There are 3 noteworthy topics that I will present in this blog post. Although there will be some readers who may feel these topics don’t apply to their own situation, all of us know someone that will benefit from this information. So give a friend an early Christmas gift.
First of all the Canada Revenue Agency has informed Canadians there are more incidents of criminals misrepresenting the tax agency.
These attempts at extortion take two forms:
The first way is a phone call from a supposed agent. In most cases the caller aggressively threatens the taxpayer for nonpayment of taxes owing, which needs to be paid immediately. The taxpayers most frequently targeted in this tactic are newcomers to Canada and seniors.
Knowledge Bureau Report(KBR) suggests if the person receiving this call wants to verify that the caller is indeed a tax agent he or she should ask for his or her 2014 line 150 number. Line 150 is total income.
Fraudsters also send emails to taxpayers claiming that a refund is owed to them, and how to collect it.
The purpose of both the phone call and email is to collect either banking information and/or money via money order or a prepaid credit card. Citizens have lost close to a million dollars across the country, and is enough of a concern to law enforcement that alerts have been issued in several cities.
The preferred method of communication from CRA is SNAIL MAIL. They would only communicate with you electronically via My Account or My Business Account. They would usually not phone taxpayers, only if the taxpayer made the initial contact and they replied to that call.
Please refer to the sources for a hotline where a taxpayer can report suspected fraud.
With regard to the extra Universal Child Care Benefit(UCCB) families received in July. KBR wrote recently that the past government missed a chance to increase tax literacy of Canadians.
Eligible families received a one time payment of enhanced UCCB benefits retroactive to January 2015. For each eligible child under 6 the benefit increased to $160/month. Previously ineligible children over 6 now qualified for a $60/month benefit. I am sure families were pleased with the cheques they received.
However, it was not mentioned that in order to pay for those extra benefits the tax credit of $2255 PER child was eliminated. At 15% that elimination of $2255 equals $338 more tax paid per child. Also not explained was that the UCCB is taxable to the recipient, so that extra benefit will be taxable income in 2015.
I am sure there are some civil servants in CRA who are ripping out their hair awaiting changes to these benefits. Unless of course they are a numbers geek like me. When will the enhanced UCCB be cancelled? Will the tax credit be restored? We already know there will be a revamping of these child benefits and credits. The question is when? The 2015 tax return will be very interesting to complete.
A few clients have asked me about their quarterly statements. Regulatory organizations have made quarterly statements mandatory. Portfolio Strategies Corporation must by law send each of you a paper or electronic statement.
Some clients might get worried when they see variation in the market value of their investment from quarter to quarter. May I please stress that this is normal and unavoidable. The more important factor in the evaluation of the performance of your investment, is to look at it in terms of your stated investment time horizon.
Let me give you an example. I had a client tell me in February 2015 that she might retire in September 2015. This was not something she had mentioned in previous meetings. I asked her when she would know for sure. She said she had not decided yet. This situation makes it difficult for me to evaluate whether or not her portfolio was suitable for her stated goal. Your timely communication with me as your financial planner is important, and helps you take your quarterly statements in stride and with confidence.
http://www.knowledgebureau.com/index.php/news/mobilearticle/brief-clients-about-cra-fraud-and-e-mail-scams
http://www.knowledgebureau.com/index.php/news/mobilearticle/government-messaging-on-uccb-cheques-incomplete