Saturday, May 22, 2010

Tax Rules For The Self-Employed

There are many of us that have decided to leave the 9 - 5 jobs, start a business and become our own bosses. There are deadlins and rules that we must follow and thanks to John Scholl, some of those questions are answered here in this article.

Self-employed? You are different when it comes to tax deadlines and rules. As a self-employed person, there are key differences in when and how you should pay your taxes – and knowing those differences can bring some significant tax savings. Here is what you need to know.

Tax deadlines

Most Canadians must file their personal tax return by April 30 -- yours is due on June 15.
- Tax owing on the personal tax return must be paid by the April 30 deadline. If the return is not filed by June 15, interest and penalties will apply.
- Generally, if you qualify as ‘self-employed’ for tax purposes, you are required to pay taxes in instalments based on your reported income in the previous taxation year. The Canada Revenue Agency (CRA) will send you a notice with the amounts you have to pay. Instalment payments for 2010 are due March 15, June 15, September 15, and December 15. If you don’t pay by the due dates, you may face instalment interest and penalties. You can pay by selecting one of three methods:
1. The schedule set out in the instalment payment notice you will receive from the
Canada Revenue Agency (CRA).
2. Last year’s tax payable.
3. The estimated tax payable for the current year.

Tax tips

You may qualify for these deductions:
- Home office – if you use your home office as your principal place of business, you may be able to claim a portion of your housing costs including rent (if you are a tenant),mortgage interest, property taxes, utilities and home insurance.
- Capital assets – the furniture and equipment acquired for your business can be written off gradually by claiming the capital cost allowance (CCA) each year.
- Business expenses – claim reasonable expenses related to earning your income.
- Goods and Services Tax/Harmonized Sales Tax – if you charge these taxes to your clients/customers and remit them to the Canada Revenue Agency, you’re entitled to
GST/HST refund on business purchases.
- Health and/or Dental Insurance Premiums – these may be deductible for you and your family and deducting them as a business expense usually delivers a better tax benefit
than claiming them as a medical expense. The reimbursement of medical and dental expenses would still be received tax-free!

New: Employment Insurance (EI) benefits

- Beginning in January 2011, self-employed Canadians have the option to access EI benefits in four categories – maternity, parental, sickness and compassionate care
benefits. Twelve months of EI premiums must be made in order to qualify for any benefits but for the first year, if contributions start by April 2010, payments can start January 2011. Remember once in the program, premiums are required for life. The choice to participate in the EI program depends on your personal circumstances.

There are many other tax savings strategies available to self-employed persons. Your professional advisor can help you identify the ones that will work best for you – and make sure you save on interest and penalties by hitting all your tax deadlines.

John Scholl CLU,CGA, B. Mathematics,
Consultant - Investors Group Financial Services Inc.
& Investors Group Insurances Services Inc.
200 - 24 Queen Street East,
Brampton, Ontario L6V 1A3
Wealth Management & Financial Planning
Phone: (905) 450-2891 X529
Toll Free: 1 (866) 799-2223 x529
Cell (416) 731-3660
Fax: (905) 450-9747

I strive to continually improve my wealth management practice to be worthy of the referrals received. I build my business one introduction at a time, and would consider it a great compliment to be introduced to one of your business associates, friends or family.

Thank you, John, for providing this information to customers who may be interested in the purchase of a home and need some professional advice about their investment and finances.

Betty Bartusevicius, Sales Representative
Re/Max Realty Specialists Inc., Brokerage
Homes In The Nine Oh Five

Wednesday, May 5, 2010

Market Watch, Oakville Real Estate

More and more news about the housing market. Here is the most up-to-date Market Watch information. What's going on? Well, homes are selling, there's not enough inventory, buyers are looking for deals, and the list goes on. Multiple offers are still happening but not at the same pace.

I am still having trouble finding new listings. With the numbers that the Market Watch is showing, I often wonder why my buyers are waiting. Yes, interest have risen (they always do this time of year) but if you are well prepared and have spoken to your mortgage advisor, then you should be ready. You don't have to jump at the first home that you see, but there is a home out there for every single buyer.

Here's a bit of information from the Market Watch:

“The GTA resale market is functioning properly. Sales were high as buyers continued to take advantage of affordable home ownership opportunities. Listings grew as home owners reacted to strong sales and price growth,” said Toronto Real Estate Board President Tom Lebour. “More balanced market conditions will result in sustainable rates of annual price growth in the second half of 2010.”

The average price for April transactions was $437,600 – up 13 per cent compared to the average of $385,641 recorded in April 2009.

“Home sales continue to be driven by many different segments of the market, with sales growth for all major home types in both the City of Toronto and surrounding 905 regions,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “Home sales will remain strong in the second half of 2010, but will slip from the current record pace as borrowing costs rise.”

I have been very fortunate to have received a New Land Transfer Tax Calculator. It helps with some of the closing costs, also. Thank you to Stan Gelman, QC, Juris Doctor. A hands on lawyer that is available for your questions.

If you would like to discuss the new Market Watch, or just chat and open a line of communication, call me, Betty Bartusevicius, at 416 427 1875. Also,take advantage of my user friendly website offering more than just a lot of properties for sale. I provide a wealth of informative articles and information useful to all levels in real estate - from the first-time home buyer/seller to the seasoned sellers/purchasers.

Betty Bartusevicius, Sales Representative
Re/Max Reatly Specialists Inc., Brokerage
905 828 3434
Fine Homes In Nine Oh Five