Kundan Mulani, CPA

*📣INCOME TAX PREPARATION FOR PERSONAL, SELF EMPLOYED & CORPORATIONS RETURN*

Tax season for 2021 is approaching. And now more than ever, it's beneficial to get *your tax returns filed and get the money back in your pocket*, as well as any other government benefits that may come from being up to date with your tax filing. *24 hour turnaround* if you have all your information available. Save your time and have me *E-file* your taxes for you.

🎯 lndividual returns (for returns with employment income, retirement income, tuition credits, medical expenses, RRSP deductions and withdrawals and other standard deduction)

🎯 Self-employed return along with GST/HST return

🎯 Corporation returns

I can also help you submit returns for earlier years_. _Got 4, 5, 6 or more years to do_?

*I can help at an affordable BULK RATE*

*SPECIAL RATES FOR STUDENTS AND SENIOR CITIZENS*

*You can reach out to me here for any inquiries*

📞+1 782 234 6410
✔️[email protected]

Tax tips for landlords

Income from your rental property(s) is taxable, but not all of it. You can reduce your taxable rental income by deducting specific expenses.

Generally, you report all income on your tax returns for the year you receive it. For example, if you collect the rent for January 2020 in December 2019, you report it as income on your tax returns for 2019. Similarly, when you get a deposit for the first and last month’s rent, it must be taxed in the year you receive it. However, if you plan to return the security deposit to the tenant at the end of a lease, don’t include it as income.

‍If the tenant presents you with goods and services in exchange for the rent, you have to report their value as rental income when submitting tax returns for the year you received them.

The Tax Impact of Your Rental Property‍

Tax consequences vary depending on who owns the rental property:

1. Personally

2. In a partnership

3. In a corporation

1. Personally

Your rental property is classified as a sole proprietorship if you own and personally manage it. As a self-managing landlord, your property isn’t viewed as a separate legal entity. This means it will be taxed based on your personal income.

You’ll have to submit a Statement of Real Estate Earnings - Form T776 for every rental property you personally own. This form summarizes your rental revenues and deductions and helps to compute the taxable income to be reported on your personal tax returns.

2. Partnership

If you and your friend(s) or family member(s) joined forces to acquire a rental property(s), CRA considers you as co-owners and your business a partnership (once co-ownership is established). A partnership isn’t a separate legal entity, so no separate tax return is required.

Normally, the partnership rental income is shared among the partners, based on a ratio set out in the partnership agreement. As a partner, you have to incorporate your respective share of the rental income in your personal by submitting a Form T776 indicating your percentage of the partnership.

3. A Trust/Cooperation

If the rental property belongs to a corporation, you’ll have to consider multiple aspects when you want to determine the rental income tax rate in Canada. Unlike the other two, a corporation is a separate legal entity. The tenant pays the business, and the business is, thus, responsible for the taxes.

The corporate tax rate is made up of both the federal tax and provincial tax. The federal rate is 38% and is applicable in all provinces. However, the provincial tax varies from province to province. Since retained earnings (the funds that remain after the corporation pays taxes) are distributed as dividends to the shareholders, this will count as personal income and each shareholder will be taxed on their marginal tax rate.

To avoid double taxation, the tax rate is usually reduced where dividends are paid to shareholders.

Deductible expenses: These also apply even if the property(s) in question is temporarily vacant. Some of the deductible expenses include:
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· General cleaning and maintenance

· Repairs

· Advertising costs

· Local property taxes

· Depreciation

· Commissions

· Mortgage interests

· Insurance premiums

· Management fees and office expenses

· Utilities

· Specific travel/vehicle expenses

· Garbage removal fees

· If you have a vacation or second home that you rent out once in a while, you'll also need to consider this for tax purposes



Happy to serve you for your questions.
Kundan Mulani, CPA
📞 +1 782 234 6410
📧 [email protected]
https://kundanmulanicpa.wixsite.com/website

