FAQs
Ontario Trillium Benefit
Many people have questions about the OTB (Ontario Trillium Benefit) mainly due to the fact that it is a more recent benefit that combines several credits into one. At Catherine Barrie Accounting, we’re here to help answer all of your questions and concerns to help understand the ins and outs of tax regulations.
When you have your taxes done at Catherine Barrie Accounting we will ask you for the necessary documents needed to make sure you can take advantage of every credit you are entitled to. The form used to file this information is called the ON-BEN Application Form and can be obtained from the CRA.
This credit was implemented to help Ontarians with the sales tax that they pay throughout the year.
You may be eligible if:
- You are 19 years old and up
- You are or have been married or in a common-law relationship
- You are a parent who lived or is living with your child
This credit may get you up to $602. To know where you stand on this credit try using the Ontario Tax Credit Calculator.
This credit is a tax-free payment meant to help with your property and sales tax on energy costs in Ontario.
You may qualify if:
- You are 18 years old or above
- You are or were married or in a common-law relationship
- You are a parent who lives or lived with your child
- You rented or paid property tax on your residence
- You lived on a reserve and were responsible for paying home energy costs
- You lived in a public long-term care home and paid an amount for your accommodation
This credit could pay anywhere between $25 and $1187 depending on your situation so in order to be sure what you may be entitled to, we recommend using the Ontario Tax Credit Calculator.
This credit is meant to help manage the higher costs of home energy that Canadians living in Northern Ontario face.
You may receive this credit if:
- Your main residence is in Northern Ontario
- You are 18 years old or older
- You have or had a spouse or common-law partner
- You are a parent who lives or did live with your child
- You rented or paid property tax for your home
- You lived on a reserve and paid home energy costs
- You lived in a public long-term care home and paid part of your fees
If you are single you could receive up to $151 and families could receive up to $232 Try the Ontario Tax Credit Calculator to get a better idea where you stand.
As long as you have filed your taxes, and qualify for the benefit, you can expect to receive your OTB monthly starting in July. If the amount of the benefit is less than $2 you will not receive a payment.
There are many factors that go into how much you will receive for the OTB. Factors that will affect how much money you will get from the government include your:
- Age
- Income
- Residence
- Family size
- Costs of rent or property tax
If you would like to get an idea of how much you money you will receive from the Ontario Trillium Benefit we suggest using the Ontario Tax Credit Calculator.
The OTB combines three credits and was implemented to help pay for energy costs as well as sales and property tax. The 3 credits that have been included in the OTB are:
- The Northern Ontario Energy Credit
- The Ontario Energy and Property Tax Credit
- Ontario Sales Tax Credit
In order to receive the OTB you must be able to receive one of these three credits.
The GST / HST Credit
At Catherine Barrie Accounting we want to keep you informed about every aspect of your taxes. Whether you have questions about the GST/HST credit you receive, or your curious about how you can get the GST/HST credit in the future we have the answers you’re looking for. The most common questions we receive are:
The credit is paid quarterly (4 times a year) and will be paid after you have filed your taxes. The government will send out payments on:
July 5th
October 5th
January 5th
April 5th
If your credit is less than $50 per quarter, the CRA will pay you a lump some of the full amount on July 5th. If you feel like the Government has missed a payment you can always call 1-800-387-1193 to inquire.
The age you can receive the credit is generally 19; however, if you are going to turn 19 before April of the year following you last tax return then you may be entitled to it. The CRA will automatically decide if you can get the credit as long as you filed your taxes.
Your child will not receive payments but you may be entitled to a larger credit. In order for you to receive payments for your son or daughter there are several conditions that must be If your child meets ALL of these conditions you may be entitles to a GST/HST payment.
- Is dependent on you for support
- Is under 19 years old
- Has never had a spouse or common-law partner
- Has never been a parent of a child they lived with
- Lives with you
If all of these conditions are met the credit for your child will be included in your credit. In a shared custody situation each parent may get half of the GST/HST credit for the child.
If you haven’t filed your taxes in a few years you may have missed out on some GST/HST payments that you were entitled to. Luckily you may be able to get those payments back. You have up to 3 years to ask for old payments you may have missed.
As long as you file your taxes the CRA will determine the amount that you can get for the GST/HST credit. There are several factors that go into how they determine this amount; however, if you are curious about how much you will receive, we suggest using the CRA’s online calculator.
To get the GST/HST Credit you have to file a tax return for the most recent year, even if you haven’t had a job or gotten any income for the year.
