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WoodmanWhiteOlsenandCo

Attendant Care and the Disability Tax Credit

There are very specific rules when it comes to claiming Attendant Care as a medical expense while also claiming the Disability Tax Credit.  If you have a loved one who is being cared for at a school, institution or other place such as a detoxification clinic, and is also eligible for the Disability Tax Credit the tax payer may be able to claim both the costs of Attendant Care and the Disability Tax Credit.  Certain certification is required.  Form T2201 (Disability Tax Credit Certificate) must be on file with the Canada Revenue Agency and appropriately qualified person must certify in writing that because of a mental or physical impairment, you need the equipment, facilities or personnel specially provided by that place for persons with the same type of impairments.  Note an appropriately qualified person includes a medical practitioner and can also include the principal of the school or head of the institution or other place. 

Don’t hesitate to give us a call or book an appointment if you have any questions!

Federal Budget 2016

Prime Minister Trudeau and the Liberal Party have promised real change.  These plans will be laid out in the 2016 Federal Budget which has been confirmed to be tabled March 22, 2016.

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Medical Expense Claims

To Our Clients:

We are writing to provide you with information about the documentation that is now being required by Canada Revenue Agency to support your claims for medical expenses due to changes in their Administrative policies.

This may result in both you and we having to spend additional time and effort related to your claim, specifically at the time of filing, or if the documentation is not on hand then, if and when your claim is reviewed.

Documentation required to support medical expenses:

  1. Medical service costs must be supported by receipts for the service and proof of payment.
  2.  If a portion of the medical expenses was covered under an insurance plan, you may claim both the amount not reimbursed as a deductible portion plus the costs of the insurance. The cost of the insurance must be supported by receipts unless the plan is an employer based plan where the employer has recorded the eligible portion of the expense in Box 85 of your T4 Slip.
  3.  Claims for costs of plans such as Alberta Blue Cross require a payment confirmation available from ABC. Please note that no provincial health care premiums are deductible.
  4.  Costs of medical services provide purely for cosmetic purposes may not be considered to be an eligible medical expense.
  5.  Please note that items, whether prescribed or not, that are not a drug requiring a prescription in order to obtain them, such as vitamins, holistic supplements etc. are not deductible.
  6.  Should you acquire the report from your Pharmacist detailing the prescriptions that are filled:
    1. The report must show the details including the DIN of each item, and
    2.  If the report includes non-prescription vitamins or supplements, they must be identified because they cannot be claimed. Please assist us by identifying these non-deductible items
  7. Where costs of attendant care are paid there are very specific rules related to claiming either or both those costs and the Disability Tax Credit. Should you possibly be in this situation, you will need to discuss this matter with us.

Supporting costs of medical travel:

  1. If you are required to travel in order to receive medical attention you must be able to support that:
    1. The particular medical service is not available in the city or town in which you reside
    2.  If the services are available in your city or town, the letter must state the additional reason(s) that the particular medical centre to which you travelled had to be used. They are requiring that this be so because of some significant difference, such as:
      1. This is the closest medical centre in which the service is available
      2. Due to a waiting list situation, you were able to receive the service in a significantly reduced time
      3. The cost of the service at the particular location was significantly less than it would be at a medical centre closer to your residence
  2.  You must provide proof of attendance at the particular appointments provided by the medical centre, the physician’s or other medical practitioner’s office, the hospital or other facility, such as a client ledger prepared and printed on stationery to identify the facility
  3. You must provide proof of the distance travelled. Mileage can be claimed where the distance to obtain the service is greater than 40 km. Other travel expenses can be claimed where the distance to obtain the medical service is greater than 80 km.
    1. Claims for mileage and meals may be calculated using the simplified method, or
    2.  They may be based on the actual cost method. Note that the detailed method requires that vehicle costs for the entire year be detailed and prorated between medical travel and total mileage for the year
  4. If you were required to stay in accommodation in order to receive the medical service, you must have receipts for the accommodation cost
  5. Parking costs must be supported by receipts
  6. If you must be accompanied by someone in travelling to acquire the medical service, this must be stipulated in the letter. Note that where the patient is a child, they will not accept that both parents had to accompany the child

Should you need further information, we would be pleased to provide you with Canada Revenue Agency’s Income Tax Folio S1-F1-C1, Medical Expense Tax Credit, a 30 page document detailing the medical expense tax credit.

