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JMPC Tips & Advice

We are pleased to provide a variety of resources on accounting, taxation and other related subjects that we hope will be helpful to both individuals and businesses. Browse through our Quick Tools resource menu and let us know if you have any questions that are not answered here. We will be pleased to help. Simply contact us by email or give us a call at 587-392-4080. We would be happy to meet with you for a free, no-obligation consultation.

Beware of Selling Your Principal Residence

For many years, the Canada Revenue Agency has had an administrative position that did not require individuals to report the sale of their principal residence on their tax return in the year they sold their house (under a few conditions). This position changed in 2016!

For 2016 onwards when a taxpayer sells their principal residence they are required to report the disposition on their tax return. For many taxpayers, there will be no tax (as the case in the past), however, failure to report the disposition on the taxpayer’s tax return will now result in heavy penalties and interest.

The principal residence designation form, required to be filed with the taxpayer’s tax return (the form required to be filed to make the sale of the taxpayer’s principal residence tax-free), is an information return. Per the Income Tax Act, the late filing of an information return results in a penalty of the lesser amounts of:

  1. $8,000; or
  2. $100 for each complete month from the original due date required to file the form (generally April 30 following the year of disposition) to the date the form is filed with CRA (to CRA’s satisfaction).

The penalty can be quite substantial, especially since the disposition of the taxpayer’s principal residence is usually tax-free. Due care is needed to file the principal residence designation form on time and completed to CRA’s satisfaction.

If you have sold any properties in 2016 or onward, please contact me and I’ll be able to help you file your personal tax return with the necessary disclosures required by Canada Revenue Agency.

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Tax Credits for Teachers

Teachers for 2016 and onward can now claim a 15% tax credit on school supplies purchased in the year, up to a maximum of $1,000 purchased in the calendar year.

In order to claim this tax credit:

  1. the teacher must have a valid certificate in the province where employed; or
  2. the teacher must have a certificate or diploma in early childhood education that is recognized in the province where employed.

The supplies must be used in a school or a regulated child care facility for teaching or helping students learn, not reimbursable and the supplies are not deducted in calculating any person’s taxable income.

  • Examples of supplies include:
  • Construction paper
  • Flashcards
  • Items for science experiments
  • Art supplies
  • Writing material
  • Games and puzzles
  • Books for the classroom

Caution as the CRA may ask for a certification signed by the teacher’s employer that attests to the amount paid for eligible teaching supplies purchased in the year.

This is a great tax credit for teachers given the cost they invest in students each year.

If you want additional information in relation to the tax credit, please contact me.

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