Rental Properties & Taxes

The impact of taxes on your rental property depends on who owns the property. Normally, rental properties can be categorized in various ways:

Personally Owned - If the rental property is owned in your name it is considered a sole proprietorship. For this you would have to submit a form T776 Statement of Real Estate Rentals (which gives a summary of all your rental revenues and deductions) for each of the rental properties that you own.
Partnership - If you have multiple people, other than yourself, owning a property, CRA will consider you as co-owners. Similar to a sole proprietorship, a partnership is not a separate legal entity which means no separate tax return is needed.
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What Expenses Can I Deduct?
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As a rental property owner, there are expenses that you can deduct from your rental income for tax purposes even if your property is vacant. Tracking all your expenses for your rental property throughout the year can save you time during tax season. According to the CRA, here are a list of deductible expenses:

· Advertising

· Insurance

· Interest and bank charges

· Office expenses

· Professional fees (includes legal and accounting fees)

· Management and administration fees

· Repairs and maintenance

· Salaries, wages, and benefits (including employer's contributions)

· Property taxes

· Travel

· Utilities

· Motor vehicle expenses

· Other rental expenses

· Prepaid expenses

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Do I Need to Pay Income Tax on Rental Income?
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If the rental properties are owned as a Sole Proprietorship or Partnership, Yes. You must pay income tax in the same way that you pay for your income at your tax bracket. The net rental income would get added to your total income (line 15000) and you would be taxed appropriately based on which tax bracket your income would fall in.

Happy to serve you for your questions.

Kundan Mulani, CPA
📞 +1 782 234 6410
📧 [email protected]

RRSP TIMELINES

The RRSP contribution deadline in Canada is always 60 days past December 31st into the new year to be used for tax year ending December 31.

This means you have more time to estimate your tax liabilities.

If you think you will owe taxes to CRA, you still have 60 days (first 60 days of the new year) to contribute to your RRSP.

Contributions made to your RRSP after the first 60 days can’t be claimed on your current year taxes.

For example, if you contributed on March 5, 2021, you cannot claim it on your 2020 taxes. It will be eligible for the 2021 tax year.

You can contribute to an RRSP until December 31 of the year you turn 71.

If you miss the deadline or don’t reach your RRSP contribution limit not to worry

Unused portions of your contribution room roll forward indefinitely, year-over-year, increasing your RRSP deduction limit on your taxes

Kundan Mulani, CPA updated their website address.

Federal & Provincial Tax Brackets & Rates

To be prepared for the next tax season, it is important to know where your income for the year falls within the tax brackets. This would give you insight about when and how to claim certain deductions as well as credits. Here is some information from the CRA about Federal Tax Bracket Rates for 2021:
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Federal tax rates for 2021

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● 15% on the first $49,020 of taxable income, plus
● 20.5% on the next $49,020 of taxable income (on the portion of taxable income over 49,020 up to $98,040),plus
● 26% on the next $53,939 of taxable income (on the portion of taxable income over $98,040 up to $151,978),plus
● 29% on the next $64,533 of taxable income (on the portion of taxable income over 151,978 up to $216,511), plus
● % of taxable income over $216,511
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Provincial tax bracket rates 2021

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Tax rates apply to personal income earned between predetermined minimum and maximum amounts, also referred to as tax brackets. Each year is different and this may explain why there is a change in either the amount owing or the refund you’ll receive at the end of the year. It is important to note that each of the provinces and territories have their own tax brackets. Which can be found on the CRA website.
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How much federal tax do I have to pay based on my income?