T4’s and T4A’s

It’s our favorite time of year, tax time! We would like to remind both employers and employees that all T4’s and T4A’s must be issued by this upcoming Monday, February 29th. The filing deadline is April 30th. If you have any questions, we would be happy to help! Give us a call at 403-327-3101.

Ringing in 2016 with new rates of tax

Happy New Year’s from all of us at Woodman White Olsen & Co., LLP.

There have been some fairly significant changes in the rates of tax over the past six months, starting with the Alberta announcement of tax increases of 2% on corporate income over the $500,000 small business limit or on corporate income that is not eligible for the small business deduction such as property income. As well there has been an increase in personal rates of anywhere between 0% and 5% based on the amount of taxable income. While these increases were applied at ½ the announced change for 2015 income, they come fully into force tomorrow morning (2016).

And then in December, the new federal government announced its changes which also take effect after midnight.

While those with personal taxable income between $45,282 and $90,563 will see a reduction of 1.5% on their income above $45,282, those with income above $200,000 will see a 4% increase in the amount of tax on their taxable income above $200,000.

We need to remember that the rate changes both federally and provincially apply to just that portion of the income in the particular income bracket as everyone still gets the benefit of the lower tax rates on the portion of their income within those lower ranges.

Corporations with investment income will see a large change in the tax rates applied to the investment income – 4% – however, if this is flowed out to the shareholders as dividends, the process involved in the Refundable Dividend Tax on Hand method will eliminate that increase – corporately. However, the personal rates applied to dividend income have increased, particularly in Alberta and where the taxable income is entering the top marginal rates.

It will be much more important to ensure that planning of the method in which the income is received takes place as we move through the next several years if you are a business owner.

We also expect that our clients will experience some surprises as we prepare the 2015 personal income tax returns. This surprise is due to the change in the method of getting personal credits for children for the 2015 and subsequent tax years.

Those people who have children under the age of 18 and who are employees – and who completed the new TD1 form for their employers, will have seen that the federal tax deduction from their paycheque increased by $28 every month and won’t be surprised when signing their tax return.

However, self-employed people with children are going to see an increase in the federal taxes payable for 2015 of $338 per child.

This isn’t actually an decrease of net family cash flow as, during 2015 the federal government had increased the Child Tax Benefits received by eligible families to compensate for removing the federal tax credit for children, but where tax isn’t deducted from your income, the taxes payable at the end of April 2016 will be larger because of this.

Please remember too, that the amount that can be deposited to your Tax Free Savings Account has reverted to $5,500 for any amounts deposited after December 31, 2015.

Please don’t hesitate to contact us at the office at 403-327-3101 for assistance with your tax planning needs – we would be happy to help!

 

2016 Tax Rates

2015 was a significant year for the political landscape of Alberta and Canada as a whole with election wins by the NDP party of Alberta and the Liberal Party of Canada respectively.  Part of the platforms of both governing parties was a promise to increase taxation on higher income earners.  With announced changes to the federal income tax brackets announced October 1, 2015  and the budget announcement in Alberta on October 27, 2015 below is a chart showing the taxation of income in Alberta for 2016.

2016 tax bracket

Below is a basic illustration of how this change will impact taxpayers (single individual, no dependents):

2016 tax impact 2

Please don’t hesitate to contact the team at Woodman White Olsen & Co., LLP for all your tax planning and tax filing needs.

Toll-Free Telephone Number

Did you know that Woodman White Olsen & Co. has a toll-free telephone number? If you are regularly calling us from outside of the Lethbridge area, please make note of this number! Our toll-free number is 800-856-4962

 

Toll-free

Alberta’s minimum wage increase October 1

As of October 1st, 2015, Alberta’s general minimum wage has increased from $10.20 to $11.20 per hour. The liquor server minimum wage has increased from $9.20 to $10.70 per hour, and will be eliminated next year. These increases are the first step towards a single $15 per hour minimum wage. Weekly and monthly minimum wages are increasing as well.

Employers and employees with questions about minimum wages can contact the Employment Standards Contact Centre at 780-427-3731, or toll free at 1-877-427-3731 or visit work.alberta.ca/es.

Via Jobs, Skills, Training and Labour.

 

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Whoop Up Days

Today, our team dressed up in their wildest western attire – how is your Whoop Up Days going?

 

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