For new residents to Canada you must fill out the RC151 Form. At Catherine Barrie Accounting we understand how confusing the tax process can be for new residents to Canada and are happy to answer any questions or concerns you may have.
If you have suffered a loss in your family, the GST/HST credit for deceased individuals ends the quarter following the date of death.
In order to get the GST/HST credit you must be considered a resident of Canada for income tax purposes in the month before and the month that the payments are made. You must also meet at least one of the following criteria:
- Be at least 19 years old
- Have or had a spouse or common-law partner
- You are or were a parent and live or lived with your child
The GST/HST credit, otherwise known as the Goods and Services/Harmonized Sales Tax credit, is a credit that is intended to help people with low and modest income. This credit is meant to help lessen all or part of the GST/HST that people pay and will not be included in your income at tax season.
Tax Refunds
Getting a refund on your taxes is always great news. Whether you plan to buy that new T.V. you`ve had your eye on or plan to put that refund to work for you through savings, you want your money as fast as possible. Many people have questions when it comes to their refund and at Catherine Barrie Accounting we want to make sure you have all the information about your refund you need to make the right decision for you.
We at Catherine Barrie Accounting know how important your money is to you. Although we strive to complete your return in a timely manner there are occasionally delays within the CRA that prolong the time it takes for you to receive your return. We understand this can be frustrating, and will do what we can do make this process as fast as possible; however, the time frame for processing is in the hands of the CRA.
Choosing to receive your return by mail is the slower of the two payment options. After we file your return, the CRA processes it which usually takes 5-10 business days. Once your return is processed the CRA then mails out your cheque to you. Depending on Canada Post and the CRA this method can take anywhere from 2-3 weeks.
If you have provided us with either your direct deposit information from the bank or a void cheque, we have the ability to update your information with the CRA when we file your taxes. By opting for direct deposit you may receive your refund directly into your bank account. This is usually the fastest method to receive your refund and you can expect to see your return within 5-10 business days after filing.
At Catherine Barrie Accounting we strive to complete your tax return as quickly as possible for you so you can get a better understanding of where you stand come tax time. If you are expecting a return the times vary on when you get your refund from the government, depending on the CRA and how long it takes them to process your return. Here we have outlined different scenarios and generally how long it should be before you see your refund.
Tax Installments
Many people have questions when having to pay personal tax installments. At Catherine Barrie Accounting we strive to give you all the information you need to make the process of paying your tax installments as easy as possible.
Paying in installments is something many people are unfamiliar with, but fortunately we have the answers you need to comply with the CRA and your installment payments.
If you happen to miss an installment payment it’s not the end of the world; however, you may unfortunately have to pay interest on the amount that you owe up until the time of payment. If the amount owing is larger there may be some penalties charged as well.
Your personal income tax installments are due quarterly throughout the year, which means there are 4 payments that you need to make in one year. The dates they are due are
March 15
June 15
September 15
December 15
The government is more than happy to take your money so you can make payments anytime you wish; however the amounts due on the mentioned dates should be paid before the due dates.
If the CRA requires you to pay in installments you will receive a letter in the mail detailing the amounts that you should pay and the dates on which you pay them. There are several ways you can pay.
- Pay at the bank. When you receive your letter in the mail detailing your installment payments, the CRA may send you remittance vouchers with your letter. If you receive vouchers, simply follow the instructions on which information you need to fill out and once completed take them to your bank where they will be able to process your payment. Without the voucher however the bank will be unable to process your payment through their branch.
- Pay Online. If you do not receive vouchers with your letter from the CRA you can set up payments through electronic banking by adding CRA Installments as a payee and then use your S.I.N. number as your account number for the CRA.
Pay by mail. Simple write a cheque payable to The Receiver General and mail it to the CRA. If you choose this option be sure to write a letter to accompany the cheque detailing your account info (your S.I.N.) and the year or years in which to apply the payment.
In Ontario if you owe more than $3000 in taxes for 2 out of the past 3 years, you will have to pay the CRA installment payments. Once the government knows that you owe more than $3000 for 2 out of 3 of the past years, you will receive a letter in the mail that details the suggested payments and dates for payments.
The CRA assumes that your income will not change much and if you owed more than $3000 it is likely that you will owe that same amount again. The CRA thinks that you should know how much in taxes you’re going to pay and therefor make these installment payments on your own.
Over the course of a year, many people have taxes deducted by their employer from their paycheques or other sources of income. Your employers are responsible for paying or “remitting” the deducted income from your paycheck on your behalf to the CRA.
