Countdown To The April 30th Deadline

by Tax Guy - Burlington Accountant on April 16, 2010 Print This Post Print This Post

Before you know it, the April 30th deadline will be upon us!  If you have not started your taxes yet you still have lots of time.

Did you know that you can file your taxes online using TurboTax (Formerly QuickTax)?  By using the TurboTax on-line version, you can do your taxes anywhere you have access to a computer.  With the TurboTax online edition, you’ll find how easy it can be to do your taxes:

  • You may uncover deductions you might have missed,
  • You can get your refund in a little as 8 business days,
  • You don’t pay until you file, and
  • You have access to expert support.

Give the TurboTax on-line edition a try today.

Filing Tips For 2009

  • Capital Losses– Remember capital losses can only be claimed against capital gains.  Any excess can be applied back to 2008, 2007, or 2006 or carried forward indefinitely.  If you have excess losses in 2009, file form T1A to carry back your losses and recover the related tax from those years.
  • Pension Splitting – If you have eligible pension income in 2009 up to 1/2 half may be allocated to your spouse.
  • Charitable Donations– Combine your charitable donations with your spouse and claim them on one return.  This will provide your biggest bang for the buck.
  • Medical Expenses – The amount you can claim is based on your income.  Combine your medical receipts with your spouse and have the lower income spouse claim them.
  • Credits – Remember to claim all of your credits.  These include:
    • The child tax credit
    • Child fitness amount
    • Public transit pass credit
    • Adoption expense credit
    • Tuition and eduction amounts transferred from a child

 The TurboTax optimizer tools will capture most of these deductions and credits.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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{ 20 comments }

help April 24, 2010 at 5:01 pm

I have no T4’s for 2009….just T3 and T5 …cap gain an div…..how do i fig. out CPP and EI payments ….i have the heath tax sorted.

Tax Guy April 24, 2010 at 6:35 pm

Hello Help:
I assume that since you don’t have a T4, that you didn’t have employment income. If this is the case you don’t pay into EI and your CPP would be calculated on your tax return for self-employment (aka business) income. CPP is not paid on other income.

Capital gains and losses calculated by taking the proceeds and deducting the cost. You must calculate this manually from your trade confirmations.

help April 26, 2010 at 7:19 am

Thanks for the very good info…i’m still looking for work. ei has run out long ago…living off of savings…my IA send me a 12 page report, showing Cap. gain and his Fees of 2100$ what line number would that go on and do i have to send in a copy of his year end report(12pgs.) with my Tax forms?…..the up side is,i only pay tax on 50% of my cap. gain. Thanks again for your wonderful help.

Tax Guy April 26, 2010 at 2:03 pm

help:

The commissions paid to yout investment advisor are added to the cost of investment purchases and deducted from the proceeds of sales. They reduce the adjusted cost base.

help April 27, 2010 at 8:54 am

Well i own the shares, he trades them for me , the Fee summary shows monthly mgm. fee next line gst, then the next month .an so on……know were it is show en cap gain minus his fees…not poolled money not a mutual fund….i don’t think(schehedule4) line 221 would be it, maybe line 254 would work?

Tax Guy April 27, 2010 at 3:10 pm

If it is a managed account the fees are then deductible provided the advisor is not receiving a commission.

help April 27, 2010 at 4:20 pm

When i did the trading my self, i would get a year end summary ,and a T3 showing my net cap gain. Now that i have a so called IA (broker) doing this ,they send me a year end report 12 pages , but no T3 showing net Cap. gain….”This info is prepared to assist you in the preparation of your tax return”….here’s what i’m going to do- take the total Cap. gain from this report, minus the total Fees an taxes paid….an put this Value as Cap gain. Now do you think i should make a copy of this report an send it in with my return or just hold on to it an if CRA ask for proof , i’ll send it to them. I’m leaning to the latter, save on the postage 🙂

Tax Guy April 28, 2010 at 7:56 am

help:
If you were receiving a T3, it sounds like you held mutual funds as opposed to individual stocks and bonds. The mutual fund buys and sells securities and allocates the net capital gains, interest, dividends and foreign income to you.

You now have a managed account where the IA does all of the trading for you and charges a fee. The only difference between a mutual fund and a managed account is with the managed account, you own the securities and benefit for net capital losses (mutual funds cannot allocate losses generated inside the fund!). Notice I said nothing about the managed account fees begin deductible! With the managed account you deduct the fees from your taxes yourself … with the mutual fund the fund deducts them and allocates them to you.

Of course owning the underlying securities directly is has more administrative work, but you have full control over them via the IPS.

dj April 27, 2010 at 9:43 pm

Here’s what i did ,schedule 3,line 131-total cap gain(2),then minus(4) outlays and expenses(put the total fees an taxes paid)that gave me my net Cap. gain for line 132 , add in T3 cap gains Line 176, total it up Line 197 then do the 50% line 199 , then put that amount on line 127 of T1…….so tax guy did i do it right?

