My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant and a partner with a National Accounting Firm in Toronto. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. The views and opinions expressed in this blog are written solely in my personal capacity and cannot be attributed to the accounting firm with which I am affiliated. My posts are blunt, opinionated and even have a twist of humor/sarcasm. You've been warned.

Wednesday, March 21, 2012

Confessions of a Tax Accountant -2012- Week 2 -This that and other useless tidbits

 

Electronic Donation Receipts


With the proliferation of online charitable donation sites, many people now make their charitable donations online. However, the electronic receipts you download that reflect your payment are not official charitable donations receipts, but just payment confirmations. Last week I had several clients provide the electronic payment receipt, but not the associated official charitable receipt. 

The Canada Revenue Agency (”CRA”) will not accept the electronic payment as evidence of a donation and will require an official donation receipt with the organizations charitable number. When making an online donation, you should ensure you download the official receipt immediately where it is available.

In many cases the donation receipt is not issued immediately, but follows in the subsequent day or so, therefore you need to be diligent to ensure you obtain the official donation receipt. I suggest creating a file for electronic receipts and as you receive the official donation receipt, you destroy the electronic payment receipt or move it to a paid bills file. Then, every month or two, review the file, if you have not received the official receipt, follow up with the organization at that time. This way, you will not be scrambling for an official receipt when you file your tax return.

Hey Dalton, where is my Refund!


With apologies to those outside of Ontario, many of my clients are asking why their children are not getting income tax refunds this year, thinking I have forgotten to claim Ontario tax credits for sales tax and rent. As The Blunt Bean Counter does not forget anything (okay, I forgot that I put a newspaper on the top of my car while getting in and drove away, but that is not tax related) I have to explain to them that the Ontario government has decided in its infinite wisdom that its lower income residents are better off receiving their tax credits over time than in one lump sum tax refund. Thus, many people expecting refunds will have to wait for their monthly cheque instead. Ellen Roseman recently had a good article on this issue.

TFSA Audits


I have had a couple clients and one reader ask about the supposed TFSA audit crackdown. I think most of these questions arise from reading Jonathan Chevreau’s article titled Taxman Probes TFSAs in which he discusses how the CRA has begun mailing out questionnaires to individuals that the CRA believes have achieved significant TFSA growth through swap transactions. The CRA is looking at swap transactions in which smaller cap stocks that have a large bid and ask difference were swapped into TFSAs at the lower bid price and later sold at the higher ask price; effectively creating tax-free money on the bid-ask difference. It is interesting to note that these types of transactions were in theory outlawed in October, 2009 by the CRA.

There will be some people who will have grown their TFSA through astute stock purchases who may receive the questionnaire. However, if these were typical stock purchases at market and not swaps, you should not have an issue.

If you are interested, Thorsteinssons LLP has a copy of the questionnaire and discussion on this issue here.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

2 comments:

  1. Hi Mark, I'm glad to hear that CRA will accept electronic receipts (as long as they are the official receipts). I recently had the thrill of having a government program reject an insurance company receipt because it wasn't the "original". They said they could tell it wasn't original because it just looked like a photocopy. Of course, the real oringinal was electronic and the "photocopy" was just a cheap printout the insurance company sent me. All was fixed by reprinting the receipt on thicker more impressive-looking paper. Sheesh!

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  2. Michael, we have filed numereous kinds of electronic and photocopied receipts without issue(of course we will now have an issue).

    I can't comprehend in this day and age why a receipt in any form is not acceptable given we are moving towards a paperless society.

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