If you do not have enough taxes remitted throughout the year, the government expects you to remit the taxes yourself. These remittances are basically “prepaying” the taxes you will owe next April.
Taxes Owing
Your tax refund or balance owing is the amount of tax you must pay minus the amount that you have paid or “remitted” during the year, if you do not have enough income taxes deducted by your employer “at source”, it could result in you owing income tax. At Catherine Barrie Accounting we want to make sure you have all the information you need to help you avoid any extra payments come tax season. Here are some common questions and answers that should help you avoid a payment at tax time.
What rate a person should be paying on their tax’s differs from person to person and depends on your taxable income minus your deductible expenses such as medical. Luckily at Catherine Barrie Accounting we have a quick and simple to use calculator that can help you to see approximately what tax rate you should be applying to your different forms of income.
***BE ADVISED THIS IS ONLY AN ESTIMATE. RATES WILL DIFFER ON AN INDIVIDUAL BASIS***
Income that doesn`t have taxes deducted such as: sale of shares or property, interest earned, dividends received, and others can leave you with a balance owing when you have your taxes completed. If you would like to avoid this you can ask your employer or pension to deduct more than the appropriate amount of tax from your cheques to lower your balance owing from these forms of income at the end of the year.
Anyone who cashes in RRSP’s generally owes taxes. The RRSP’s are included in your taxable income. If you take out $5,000 or less, only 10% will be withheld for taxes. For amounts between $5,000 and $15,000, 20% will be withheld. Any amount over $15,000, 30% will be withheld. When the RRSP’s are taxed at these rates they are not taking into account your other income for the year.
Some people think they are beating the system by taking out $15,000 in three $5,000 chunks, with the result being that only $1,500 taxes are withheld (Our lowest marginal tax rate is 22%). They have to pay the difference upon filing their taxes, generally making them owe thousands in tax. At Catherine Barrie Accounting we want to make sure your taxes are reasonable and manageable for your income.
People are often surprised with the amount of taxes they owe from RRSP’s because many believe they have paid the tax on them when they cashed in their RRSP`s. The taxes withheld are rarely enough and if not managed correctly can lead to a large balance owing.
Often, people who have collected Employment Insurance during the year end up owing taxes because not enough tax is held back. Be sure to contact E.I. and make sure that they are using the appropriate rate based on your estimate of your total income for the year.
Some people receive income from many different sources once they retire. These sources can include CPP, OAS and other pensions. These pensions are usually in the dark about any other income you may have coming in, and as such, they do not take that income into account when deducting tax. If you have a general idea of how much total income you receive, contact CPP, OAS, and your pension to be sure they are deducting the appropriate amount of tax to avoid payments when you have your taxes prepared.
If you are working several part-time jobs at the same time, it is best to let your employer know otherwise you may owe some money when you file your taxes. Unless the employer knows about your other job and takes it into account, they will not hold enough taxes back. Everyone has a basic personal amount of income they can make tax-free for the year. If you have several employers at the same time, they may all be giving you credit for the basic personal amount and not deducting enough income taxes from your pay cheque. If you have any subcontract/self-employment earnings, where nobody is deducting and remitting income taxes on your behalf, you will owe the full amount of taxes on that income when you file.
Taxes Under Review
At Catherine Barrie Accounting we strive to complete your taxes correctly and in a timely manner, saving you time and money; however occasionally the CRA will send you a letter saying your some information in your taxes are under review. Here we’ve outlined some questions and answers to the most frequently asked questions from our clients to help you have an understanding of the CRA’s processes.
When you receive a letter saying your tax items are under review, you will be provided with a Case Number on the letter. Make sure you keep it, it is very important. At Catherine Barrie Accounting we would be happy to handle this process for you; however, if you choose to do it yourself these are the steps you should take.
- Collect the receipts or documents requested by the CRA
- Photo copy or scan the documents
- Write the case number and your SIN number on all the copies of the documents
- If your sending by mail, send to the address indicated on the letter that was sent to you (usually located on the last page)
- If submitting online log-in to MyAccount on the CRA Website (check out our instructions on how to register for MyAccount)
- Look for the Tab that says Submit Documents
- Input your Case Number
- Add a description to the files your uploading eg. Medical Receipts Jan-Dec
- Upload your documents
- Print off and keep your submission confirmation for your records
When you have your taxes done at Catherine Barrie Accounting our policy is to scan any information you provide us with for your taxes, so if you were to misplace something we have a record of it for you. If you have lost some or all of the information requested from the CRA, your taxes would be adjusted leading to a lower refund or higher balance owing.
