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2011 Canadian Tax — Children’s Art Tax Credit

January 10, 2012

The 2011 Tax filing time is approaching and SmartCanadian will bring you some tips on what has changed compared to the previous years.

One of the new additions from 2011 is the ‘Children’s Art Tax Credit’ (CATC).

You can claim a maximum of 500 dollars paid as refundable tax credit per child off the fees paid in 2011 related to the cost of registration or membership of your, your spouse’s or your common-law partner’s child to develop ‘artistic, cultural, recreational or developmental activity’.

Programs that can be claimed:

Language Programs, Public Speaking, Chess, Music, Scouting, Girl Guides, Crafts, Painting, Drama, Photography, Pottery and Tutoring.

 

Criteria for the Children’s Art Tax Credit (CATC)

  • The child must have been under 16, or under 18 if he or she receives Disability Tax Credit, at the beginning of 2011.
  • The Program does not fall under a category for which a claim can be made under the Federal Children’s Fitness Amount.
  • The Program is not part of a school curriculum.
  • It has to be ongoing, with sessions at least once a week and lasting a minimum of eight weeks, or a minimum of five consecutive days.
  • It has to be supervised, and
  • It has to be suitable for children.

 

CATC Application Should Meet At least One of the Following Criteria:

  • The program should contribute to the development of creative skills or expertise in an artistic or cultural activity;
  • The program should provide a substantial focus on wilderness and the natural environment;
  • The program should help the child develop and use particular intellectual skills;
  • It should include structured interaction among children where supervisors teach or help children develop interpersonal skills; or
  • It should provide enrichment or tutoring in academic subjects.

 

Costs Not Covered for CATC

  • Traveling, accommodation and food.
  • If the program is provided by a person under 18, or by the spouse of the tax-file.

 

CATC Receipt Should Include Following:

  • providing organization’s name and address
  • name of the eligible program
  • amount received, date received, and amount eligible for the CATC
  • full name of the payer
  • full name of the child, and the child’s year of birth, and
  • authorized signature (not necessary for electronically generated receipts)

For more information: check the appropriate Canada Revenue Agency (CRA) page.

More on the Children’s Arts Tax Credit (CATC) from CRA

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Free Goodies Non-Taxable

December 25, 2011

We all love when we win free goodies at the stores.

But do you know that in Ontario, they also come tax-free?

With the new Harmonized Sales Tax (HST), replacing the federal General Services Tax (GST) and the Provincial Services Tax (PST) which were levied separately, there is some confusion about what are taxed.

Yes, this is something even some stores forget; for example, if you have a coupon which provides you something for free, then that product is not taxable under Ontario’s tax law.

 

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More On Aeroplan Miles

December 7, 2011

Aeroplan is running a special conversion promotion program until December 12th.

The program allows your points from other, partner programs to be converted into Aeroplan Airmiles.

The Partner Programs include Starwood Preferred Guest (SPG), Marriott Rewards, Hilton Honors, Points.com and Hertz.

Aeroplan is also offering bonus Aeroplan miles when you convert. For exazmple, if you convert 5,000 Aeroplan Miles or more, you will get 1,000 Aeroplan

Aeroplan

Image via Wikipedia

Miles.

But is it really worth to collect all those points? Is it worth to buy, for example, a TV set doing your own research and at the store offering the best discount, or through the Aeroplan Miles?

Above all, collecting points is a science. You collect the cheapest way, so that when you have enough of them, whatever you buy is a bonus.

For example, gas prices do not vary a lot from gas company to company. So if will not be a bad bargain to collect points there, and then if you use the collection to buy something, it is a bonus.

The Toronto Star’s Jennifer Stewart has an interesting column on Aeroplan Miles.

 

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Breaching A Tenant-Landlord Contract

April 2, 2011

 

When you move into an apartment as a tenant, you have rights and obligations.

One of the key points of a tenant-landlord agreement is that it allows the tenant to live in the apartment for a specified period of time, usually a year, without a rent increase. On the other side, the tenant also commits to live in that apartment for that one year.

What happens if the tenant wants to leave? There could be a number of reasons, such as the need to move because of work-related issues.

A recent article in the Toronto Star has some interesting points.

Talk to the landlord to see whether the contract could be ended before the stipulated time.

The tenant can sublet, but he/she will be the tenant with the legal responsibilities.

The tenant can the assign the lease to someone else, and be charged for the processing fees (for example, doing a credit check on the new tenant)

If the tenant is not happy with the condition of the apartment, then the tenant can try to prove why the contract was breached.

The full article on What You Need to Know on Breaking Tenancy Contract.

 

Note that this is meant for Ontario tenants. The rights and obligations of the tenant and the landlord can vary from province to province in Canada and check the provincial Landlord and Tenant Board units for more information.

The Canada Landlord Resource Directory has some valuable Links for the various provinces and territories of the country.

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If You Have Over-Contributed to RRSP

March 29, 2011

The traditional RRSP payment season for 2010 just ended, and in case you suddenly realized that you have over-contributed, don’t panic. There are some avenues for recourse.

First of all, some basic data:

Assume your contribution room for 2010 was Cdn. $ 5000.00. RRSP contributions are voluntary, and you had time 60 days after the end of the year to make the contributions. If the 60th day fell on the weekend, then the following Monday will be the cut-off day.

Case 1:

Assume that you made a miscalculation and paid Cdn. $ 8000.00 in February, 2011.

It means you over-contributed by $3000.00.

What you can do is use the over-contribution towards 2011’s contribution. You have to ensure that you do not over-contribute in 2011. Note that you will have 60 days into next year to complete your contribution for this year.