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Here is an example based on the 2020 tax year of how Canada’s federal income tax bracket works. If your taxable income is less than the $48,535 threshold you pay 15% federal tax on all of it. For example, if your taxable income (after claiming your deductions and amounts) is $30,000, the CRA requires you to pay $4,500 in federal income tax (30,000 x 0.15).
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However, if your income is $200,000, you face several tax rates. This example shows how much “federal” tax you will pay on your 2020 taxable income. You will need to make a separate calculation for your provincial tax amount.
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● The first tax bracket – $0 to $48,535 is taxed at 15%, plus
● The next tax bracket – over $48,535 to $97,069 is taxed at 20.5%, plus
● The following tax bracket – over $97,069 to $150,473 is taxed at 26%, plus
● At this point, $150,473 of your income has been taxed. The final bracket on your remaining $49,527 is taxed at 29%.
● If you earn more than $214,368 in taxable income in 2020, the portion over $214,368 is taxed at the federal rate of 33%. This is called the “top tax bracket” and a common misconception is “if your taxable income is in this top bracket, you will be taxed at 33% on your entire income”.

Kundan Mulani, CPA
[email protected]
+1 782 234 6410

Is not filing your taxes on time a good idea?

The short answer is NO! There are consequences to not filing your taxes on time.
‍

Reasons why people don't file taxes on time:

• They don’t think that they will owe, so they don’t file
• They know they owe taxes and don’t have the funds to pay
• They incorrectly believe that if they do not file they will not be found out and will not have to pay
• They have lost records and/or receipts and have no idea or no record of what they earned, what their expenses were
• They find dealing with their late tax filing so stressful once it has occurred that they think if they avoid it, eventually it will go away by itself

Consequences of late filing of tax returns:

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• Late tax filing is a serious issue and should never be left unaddressed.
• The CRA charges significant penalties and interest charges.
• These charges continue to increase the longer you go without filing your returns, so if you owe a lot of money or if you have waited a very long time to file, the penalty for filing taxes late can be quite significant.
• If you do not file your taxes by the deadline, the CRA immediately charges a penalty on May 1st as well as compound daily interest charges on any unpaid taxes.
• If you have a balance owing and do not pay it, the CRA will also charge compound daily interest on any unpaid amount starting on the day after your return is due.
• Even if you do not owe money, you could still be hit financially if you do not file your taxes.
• The CRA will withhold your refund until you file and, even if you are not expecting a refund, there will likely be a delay in any government benefits you are expecting (such as GST/HST benefits or child benefits).
• The penalty for filing taxes late is 5% of the tax year’s balance owing plus 1% of the balance owing for each full month your return is late, up to a maximum of 12 months.
• Simply complete your taxes and send them in. If you owe tax or if you are charged a penalty by the CRA for late tax filing, you will be notified.
• The longer you wait, the more difficult your situation will become. Whether your late tax filing is 1 year, 5 years or even 10 years past due, it is important to act and get compliant immediately.
• In fact, you should still file your taxes even if you do not owe any money. Filing taxes late when you don’t owe Canada Revenue Agency any money is still a mistake.
• Many benefits (such as the Canada Child Benefit) will not be paid to you if you do not file. You could be missing out on benefits that you are entitled to receive if you do not file.
• If you’re behind filing your returns you should not simply go to a tax preparer and send in a batch of returns.
• Once you are behind, you will need to deal with professionals who have a high level of experience and who can negotiate with the CRA for you to become compliant.
• Late tax filing is a very serious tax problem that must be approached carefully. When filing past tax returns Canada Revenue Agency has a process that you should follow and programs that may make it easier to do so.
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‍Kundan Mulani, CPA
[email protected]
+1 782 234 6410

The T4A Tax Slip - What You Need To Know
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The T4A covers many of the pension, benefits and other income sources of an individual.
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Types of T4As

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There are four different types of T4As:
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● T4A (P)- Statement of Canada Pension Plan Benefits
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● T4A (OAS)- Statement of Old Age Security
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● T4A-RCA Statement of Distributions from a Retirement Compensation Arrangement
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● T4A- Statement of Pension, Retirement, Annuity and Other Income
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..And Here we go With More Boxes!