Tax Guy April 28, 2010 at 9:07 am

Hello DJ:
Line 131 is the proceeds you received from selling your securities. Sub-columns (3) and (4) are used to determine the cost base. (3) Is what you paid for the securities, plus the original commission paid. Column (4) is normally not required for securities sales. The amount in line 132 is the difference between the Proceeds of Disposition (2) and the Adjusted Cost Base (3).

1/2 of this amount is 199 and then moved to line 127 on the return.

Help April 28, 2010 at 11:20 am

Hi tax guy, what i don’t get is why my broker didn’t give me a one page summary, showing Cap gain,fees,taxes….then net Cap gains. Then could put this with my S3/T1 filing. So what paper work should i put with the S3, or should i wait for the CRA to ask for it. also looking at your comment to dj…what number is above line 131 and it looks like he put Fees at (4)….is that wrong ? Just wanted to say your help is most welcome….all the Tax guides i have read are not very clear on how to handle Cap gains and cost

help April 28, 2010 at 11:27 am

What does IPS mean ?

Tax Guy April 28, 2010 at 1:55 pm

help:
IPS stands for investment Policy Statement.

Your broker can probably give you a summary of investment counsel fees paid, but the capital gains and losses cannot be delivered by any brokerage firm. Here is why:

An investment dealer can only tell you what you paid for a security bought through their firm or received though a sale through their firm. Since the cost base an capital gains are determined at the security level (i.e. common shares of ABC) and that the same security can be held in multiple forms and at multiple brokerage, it is impossible for them to tell you what your gains and losses truly are.

Say you have 100 shares of ABC Co that you bought 5 years ago through Big Broker Co. for $10 per share. They you open a managed account at Niche Broker Co. and the money manager buys 250 shares of ABC Co at $12.50 per share. Three month later the Niche Broker Co. money manager sells out of ABC Co at $14.00 per share.

If Niche Broker Co. send you a slip saying you had a capital gain of $375 and you add $187.50 to your income, both you and the broker may end up owing penalties to the CRA because you didn’t report enough of the capital gain. This is because the 100 shares bought elsewhere are included in your ACB (the actual gain would have been $553.57).

help April 28, 2010 at 5:42 pm

Well that is true over the time your taking about.,looks like i’ll need a pro to do my taxes at some point. But i just started with this guy last year (2009) he sold some in late May, then started re investing mid. june to 1st week in August .then sold some Oct. to purchase some bonds….he’s doing a good job,all the money has been reinvested , now i have this report from him ,showing X amount Cap. gain (my thinking here is this should go on line 131). On the last page of this report shows Fees an taxes, we all know were that money came from, but it’s not reported in the report from were(up front capital ?)…..got a msg. from him- “that’s all the info will be sending”

Help April 28, 2010 at 8:58 pm

Ok i fig. it out….it’s T5008/RL-18 …my eyes are going….Fine print, I’ll get back after i fill out S3 part 3 again ….thanks for hanging in there with me Tax guy

help April 29, 2010 at 11:08 am

All right here it goes. to deal with this T5008….Schedule 3 part 3.—(1)2009.(2)230…(3)207…(4)3….column 2 minus columns 3 and 4….=(5)20. so line 131 has 23 and line 132 has 20….add in line 176 …2 ….total for line 191 is 22….do the 50% and we have 11 on line 199.enter on line 127 of T1…..so tax guy hows that look

Tax Guy April 29, 2010 at 12:19 pm

Help:

The T5008 shows you the cost base of the transactions through the broker. You are responsible for calculating and reporting the adjusted cost base using the information in Box 20 and the reporting the ACB in column 3 of schedule 3.

The amount in box 21 is the proceeds of the sale and is reported in column 2.

help April 29, 2010 at 1:37 pm

I wish i had a form with number boxes…here’s the info i have start money give to broker “207k” , info on t5008/rl-18 cap. gain 23k and fees of 3k….now working with these numbers i’m trying to be a good guy and pay my taxes on my Cap. gain an not have CRA on me for reporting this wrong …..i’m going to google Ajusted cost base. an see if i can fig. this out.

help April 29, 2010 at 2:11 pm

Wow this ACB is a moving target….so tax guy lets say i just put in the number From the t5008/rl-18 23k Cap. gains….do you think the CRA will come back an bite me for lack of info i don’t have 🙂

help April 29, 2010 at 2:42 pm

Ok, just got off the phone with the CRA….the girl said put the 23k in column 2, put the 3k in column 4 , minus 3 from 23k an put that in column 5(20k)…..she said “your broker has E filed the t5008” now that was simple …..Thanks Tax Guy for your help

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