 

Case 2:

Suppose you paid the $8,000.00 last November.

Under Canada Revenue Agency (CRA) rules, you can do a one-time over-payment of $2,000.00. It means you over-contributed by $1,000.00. The CRA levies a penalty of 1% per month, so you would have had to pay $ 20.00 for the rest of the two months of last year. This has to be paid by Mar. 31, 2011.

After the deadline, the CRA will levy a penalty of 5% of interest owed.

 

Case 3:

As in case 2, but this is not the first time you have over-contributed.

In this case, your over-contribution was $3,000.00, and the CRA will levy a penalty of 1% per month until the end of the year.

If any of the above examples fit you, then you have to file T1-OVP form and pay the interest by Mar. 31, 2011.

You can also check with your financial institution whether they will reverse the contribution. If it is within a month or so they may reverse it but if it is longer than that time they may not be inclined to do that.

 

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Fixed-Rate or Variable Rate Mortgage?

March 2, 2011

Should you sign-up for a fixed-rate mortgage or should you go for a flexible (variable) rate?

This is a question many a house owner, and would-be house owner, faces. Or, in the case you are wondering loud about buying a house, should you in the first place?

Moshe A Milevsky, who is a professor at the Schulich School of Business at the York University, recently wrote a very informative piece in the Toronto Star.

He is flexible in his advice: he wants you to decide based on your assets and liabilities.

For example, if you have a large mortgage, then Milevsky is advising to go for a fixed-rate mortgage.

Read the Toronto Star article titled “3 ways to deal with the rising mortgage”.

 

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Credit Card Analysis – TD Business Travel Visa Card

November 22, 2010

SmartCanadian begins a series of analyses of Canadian Credit Cards.

In Part One, we analyse the TD Business Travel Visa Card.

TD Business Travel Visa Card

This is NOT a free card. The annual free is $149, and additional cards cost $149 each.

Annual interest rate is 19.75% on purchases and 21.5% on cash advances.

How You Earn TD Points

For every dollar you spend, you will earn 3 TD Points.

If you book travel on your card through the bank’s exclusive travel agency, the TD Travel Rewards Centre, then the points triple.

That is, you earn 9 TD Points for every $ 1.00.

Redeeming TD Points

You can redeem your points for many modes and types of travel, including air, package, hotel, car rental or even train travel.

You do not necessarily have to book through the TD Travel Agency.

No seat restrictions, blackout periods or advance booking requirements.

Your TD Points do not expire as long as you posses a card.

How to Book

If you are booking through a third-party agency, charge it your TD Business Travel Visa card and then call the TD Travel Rewards Centre once it is charged to your card and within 90 days of the transaction date of the travel purchase.

If you are booking it through the TD Travel Rewards Centre, points will be automatically redeemed.

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Three Points We Need to Know About Credit Rating

November 11, 2010
Credit cards

Image via Wikipedia

Maintaining a good credit rating is vital for anyone.

While we all know the importance of prompt payment of bills, and trying best to pay in full, there are three points we often forget and can affect our credit score and rating.

  • Generally, too many people asking about your credit rating in a short period of time is not helpful. The exception is when you yourself request a report. So, it is better to keep a tab when you approach agencies that request your permission to check your credit rating.
  • The credit limits on our cards can have a negative impact. The higher the limit, the higher the risk of a lower score. Besides, credit counsellors say having many cards with high limits can affect your score as theoretically, you can borrow all the amount available.
Related articles
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Coupons Can Save Lots of Money

November 9, 2010

Have you ever been frustrated with all those coupon-flyers that are distributed to your home? Or the coupons flying around at the supermarkets?

Well, there is hidden wealth there. At times, you can buy products at discounts of up to 60-percent of their original price.

For example, imagine that a store has a sale on specific tooth brush brand for 99 cents, and then you get a dollar’s worth coupon for the brush? With the Harmonized Sales Tax (HST), you can buy a brand new toothbrush for just 13 cents.

Check this article, titled Double Savings – Use coupons on sale items, at Canadian Accountant Tips, which is a personal financial tips blog.

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Analysis of Sunoco Points Transfer to Petro Points

October 31, 2010
Petro Canada Sign
Image by ceiling via Flickr

One more month still left to transfer the Sunoco Performance Points to Petro Points. So what does it mean for the customer?

First, some basics. Sunoco and Petro Canada are merging in Ontario as part of a deal signed in August, 2010, and while Sunoco has to sell 104 of its Ontario stations, the rest will be converting to the Petro Canada brand.

Both companies announced that beginning Oct, 2010, holders of Sunoco Performance Points can transfer their points to Petro Canada points, at the rate of one to two. That is, if you have 10,000 Sunoco Points, you will get 20,000 Petro Points.

The deadline to convert ends on Dec. 1, 2010, at which point the Sunoco Performance Points system will conclude.

You can however use and earn Sunoco Performance Points until then.

Months Ago, I had done some rough calculations about the pros and cons of each of the major gas station card. Here is that posting titled Analysing Canadian Gas Station Cards.

As you can notice, I had said that spending 2,000 dollars would yield $5.00 in Petro Points while $6.00 in Sunoco.

That it is to say, in simple terms, one would actually lose out in the new deal. However, please note that these analyses were simple math, and did not take into affect the points gathered through using the various brand-linked credit cards and the linkage the gas station companies have with other firms, such as The Bay.

SmartCanadian Posts on Gas Station Cards

Sunoco Performance Points

Petro Points

Shell Canada

Esso Extra Points

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