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Let us explain the reason as to why there are so many boxes. There are many different ways that people receive a form of income and other reasons for specific deductions. Because our T4A covers a range of scenarios people are in, it makes it easier to see what box pertains to someone's income situation. Here is a list of the most common T4A boxes:
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Box 16 – Pension or Superannuation

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If you received benefits because you paid into a company pension plan or superannuation fund, you will report this information in Box 16 of a T4A slip. You may qualify for the Pension Income Amount and Pension Income Splitting with Your Spouse
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Box 20 – Self Employed Commissions or Box 48 – Fees for Services

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If you receive a T4A with Box 20 or Box 48 amounts, you are considered self-employed for tax purposes as both of these boxes pertain to reporting self-employment income. If you’re a contractor or have earned income through commissions, this applies to you.
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If you have a T4A with Box 20 or 48 filled out, this means that you are to complete extra information when tax time comes. By being self-employed, you must complete the business form T2125- Statement of Business Activities This benefits you because you are then able to claim expenses to offset that income on that form
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Box 042 – RESP Educational Assistance Payments

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If you receive Educational Assistance Payments from a Registered Education Savings Plan (RESP) it will be shown in Box 042 and should be reported on Line 13000- Other Income of your tax return.
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Box 105 – Scholarships, bursaries, fellowships, artists’ project grants, and prizes

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If you were a full-time student, your scholarship/bursary income is exempt from tax in most cases in all provinces except Quebec. However, you must enter the T4A information on your tax return. Simply choose the option for Box 105 on your T4A income, which applies to full-time students to make sure you’re not paying taxes on this tax-exempt income.
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With part-time students, some or all of your T4A scholarship/bursary income may be exempt. For the most part, at least $500 will be exempted. Please note that it may still depend on how much scholarship/bursary and courses cost and the income you received.
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Box 107 – Payments from a Wage-Loss Replacement Plan

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You will receive a T4a if you’re been receiving benefits from a Wage Loss Replacement Plan , such as Short-Term Disability (STD), Long-Term Disability (LTD) or Weekly Indemnity (WI). These amounts will be reported Line 10400 of your tax return.
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Box 118 – Medical Premium Benefits:

If you received payments from your former employer for your Provincial or Government Medical Premiums, these amounts will be included as taxable “other employment income” on Line 10400 of your tax return. Note: These are not considered eligible medical expense deductions ‍
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Box 119 – Premiums Paid to a Group Term Life Insurance Plan:

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If you have group term life insurance plan Premiums that your former employer pays for, the amount paid will be included as taxable “other employment income” on Line 10400 of your tax return.
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Box 135 – Recipient-Paid Premiums for Private Health Services Plans:

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You will receive a T4A if your former employer pays for your Private Health Services Plans (PHSP or Extended Medical/Dental). The amount will be in Box 135. These amounts are eligible medical expense deductions that will be on Line 33099 of your tax return.
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Boxes 197 through 204 – Benefits related to COVID

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There will be new boxes on the T4 slip for benefits you may have received throughout the COVID-19 pandemic.
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● Box 197 – Canada Emergency Response Benefits (CERB)
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● Box 198 & 199 – Canada Emergency Student Benefit (CESB)
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● Box 200 – Provincial/Territorial COVID-19 financial assistance payments
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● Box 202 – Canada Recovery Benefit (CRB)
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● Box 203 – Canada Recover Sickness Benefit (CRSB)
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● Box 204 – Canada Recovery Caregiving Benefit (CRCB)
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If you are unsure if you are eligible for a T4A slip or just want to view a full list of income sources and box numbers, click on this link to learn more about it: T4A Statement of Pension, Retirement, Annuity and Other Income

KUNDAN MULANI, CPA
+1 782 234 6410
[email protected]

A new year is like a blank book; the pen is in your hands. It is your chance to write a beautiful story for yourself. Happy New Year!

What you Need to Know about the Home Buyers’ Plan

What you Need to Know about the Home Buyers’ Plan

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How does the Home Buyers’ Plan work?

