Children's Arts Tax Credit

The 2011 Federal Budget added a new Children’s Arts Tax Credit in addition to the usual Children’s Fitness Tax Credits.  The credit, worth up to $75 in tax savings per child, is available for children under 16 years of age and applies to a maximum of $500 in qualifying expenditures for programs that:

• contribute to the development of creative skills in artistic or cultural activities (which may include art, music, dance, drama, language, customs and heritage classes, etc.);
• provide a substantial focus on wilderness and the natural environment (Girl Guides, Scouting, etc);
• help develop particular intellectual skills (chess, languages, etc);
• help develop interpersonal skills (public speaking, etc); or
• provide tutoring in academic subjects.

The program must be at least five consecutive days or be a weekly program that runs for at least eight consecutive weeks.  Programs that are part of a school curriculum are ineligible.   Further information is available on the CRA website.

Remember to keep all receipts and provide them to your accountant for preparing your personal tax return.

Completing your Personal Tax Return

There are a number of non-refundable tax credits that you may qualify for.  Click here to read a publication from Canada Revenue for information for all the tax credits available for you. 

Checklists

This personal tax checklist will help you to assemble the information our office will need to prepare you personal tax return.

This year end checklist will help you to assemble the information our office will need to prepare your corporate financial statements and tax return.

EcoEnergy Retrofit program 

The 2011 Federal Budget extended the previous EcoEnergy program to March 31, 2012 with two main changes:

• Before any work is done, you must first register for the program and have an pre-retrofit energy evaluation performed; and
• during the post-retrofit evaluation, you must provide receipts to the energy adviser to ensure the work was done in the allowable period.

The purpose of the EcoEnergy program is to improve the energy efficiency of existing homes and reduce energy costs.  Grants of up to $5,000 per property are available.  If you own multiple properties, such as vacation cottages, rental units, etc., you can apply for up to $5,000 for each property.  Further information is available on the NRCan website. 

Keep in mind that the EcoEnergy Retrofit program only has a budget of $4 million.  The program may end early if the grants paid out reach this maximum.  So, if you intend to take advantage of the program, start making plans now.

Tax Tips & Traps

The latest Tax Tips & Traps issue includes helpful information on the following topics (and many more):

• Tax Planning 
• Remember that February 29, 2012 is the deadline for RRSP contributions for the 2011 tax year.  Consider contributing to a spousal RRSP to achieve income splitting in the future.
• Consider applying for Canadian Education Savings Grant of up to 20% of eligible RESP contributions, to a maximum of $500 per child per year.  More information is available at the HRSDC website.
• CPP Changes - As of January 1, 2012, the rules for CPP will change.  Employed individuals under the age of 65 will now have to contribute to CPP even if they are receiving CPP benefits.  Between the ages of 65 and 70, employed individuals will have to contribute to CPP unless they elect to stop contributing.
• Old Age Security (OAS) - Apply for OAS as soon as you reach the age of 65.  Failure to apply and you could lose OAS payments because the Government only has to make retroactive payments for a maximum of 11 months.
• Cell Phone Allowances - Employees who are reimbursed for a cell phone service plan may have a taxable benefit if the allowance covers more than a basic plan and the charges related to personal use of the phone exceed the basic plan cost.

Please note that the Tax Tips & Traps link will open in Acrobat.com and may take a few seconds to load. To view previous Tax Tips & Traps issues, visit the Newsletter section of our website. 

Accounting Standards for Private Enterprises

There have been significant changes to accounting standards for private enterprises with fiscal years beginning on or after January 1, 2011.  Corporations requiring assurance engagements (reviews or audits) will need to choose between adopting the new Canadian accounting standards for private enterprises (ASPE) or International Financial Reporting Standards.

The article Conversion to Accounting Standards for Private Enterprises, published by the Canadian Institute of Chartered Accountants, discusses the purpose of the new ASPE, some important considerations for transitioning into the new accounting standards and the options available to private corporations.

Auditing Standards

There have also been some important changes in Canadian Auditing Standards (CASs) that will take effect for financial statement audit for periods ending on or after December 14, 2010.

The article New Canadian Auditing Standards, published by the Canadian Institute of Chartered Accountants, discusses the new CASs and the impact on the way the audit report will be presented, as well as some questions the board of directors should be asking.

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