When you receive a letter from the CRA stating that an item is under review, they will provide you with the expenses in question as well as the line number on which they appear on your taxes eg. Medical Expenses Line 330 and 332. If this occurs you must simply send in the receipts or invoices for the items in question.
Do not panic, you are not being audited. When information in your taxes is questioned by the CRA, they simply want proof that the information you provided is truthful and complete. So remember do not panic, you are not being audited.
There can be many factors as to why the CRA has decided to question items in your tax return. For many items it is usually because you are claiming more than average or more than you have in the past. It may also be a random check performed by the CRA. Whatever the reason may be these reviews are preformed within the CRA and you will have to provide the information that they request before your taxes are considered completed.
Tax Savings
There comes a point in every person’s life where they wonder if they are ready for their future. As the years roll on there is guaranteed to be one certainty, things will become more expensive. At Catherine Barrie Accounting, we want you to have the proper information and tools at your disposal so that you can make the right decisions for your financial future. Like most things in life that are worthwhile, you will need to invest your time and money in order to safeguard you and your family’s financial wellbeing. Here we have outlined some answers to some basic questions to get you on the right path to future financial stability.
Mutual funds simplify diversification in investments by doing all the work of diversifying for you. When you invest in a mutual fund, your money is pooled with other investors in a fund. The fund is then managed by investing in several different options to hopefully maximize your investment. The downside of mutual funds is that there are usually many different fees and charges involved which lessens your return on investment.
A bond put simply is a loan that you are providing to a specific borrower (usually the government). If a corporation or government needs to raise funds they will issue bonds. You would pay a certain amount of money that the government or corporation agrees to pay back with interest on a specific date. These are considered to be relatively safe investments and therefor obtain less interest back than other investing options.
Investing in stocks is considered to be a high risk investment generally because there is little to no guarantee you will receive your investment back. Investing in stocks is an investment in shares of a corporation, if the corporation does well the stock price will increase and therefor so will your investment. Since there are many different forms of company stocks and ways to earn money, these investments are complicated and if you choose to explore this option we highly recommend talking to your accountant and financial advisor before proceeding.
A Guaranteed Investment Certificate is straight forward when compared to other investments. You would obtain a GIC from a bank or similar establishment for a specific amount of money, and that investment is guaranteed to earn a certain amount of interest over time. There are a few different options in GIC’s with specialized ways of earning interest so before purchasing a GIC it is best to shop around for the best fit for you.
A Registered Retirement Saving’s Plan is an investment that allows you to save money, gain a little interest, and lower your taxable income for the year. The interest gained from an RRSP is generally very small, so if you are expecting a big return you may want to think of other options. One of the main benefits to this plan is that sometimes they can be matched by your employer potentially doubling your savings. Another benefit is that if your income was slightly higher than previous years, investing in RRSP’s could help to lower your taxable income. A negative of RRSP’s is that they are taxable when you cash them in, meaning that you could push yourself into a higher tax bracket or they may not be taxed enough causing you to owe at tax time.
A TFSA is an account that you can obtain with almost any bank that allows you to store your savings tax free. Although adding money to this account is not tax deductible, it is usually tax exempt on withdrawal. A TFSA is a great place to store your savings until you can gain enough to invest in something that can provide you with a greater return. Remember that unlike other investments you will not be taxed on the income you receive from the amount of money you take out or the interest that was earned in the account.
There are several ways to save at your disposal and although you can choose to take only one path, it is usually in your best interest to diversify (use several options) to maximise your savings. The most common forms of saving are:
- Tax Free Savings Accounts (TFSA’s)
- Registered Retirement Savings Plans (RRSP’s)
- Guaranteed Investment Certificates (GIC’s)
- Stocks
- Bonds
- Mutual Funds
When it comes to saving your money there are many options available to you. You can choose to simply hold onto the money you have, invest in low risk opportunities, invest in high risk opportunities, or simply shove your money under the mattress and hope for the best (we highly recommend not taking this option). What will work best for your lifestyle and income will be as unique as you are, which is why it is always best to consult an accountant and financial manager before making any firm decisions.
Medical Expenses
At Catherine Barrie Accounting we receive many questions about medical expenses. We understand that this is an area of your tax return that is a mystery to many people. Although what is allowed is always changing, we want to give you the information you need about your medical expenses to help you to fully understand your tax return.
