This year was not as bad as 2010 for late issued T-slips. I think in part, because many Income Trusts became corporations and thus issued T5’s instead of T3’s.
Notwithstanding the conversion of many income trusts, several clients still did not receive their T-slips, especially their T5013’s until the week of April 9th. Thus, between clients using the Easter long weekend to put their income tax information together and clients waiting for their final T-slips, we received a substantial portion of our firm's income tax returns last week. Our tax season for all intents and purposes is therefore condensed into three weeks. The CRA needs to look at the T-slip deadlines and move them all up two weeks IMHO.
I have been surprised by the number of my clients who still have not made TFSA contributions. We have advised them to make TFSA contributions since Day 1, but many have still been slow to make contributions. This is very surprising considering most of my clients would have little trouble catching-up in one fell swoop. I think many people still feel TFSA’s are small potatoes and not worth the hassle in a low interest rate environment.
For some reason I have seen several RRSP over-contributions this year. Over-contributions in excess of $2,000 are subject to a 1% a month penalty. I am slightly baffled by these over-contributions. If you have an accountant, they provide you with your contribution limit in the covering letter that accompanies your income tax return. Whether you have an accountant or not, you receive your RRSP contribution limit on your income tax assessment and if you have misplaced your assessment or don’t remember your limit, you can go onto your personal CRA account and find out your limit. There is really no excuse to over contribute.
Investment Advisors- The Good and Bad
Many of my clients use private investment managers or the private client arms of the major Canadian institutions for their stock investments. I assume when determining the fees for these accounts, the decision makers include a cost for not only the investment management aspect, but also a cost component for the administrative functions associated with the account, such as providing a realized capital gain/loss report at year-end.
The administrative function becomes an interesting issue where my clients have individual investment advisors apart from the private client programs. In these cases, my clients typically only receive a yearly trading summary from the institution and no realized capital gain/loss report.
As many of my clients have significant funds with individual advisors, it is amazing the variance in assistance I receive from these advisors. Some fall all over themselves providing information, including realized gains and loss summaries for which in theory they have not been paid. We even had one advisor this year that kept track of all of his client’s income trusts, month after month adjusting the adjusted cost base of each trust fund for the return of capital component.
On the other hand and definitely in the minority, I sometimes receive a very cold shoulder from some advisors when I request adjusted cost base information, like it is not their responsibility. Well I can tell you, it is certainly not my job to maintain my clients ACB’s, it is my job to report the gains/losses unless I am paid during the year to write up their investments and track the ACB of their investments.
What is especially galling to me is; where the advisor has sold my client several flow through tax shelters (in some cases for well in excess of $100,000) and yet they provide no assistance in trying to track the complex history of the original purchase, the conversion of the flow through units into a mutual fund and the related ACB adjustments. Suffice to say, it is probably not in the advisors best interest to alienate a client’s accountant.
So what is your expectation of assistance if you have say $300,000 to $500,000 or more with an investment advisor? For the advisors reading, am I being too harsh on the advisors for not providing assistance when they are not paid management fees?
Question: who tests the professional tax software programs before they are released and why can’t the flaws be fixed in season? [This is a rhetorical question, I will not comment on it]
What happened to last year’s dividend? Frank Gorshin did not steal it :).
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.