returns, usually after the original filing has been assessed. A review is not an audit; however, you must submit documentation to support deductions claimed. The most commonly reviewed categories include childcare, medical expenses, donations, and foreign taxes paid.

REMINDER: If you have foreign assets with a cost basis of $100,000 or more, it is important to file Form 1135 by your filing deadline (April 30th or June 17th). CRA levies a late filing penalty of $25/day, to a maximum of $2500. Form 1135 is filed separately from an individual tax return.

Corporate Returns

Effective January 1, 2018, the federal small business tax rate has been reduced to 10% (up to the first $500,000 in corporate after-tax income.)

New passive income rules will affect corporations with at least $50,000 per year in investment income. The majority of our clients will not be affected by these changes. In cases where there is a tax impact, we will notify you.

US Returns

Sweeping new US tax legislation was passed in late 2017, and many of the provisions took effect on January 1, 2018. Those most affected by the new tax laws include artists (and others) who work on W2s and incur out of pocket expenses (such as agent commission), as well as US persons who own at least 10% of a Canadian Corporation.

The following ITINs expired on December 31st, 2018: those not used in the last three years, and those issued before 2013 with middle digits of 73, 74, 75, 76, 77, 81, or 82 (e.g. 9XX-73-XXXX). ITINS can be renewed using form W-7.