CRA MOBILE PHONE APPS: Tools for Individuals and Businesses

CRA provides a number of mobile phone apps that taxpayers (individuals, corporations, etc.) can use to assist with their tax obligations.

CRA BizApp – An app for small businesses owners to view and pay outstanding balances, view account transactions, view expected GST/HST returns, and view the status of filed GST/HST and corporate income tax returns.

CRA Business Tax Reminders – An app for businesses which sends pop-up notifications and/or calendar reminders for individual and business due dates for installments (individual, corporate and GST/HST), returns, and remittances (payroll and GST/HST).

MyBenefits CRA – An app for individuals which provides a quick view of an individual’s benefit and credit payment details and eligibility information.

MyCRA – An app for individuals which provides access to key tax information such as notice of assessments, tax return status, benefits and credits, and RRSP and TFSA contribution room. It also allows individuals to request a proof of income, manage online mail, update contact information, and update direct deposit information.

 

Action Item: Consider using one of these apps to assist with your tax filing obligations.

 

The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

CONSTRUCTION ACTIVITIES: Reporting Obligations for Subcontractors

The importance of properly reporting subcontractor payments in the construction industry. 

A July 17, 2017 Technical Interpretation examined the conditions which would require the filing of a T5018, Statement of Contract Payments.

Where a person or partnership primarily derives their business income from construction activities for a reporting period, a T5018 should be filed for any subcontractor payment or credit made relating to goods or services received in the course of construction activities. The reporting period may be a calendar or fiscal year but cannot be changed once selected (unless authorized by CRA).

 The term “construction activities” is broadly defined. It includes, for example, the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, dismantling or removal of all or any part of a building, structure, surface or sub-surface construction, or any similar property. Such activities are considered to be those normally associated with the on-site fabrication and erection of buildings, roads, bridges, parking lots, driveways, etc. which are intended to be permanently affixed to the land on which they are built.

It is a question of fact as to whether a particular activity is a construction activity, and whether the business income for the reporting period is derived primarily from such activity. If a T5018 is not required, consideration should be given to the requirement of a T4A, Statement of Pension, Retirement, Annuity, and Other Income.

CRA has also noted that there are businesses that have a significant amount of construction done for them or by them, but the activity is not their principal business. For example, a natural gas company may do a large amount of construction to install pipelines, however, its principal business is gas transmission, not constructing pipelines. It would not be required to file T5018s.

Penalties are levied on the payer when T5018s are not timely filed.  Penalties range from $100 to $7,500, depending on the number of T5018s and the number of days they are late.

 

Action Item: If you are in the construction industry, ensure you are filing T5018s appropriately. 

 

The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

FAMILY MEMBERS: Can I Pay Them a Salary?

Family members as employees?

For a small business, whether operated as a corporation, proprietorship or partnership, it is quite possible that relatives of the owners or partners may be engaged as employees. Due to the closer familial relationship between employer and employee, CRA pays particular attention to ensure that the salary is truly an eligible deduction to the business.

According to CRA, salaries to children and spouses are deductible as long as all of these conditions are met:

  • the salary is actually paid;
  • the work the family member does is necessary for earning business or professional income; and
  • the salary is reasonable when considering the family member’s age and the amount one would pay someone else.

CRA also states that T4s are required for all employees, including family members, and subject to payroll deductions, as appropriate. Payment in the form of room and board is not accepted by CRA.

 CRA suggests that the average salary for an arm’s length person providing similar services under similar conditions would provide guidance as to reasonableness.

 

Action Item: Consider whether family members can perform services for one’s business, and what level of income is reasonable.

 

The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.

No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Marsha MacLean Professional Corporation