Individuals who are interested in the Home Buyers’ Plan can withdraw up to $35,000 against their RRSP without paying any taxes. This will only apply to those who are approved for this program. Here are some things to consider:

You are deemed eligible if your funds have been in your RRSP account for at least 90 days

Individuals who want to withdraw their funds will have until October 1st of the year

All withdrawals are required to be made within one calendar year


Note: As long as individuals have repaid the amount of money that was withdrawn from their RRSP and has met all other eligibility requirements, they may be able to requalify to partake in the HBP again.
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Who is Eligible for the Home Buyers Plan?

Any Resident of Canada that is considered a first-time home buyer is eligible. Here is a quick summary of what you need to know about your eligibility:

Within a year of buying or building, the home is to be your principal residence

Applicants can build or buy a home for a relative with a disability or for themselves but will need a written agreement.

Individuals who are not first-time home buyers are eligible to build or buy a home for a relative with a disability

All types of home including apartments/condominiums, semi-detached, townhouses, single-family, units etc that are located in Canada are considered as qualified homes, with the exception of co-op housing as well.

How to apply to The Home Buyers’ Plan

You can apply for the Home Buyers’ Plan (HBP) by downloading and completing the T1036 form , which is a form requesting to withdraw funds from an RRSP. Please ensure that you fill out Part A of Area 1 in order to determine your eligibility to make the withdrawal from your RRSP under the HBP. Furthermore, give the form to your financial institution who will be responsible for filling out Area 2 and keep a copy of the completed form for your records.
If approved, your RRSP issuer will then deposit the necessary funds into an account of your choosing and provide you with a T4RSP slip. This is a confirmation slip indicating the amount withdrawn from your RRSP and will be used as a supporting document for your tax return for the next following year.

How to repay the Home Buyers’ Plan amount

It is mandatory for any individual who participates in this plan to repay the funds from their RRSP within 15 years back to their account before the yearly RRSP deadline. You can reduce your overall payments by paying back more than you owe however, this will not affect your annual RRSP deduction limits . Be mindful that you have 2 years to pay the first payment after your first withdrawal.
Statement details with information including the amount you’ve paid and the amount you owe will be sent to participants from the CRA.
For reference, here is a quick example of the minimum annual repayments and how it is calculated:
Participants that withdraw $35,000 from their RRSP, the minimum annual repayments would be $2,333 because you must divide the amount you owe with the length of time you must repay the funds (35,000/15)
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Can you cancel the Home Buyers’ Plan?

No, generally you cannot cancel the HBP; however, there are some exceptions as follows:

You or your disabled relative failed to buy or build a home by October 1st of the year following the date of your RRSP withdrawal

You became a non-resident of Canada prior to buying the home

Should you want to cancel the HBP, you are required to make a cancellation payment(s) to your existing RRSPs by December 31st, provide a letter of intent, and complete form RC471 Home Buyers’ Plan (HBP) Cancellation. Cancellation letters must be received by the CRA no later than 60 days from December 31st of the year following the year that you received the funds. If you are unable to include payment receipt(s) for the full amount withdrawn from your RRSP, the remainder will then be considered as taxable income.
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Pros and cons of the Home Buyers’ Plan

Pros

The HBP serves like an interest-free loan

The HBP grants access to money that could help you buy your first home

Cons

Yearly repayments

Forgo potential tax-sheltered investment/savings growth for a period of time

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Additional help

Some other national first-time home buying programs include:

The First-Time Home Buyer Incentive helps people across Canada with their down payment by offering a tax-free loan of 5% or 10% of the home’s purchase price

The GST/HST New Housing Rebate allows eligible homebuyers a rebate to recover some of the GST or the federal part of the HST paid on a newly built or renovated house.

The Home Buyers’ Tax Credit allows eligibility

Kundan Mulani,CPA

[email protected]

It’s important to check in with each other during these difficult times. If you have a loved one that needs help managing a CRA debt, let them know about our tools and services ➡️ http://ow.ly/nlsm50Hf1Qj

PERSONAL TAXES

What you need to know about Tuition Tax Credits



What you need to know about Tuition Tax Credits

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Everyone can agree that the cost of college or university tuition can make a significant dent to someone's wallet. Because of the huge cost associated with tuition, qualified students are able to claim through Tuition Tax credit.
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Are you Eligible for a Tuition Credit?

