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Focused Bookkeeping Ltd

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You can deduct expenses you paid for the employment use of a work space in your home, as long as you had to pay for them under your contract of employment. These expenses must be used directly in your work and your employer has not reimbursed and will not reimburse you. Also, you must meet one of the following conditions:
The work space is where you mainly (more than 50% of the time) do your work.
You use the work space only to earn your employment income. You also have to use it on a regular and continuous basis for meeting clients, customers, or other people in the course of your employment duties.
Keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.
You can deduct the part of your costs that relates to your work space, such as the cost of electricity, heating, and maintenance. However, you cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.

To learn more, visit our blog at

Please give us a call at 604 558 2234 if you have questions.
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Proposed Changes to the Small Business Deduction

The government has proposed changes to the way that small business corporations are taxed that could be quite far reaching.

Canadian controlled corporations that have taxable profits less than $500 enjoy a special lower rate of tax. In BC, the federal tax rate is only 13.5% for these qualified companies. If the company does not qualify, the rate could be 38%.

The proposed legislation suggests that if you do business with another company that is has any ownership by anyone related to you, they may not qualify for the small business deduction, and their taxes could be quite a bit higher.

I suggest you take a look at the following video to learn more, and then feel free to call us at 604 558 2234 if you have questions

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Principal Residence Exemption Rules Just Changed

The income tax system provides a significant income tax benefit to homeowners disposing of their principal residence, in the form of an exemption from capital gains taxation (“the principal residence exemption”). However, there are limits to the exemption. The exemption is intended to be available only to Canadian resident individuals and trusts. Also, families are able to designate only one property as the family’s principal residence for any given year.

Under new rules announced on Oct 3, 2016:
1. The Canada Revenue Agency (CRA) will require a taxpayer to report the disposition of a property for which the principal residence exemption is claimed. The CRA currently does not require this reporting where a property is eligible for the full principal residence exemption. The change means that, when a taxpayer disposes of a principal residence, the taxpayer will be required to provide basic information in the taxpayer’s income tax return for that year in order to claim the exemption. In addition, the CRA will be explicitly authorized to accept late-filed principal residence designations
2. An individual who was not resident in Canada in the year the individual acquired a residence will not—on a disposition of the property after October 2, 2016—be able to claim the exemption for that year. This measure ensures that permanent non-residents are not eligible for the exemption on any part of a gain from the disposition of a residence.
3. Trusts will be eligible to designate a property as a principal residence for a tax year that begins after 2016 only if additional eligibility criteria are met.

Please note that you if are a US Citizen living in Canada, you are required to report the sale of your principal residence on your US 1040 tax return, and you will have to pay tax on the gain on the sale of the property.

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Tax Refunds & Tax Advocacy
Has the CRA sent your income tax refund yet? If not, I may be able to help. There is a way to authorize us to represent you with the CRA, which enables us to log into your account with the CRA and talk to them to determine what is going on, and how to resolve things.
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First Time Home Buyers Tax Credit

You can claim an amount of $5,000 for the purchase of a qualifying home acquired in 2015, if both of the following apply: 1) you or your spouse or common-law partner acquired a qualifying home; and 2) you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer)

The Home Buyer's Amount is a tax exemption, and the credit is equal to 15% of $5,000 representing a tax saving of $750.

Call us at (604) 558-2234 if you would like to learn more, or visit out website at to learn more about our services
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US Tax Compliance

Many US Citizens living in Canada are not compliant in filing their US tax returns, and they are scared about IRS enforcement actions and the potential of significant penalties.

In 2012, the IRS introduced Streamlined Foreign Offshore Procedures to help address the failure to file tax returns by US Citizens living outside of the US. If you qualify, then you only need to file your income taxes and FBARs for the last 3 years.


To be eligible for the Streamlined Foreign Offshore Procedures you:

* Are an individual US taxpayer or an estate of a US taxpayer and
* Are a US citizens with valid Social Security Number. If you don't have one, you can apply for one.
* Have been outside of the US for at least 330 full days, and meet a physical non-residency test.
* Have not have a residence in the US
* Have not filed income taxes (1040) or FBAR (foreign financial asset reporting) for the last 3 years AND such failure to file was not wilful.

To learn more visit our blog at
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Foreign Income Exemption
US citizens living in Canada may be able to claim a Foreign Income Exemption which shelters up to $US 100,800 of income earned outside of the US. In order to qualify, the individual and/or couple need to meet either a bona fide residency test or a physical presence test. Give us a call at (604) 558-2234 to learn more.

We prepare US tax returns for individuals, as well as the corresponding Canadian tax returns to ensure that double taxation is avoided to the greatest possible extent.

To learn more about these services, please visit
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Child Care Expenses
Child are expenses are one of the most meaningful deductions for a single parent or a couple (married or common-law). The amount you can deduct depends on your situation, Basically:
* There are limits on how much can be deducted for each child
* The claim cannot exceed 2/3 of your income
* Normally, the child care expenses can only be claimed by the spouse with the lower income, but there are exceptions
* The child must have lived with you

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MSP Causing You Grief?

We have had many calls from individuals who need to catch up on old tax returns that haven't been filed yet. The reason is that they have been contacted by the administrators of the BC Medical Services Plan about premiums that may be past due, or they are requesting that all tax returns be filed so that MSP premiums can be set at an appropriate level.

In my experience, most of the people they contact haven't filed their tax returns, which means they might be missing out on two fronts. First, it is likely that they have refunds owing to them by the Canada Revenue Agency; otherwise the CRA would be hounding them. Second, MSP premiums might be reduced and/or waived if the taxpayer can demonstrate (by filing) that their income is at or below particular levels.

Please feel free to call us at (604) 558-2234 to learn more ... or visit our website at
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Family Tax Credit

The Family Tax Credit was introduced in 2014, and applies only to tax returns for 2014 and 2015. The Liberal Government has discontinued it because it helped only 15% of taxpayers, and essentially benefited the rich, but not the poor.

Nevertheless, you may still be able to claim the FTC in your 2015 tax returns, if you qualify. Basically, it is available to married or common-law couples with a child under 18, provided they were living in Canada for the year.Both individuals must file a tax return. Other restrictions apply.

How does the family tax credit work?

The Family Tax Credit is based on the concept of income splitting, where spouses in different tax brackets may be able to split their income, moving income away from the person with the higher tax bracket to other person. The savings depend on how broad the difference is in their incomes, and whether they are in different tax brackets. NB. The income is not actually split for tax purposes, but the individual with the higher tax bracket could benefit from the tax credit had the income been split to their spouse. The maximum benefit is $2,000, and this Family Tax Credit can only be claimed by one spouse.
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