There are a few surprises when it comes to what the CRA will allow and disallow when it comes to your medical expense so always be sure to ask your tax preparer about items that you believe are questionable. At Catherine Barrie Accounting we usually receive similar expenses from our clients that they believe are tax deductible. Here are the most common items that cannot be included:
- Vitamins
- Naturopath Supplements (The visits are allowed but unfortunately not the supplements)
- Over the counter medication (cough medication, Advil, Tylenol, muscle relaxants)
- Marijuana (Must have a valid prescription from doctor to be allowed)
- Messages (RMT visits are allowed, so be sure to check that your message therapist is licensed)
Click here for the full list of CRA’s allowable medical expenses.
If you’ve had to head out of town for a medical procedure or appointment that you couldn’t obtain at a nearby location, than you may be entitled to claim the costs of that trip as medical expenses. Now the amount you can claim depends on the trip so it is very important for you to keep any receipts and a record of where you left from, and where you went to.
Over 40 Km- If you have traveled over 40km (one way) to get to your medical appointment you will be able to claim your travel expenses for the trip eg. Train ticket, bus ticket, taxi, gas expense
Over 80 Km- If you have traveled over 80km (one way) to get to your medical appointment you will be able to claim transportation, meal, accommodation (hotel),and parking expenses.
Click here for a detailed list of the CRA’s travel allowances
Most medical expense are allowed so if you’ve spent money on anything that seems to be for you, your spouse, or any dependants wellbeing be sure to keep the receipt. Although you don’t have to send in your receipts with your taxes you will need the copies if the CRA decides to ask you for them (this happens more often than you think). When getting your taxes done at Catherine Barrie Accounting we will ask you to bring in your receipts so that if the CRA asks for them we have quick and easy access to the information, saving you time and money. Keep in mind you will need more than a receipt for prescriptions.
For any sort of doctor’s visit, therapy session, or even insurance payments an invoice (receipt) with proof of payment (debit/credit receipt, or payment applied on statement) will be more than enough.
In order to claim your prescriptions you will need the RX numbers which is usually attached to the prescription so be sure to keep those. Many pharmacies can print you off a yearly summary of your prescriptions and payments so feel free to ask them if this is available (it’s easier to keep track this way).
Insurance payouts can be difficult to keep track of, be sure to keep all information in regards to payments, or payouts. Many insurance companies can print you off a summary of your yearly activity outlining any medical claims and payments.
When it comes to your medical expenses the more information you keep, the better off you’ll be.
In order for your medical expenses to have any impact on your taxes, you must first spend a certain amount. If you and make over $75,600 then any amount you spend over $2268 in a year will be considered your eligible medical expenses. If you make under $75600 then you would take 3% of your net income (the amount you make in a year after taxes) and any amount you spend in medical expenses over the 3% would be considered your eligible medical expenses. Your eligible medical expenses are then multiplied by 15% and that is the credit that will be applied to your taxes.
Total Medical Expenses – 3% of net Income (or $2268) = Eligible Medical
Eligible Medical * 0.15= Credit Applied (Non-Refundable)
Medical expenses are the total amount that you have spent on items or visits to doctors, pharmacists, dentists, insurance, and some therapists. The total amount that you have spent, after you receive any insurance payout, will be used to calculate an amount that can be deducted from your net tax owing. These expenses can sometimes have a significant impact on your taxes, so always be sure to keep your receipts.
Personal Information
Through My Account you will be able to make the simple changes you need to your personal information such as:
- Change your address
- Change your phone number
- Notification preference (phone or email)
- Set up direct deposit with the CRA
- Request a remittance voucher (this will be for if you need to send the CRA payments)
Keep in mind your tax preparer will be able to make these changes as well when you file your taxes.
You will be able to change your personal with the CRA quickly and easily using My Account on the CRA website. If you have already created an account simply login using your CRA login and follow the links provided to change whatever information is necessary.
If you have not registered with the CRA you will have to create an account before you can make any changes. Follow the link above to My Account and scroll down until you see the CRA Login and CRA Register Buttons. Click the CRA register button and follow the instructions. You will need your CRA Access code which is usually located on your Notice of Assessment sent to you in the mail from the CRA after you have completed your taxes. If you can’t find this code you can request one be mailed to your address on file with the CRA. Once you have the code you will be able to login and make changes to your personal information.
Many people believe that their accountants can change their personal information for them whenever they need to; however, this unfortunately is not the case. Your accountant can change your personal information for you only once a year, when they file your taxes, other than that it will be up to you to make any necessary changes throughout the year. At Catherine Barrie Accounting we know you have questions about changing your personal information and are more than happy to help you in any way we can.