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Here is a list of who is eligible for this tax credit:
● Any student over the age of 16 that is enrolled in a Designated Educational Institution at a post-secondary level
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● Students that choose to continue their education after high school
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● A student who is partaking in full-times studies abroad that last for at least 3 weeks
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Here’s how you may not qualify for this specific tax credit:
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● If someone reimburses or pays for their tuition. For example, if a student’s employer offers to pay, this would not count as a tax credit, however, if their employer adds this to the student's income, it would
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● If a student takes high school equivalency courses to prepare for later post-secondary courses but attends university
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How to Calculate and Claim Tuition Tax Credits

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Let’s make one thing clear. Students may not be able to receive a refund but can either reduce or eliminate their tax bill especially if the tuition is more than the tax owed. Any unused credits can be transferred to a parent/grandparent or spouse/common-law or be carried over to a future tax year. To find out more information how to do so, click on this link
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Tuition Credit Documents

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T2202- Education & Textbook Amounts Certificates is a certificate that is issued to prove that a student has enrolled in an eligible courses throughout a proper time frame for the tuition tax credit.
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Disability Credits- To claim this specific tax credit, the student is required to be enrolled in a certified educational program and must submit a certified letter by a doctor stating the student’s physical or mental impairment. Students are to complete Schedule 11.
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Transferring Unused Credit Amounts

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You are able to transfer your unused tuition credits to your parents/grandparents and your Spouse/Common law partner. There is generally a $5,000 limit you can transfer of the tuition credits from the current year. To transfer you must sign and complete form T2202 and Schedule 11.
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You are able to carry forward any unused tuition credits that are not used in the current year.
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Generously, the CRA applies the available tuition amount carried forward every year in order to reduce your taxes to zero until it’s maxed out. The amounts of unused credit reduce tax payable automatically, so on behalf of our students, Thank you Canada!

We understand these are challenging times, and you may need to pay your balance in regular payments over a period of time. See if you can set up a payment arrangement by following these steps:

1️⃣ Calculate your monthly income and expenses

2️⃣ Determine how much you can afford to pay

3️⃣ Call us to set up your payment arrangement

4️⃣ Start your payment arrangement

For details: http://ow.ly/iVJK50H387e

Kundan Mulani, CPA updated their info in the about section.

Rough work week? If you find yourself daydreaming about retirement, make sure you’re in-the-know when it comes to your retirement savings.

Here’s how the CPP enhancement is helping you put more away: http://ow.ly/A0xM50GTIQv

Thinking about opening an RESP? The Canada Education Savings Grant can help you add up to $7,200 to your child’s RESP. Find out if you’re eligible: http://ow.ly/ueyu50GMuzW

Instead of waiting for a call from the CRA to confirm your new representative, you can now do it yourself by signing in to My Account or My Business Account!

Here’s how to get started: http://ow.ly/yXkH50GHhzo

Authorized representative can help you and your business for taxes.

Does someone help manage your tax info?
A representative is someone you authorize to help you or your business manage your tax information. They could be an accountant or lawyer, or a family member or friend. You can now quickly and easily add a new authorized representative using My Account and My Business Account.

Here’s how to get started: http://ow.ly/1lZx50Gypff

Some Important information on EI eligibility on non compliance of mandatory vaccination.

Employees who don’t comply with their employer’s mandatory vaccination policy would typically not be eligible to receive EI regular benefits.

https://bit.ly/3ujNMpA

Does your business still need Covid-19 support during reopening? The following benefits have been extended to October 23rd, 2021:

➡️ CEWS
➡️ CERS
➡️ Lockdown Support

For details: http://ow.ly/4p0g50Gonds

Kundan Mulani, CPA updated their phone number.

Kundan Mulani, CPA updated their business hours.