tax time for midwives · 2020-03-03 · the following presentation was prepared for general...
TRANSCRIPT
TAX TIME FOR MIDWIVES February 2018
Presented by:
Susan Morrison CPA,CA
MORRISON CPA Professional Corporation
2
The following presentation was prepared for general informational or
educational purposes only. It does not constitute specific advice regarding your
personal financial or investment situation or provide specific individual advice
about investment, insurance, financial, legal, accounting, tax or similar matters.
Any opinions expressed are solely those of the presenter and not necessarily
those of the AOM Benefits Trust. Where quoted, past performance is not
indicative of future performance. The AOM Benefits Trust disclaims and gives
no guarantees, undertakings, warranties nor makes any representation as to the
accuracy, suitability, or reliability of the information provided by it or third
parties. The AOM Benefits Trust assumes no liability arising in connection with
the use of or reliance on the information by any person. The information
provided and this disclaimer is subject to change without notice, and any use or
reliance on it is at your own risk.
Disclaimer
Provide an overview of the Canadian tax system, including changes coming up in 2018
Support your personal 2017 tax preparations by providing information relevant specifically for self-employed midwives in Ontario, including expenses, credits and deductions
Highlight the information and documents you will need – and where to find them
Objectives:
Canadian Tax
Personal:
Taxed on worldwide income of individuals who are residents in Canada regardless of citizenship
According to Income Tax Act: graduated rates
Administered by Canada Revenue Agency (CRA)
Based on self-assessment: voluntary disclosure
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Forms to Use
Every self-employed MW uses:
T2032 or T2125
Small Practice: uses T2125
Larger Practice: uses Partnership Return and
issues T5013 slip
If Incorporated: use T2
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Deadlines
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Self-employed and spouse/common-law partner = June 15th
HOWEVER:
Consider interest begins Apr 30th
Installments Mar/June/Sept/Dec
Partnership: Mar 31st
Corporation: 6 months after year end
T4s: Feb 28th
Tax Return Calculation
A Income (T4, T5, T2032, rental)
B Deductions (RRSPs, Childcare)
C Taxable Income
D Credits (med, tuition, spouse)
E Tax payable
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A - B = C
C D
x xTax Rate 40% 20%
C1 - D1 = E
Personal Tax Brackets 2017
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50%
40%
30%
20%
10%
46%
%
$ 20 K 40 K 60 K
53%
203K
$202,800
Ontario
80 K 100 K 120 K 140 K
$91,831
$45,916
$11,635
20%
30%
150K
$142,353
43%
Income Considerations
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Courses of care, back-ups, experience
fees, preceptor fees, interpractice care
fees
MPG : allocation of Caseload Variables
Include your 20% Benefits Funding
Travel compensation: claiming Auto
expenses as deductions
New equipment funding
Services for physician clients
Expenses: Auto
Logbooks (consider MileIQ app,
or MileBug, aCar or Trip Miles)
Fuel
Insurance
Repairs and maintenance
Loan interest and UCC
or Lease
Parking / 407
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Expenses: Workplace in Home
Home must be either
1) PRIMARY place of business OR
2) Space used regular and ongoing to
MEET clients
Recent Court Case: Layton
– denied for no evidence
of meetings IN the home
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Expenses: CCA/ CapitalCapital – items of enduring value written off over time (items >$500)
PROBLEM – funding income
means profits but expense
stretched over many periods
NOTE: Funding no longer
considered ‘grant’
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Prepaids(courses, gift cards)
Accruals
(phone bills,
accounting)
Partner loans and
equity expense
Expenses: Other
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Audit Considerations
Look for logbooks
Desk review audit
Random vs. red flagging
6 years from date of
assessment (digital access)
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Deductions
RRSPs maximums, carry-forward,
deadlines, savings?
Childcare receipts $ 8K(under 7)
(lowest income spouse) $ 5K (age 7-16)
$11K (disabled)
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Moving
Spousal support
Tax Credits
Spouse or equivalent
Tuition (textbook credit gone)
NEW Canada caregiver credit (infirm)
Donations – split strategy
Medical – NEW - costs for
reproductive technologies
10 years retroactive
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Documents from the AOMBT• T4As (if parental leave payments in 2017)
• GRSP receipts for 2017 contribution: provided by
Desjardins Financial, mailed or on Desjardins website
(dfs.ca/participant)
• 2017 Member Information Report package: Mailed in
March, includes:
- T3 (leave savings interest income)
- Health and dental premium receipt (if applicable)
- Supplementary fee receipt (issued by AOM; of the 10%
service fee charged by the AOMBT, 2.7% is utilized for
activities that qualify as policy development work, which are
called Supplementary Fees. For income tax purposes, these
fees are treated as professional dues).
www.morrisoncpa.ca
Tax Changes
MUST report all real estate sales – including principal residences NEW – form T2091
Teachers keep receipts for school
supplies – began in 2016 $1,000
TFSA $5,500
Family tax cut/ arts/ fitness – gone
Public transit passes – gone except for seniors
Diabetes – T2201 (if > 14 hrs/week needed)
Healthy homes renovation credit
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Other Changes Canada Child Benefit (replaces CTB, UCCB) –
income sensitive $30 - $155, non taxable
EI amended – parental benefits can be spread over 18 months / start 12 weeks early
CPP changes 2019 - 2025 $150/year
Vol disclosure tightening
CRA fraud – no etrans/
gift cards ever used
US citizens – IRS changes
Bitcoins
Points programs
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Corporate Structure
Contracts
Individual
Partnership
Corporation
Ownership
NEW in 2016: Section 55: insists on all corporations sharing the SBD ($500K) for low corporate tax rates
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Practice
Big Picture/ Bottom LineBEWARE:
Advice provided by CRA employees may be overturned – with no recourse.
For a comprehensive list of
deductions and credits, please
email us for our annual checklist.
www.morrisoncpa.ca
