Вінніпеґ Український № 1 (13) (March 2016)

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TAXES. ПОДАТКИ Taxation and the Recent Immigrant s Milton Friedman so wisely observed “You cannot simultaneously have free immigration and a welfare state” (Friedman, 1999). This, of course, is an A observation based on pure free market economic theory. If people can immigrate, they will as long as they can improve their standards of living. The higher social benefits usually offered in the destination country contribute to higher living standards for immigrants just as wages do. But unlike wages, which reflect the immigrants’ contribution to the destination country’s output, fiscal (read government programs) benefits must be paid for by the population already living in the destination country, thus creating a net fiscal burden and reducing the living standards of the countries existing residents. While the tendency of immigrants to be attracted by social benefits is based on economic theory, the extent to which it generates a net fiscal burden is an empirical and thus measurable question. It depends largely on the extent to which immigrants earn less than other Canadians. They are seen to thus pay less tax for the services they receive, which are generally, the same services as those received by other residents. There will thus be a tendency to increase the net fiscal burden on all residents through taxation in order to recoup a growing fiscal imbalance. Don’t allow this to happen to you by a lack of tax planning. This lower initial arrival income will not always be so for the immigrant tax payer. When you arrive in Canada you are required, from that day forward, to report all of your world wide income to the tax authorities. So immigrants will now typically have two periods of reportable income. They will be claiming tax deductions for the Canadian period only. The first is the non-residency period measured in the number of days in that year while outside Canada. Then there is the residency period which is recorded on the same tax return. Federal and provincial taxes are based on the province of residence on the last day of the calendar year for immigrants and also for other tax residents. This next point is becoming more important annually. Computerization is allowing the tax authorities to track foreign assets and their values as time moves on. Immigrants to Canada must determine the FMV (Fair Market Value) of their assets at the time of immigration. If you believe that the Canadian authorities will not know what you have outside of Canada, think again. Tax treaties with most countries have closed this avenue of hiding wealth. This is especially true due to the global interest in finding and curtailing the problem of terrorist financing that most countries have signed on to. The rate at which penalties are assessed on this external and hidden wealth are, to say the least, becoming increasingly onerous on the scofflaws that unreport or underreport this type of asset. A few notes are in order in understanding Canada’s taxation system. First, it is based on self-assessment. This means you must file audit-proof tax returns. Second, is the concept of progressivity. Meaning that the more you earn the more tax you pay. Third, is the principle of tax withholding. This applies to employees where the employer is deducting ‘source deductions’ of income tax, CPP and EI. The only way to reconcile if the employer was correct in the amounts deducted is by filing a tax return. A ‘refund’, when it exists, is ‘new’ or ‘found money’ and can be used to make valuable future investment decisions in your financial lives. The question often asked is “Which tax planning techniques can you use as you become more ingrained in the host country and see your net tax burden increasing”? I am going to list some of the more common programs that are available to you to deduct from your tax to the Government of Canada. Their collection arm is the CRA (Canada Revenue Agency). RRSP’s (Registered Retirement Savings Plan): If you have the cash flow, or a lump sum, make RRSP deposits then deduct just enough to get your taxable income into the lowest tax bracket. Given that the tax spread between the first and second tax brackets is about 15%, you will carry forward the unused amount and use the deduction when most beneficial, next year or even further out! The lowest tax bracket is a number below approx. $45,000. If this tax advantage can’t be used, then maybe the use of a TFSA (Tax Free Savings Account) is more beneficial. This technique can build-up a lifetime guaranteed tax-free pension, if started early enough. The Children’s Arts and Fitness Credit: If your children, under the age of 16 take either Ukrainian or other language schooling in the evenings or on weekends, keep the receipts for the federal and provincial tax deduction. Sports such as Soccer, Volleyball or even dancing can be 18 Український Вінніпеґ - БЕРЕЗЕНЬ 2016 -
TAXES. ПОДАТКИ claimed under this heading. In Manitoba the fitness credit is valid to age 23 on the provincial return. Childcare: costs are deductible if they allow both parents to work and be unavailable to the children. If both parents are involved in a family business this maybe an opportunity to have a ‘nanny’ paid for outside of regular school hours. Maybe ‘baba/babusia’ can be paid. A potential claim is possible if set up properly. This category saw an increase of $1000 for each child in 2015 if the amount was spent. Opportunities may even exist that haven’t been looked into when multiple generations live in the same household. Personal exemptions should be arranged such that they allow the actual living arrangements to create a large tax credit for the household. Very large refunds are possible under Canada’s ‘Fairness Legislation” if missed in previous years. Moving expenses: are available where the taxpayer has earned an income in a new work location in Canada that is at least 40 km closer to this location. Rules can apply to students who move to attend a post-secondary education facility in either Canada or outside Canada. The First-time Home Buyers’ tax Credit: can be used by a person, their spouse or common-law partners, who haven’t owned a home in the current or preceding four years. The Public Transit Amount: s a deduction for those of you, or for your qualified children, who have an eligible public transit pass. However, documentation and receipts must be maintained and collected throughout the year. Medical expenses: are an area typically neglected by taxpayers. This is especially true when these expenses exceed 3 % of Net Income and the taxpayer forgets or isn’t aware that employee paid Dental and Extended Health premiums are also eligible for this deduction. There are numerous other credits and techniques available to accurately assess your tax and reduce the amount left for Ottawa to spend. Finding and working with a knowledgeable tax practitioner is the best place to start. Victor Danyliuk, danylv@mymts.net 41 Cordova St. Winnipeg, MB. R3N 0Z9 danylv@mymts.net Ph. (204) 488-4247 Fax (204) 515-4069 Cell (204) 771-6068 Services provided: Tax Returns for Individuals, Small Businesses. Compliance Tax & Tax Planning for Retirement or Tax minimization. Disability and Provincial Caregiver applications Найрідніші продукти зі смаком дитинства Favourite food for family meal 1940 Main Street, Winnipeg, MB Tel: (204) 558-5999 E-mail: dobromarket.food@gmail.com Web-site: dobromarket.wix.com/food MON-SAT: 10.00 am - 07.00 pm SUNDAY: 11.00 am - 05.00 pm - БЕРЕЗЕНЬ 2016 - Український Вінніпеґ 19
Page 1 and 2: #13 БЕРЕЗЕНЬ MARCH 2016
Page 3 and 4: NOW INTRODUSING SUBSCRIPTION! 12 mo
Page 5 and 6: ANNOUNCEMENTS. ОГОЛОШЕННЯ
Page 7 and 8: Dear Friends, The Ukrainian Kino Fi
Page 9 and 10: УКРАЇНСЬКІ ОРГАНІЗ
Page 11 and 12: УКРАЇНСЬКІ ОРГАНІЗ
Page 13 and 14: EVENTS RECAP. ОГЛЯД ПОДІЙ
Page 15 and 16: Вінніпеґ пам'ятає Г
Page 17: Щоб бути в курсі ос
Page 21 and 22: KIDS SUMMER CAMP Many of our camp c
Page 23 and 24: З питань розміщенн
Page 25 and 26: OPINION. ДУМКА P ope Innocent
Page 27 and 28: HISTORY. ІСТОРІЯ Each of the
Page 29 and 30: INTERVIEW. ІНТЕРВ’Ю GOLDEN
Page 31 and 32: 11 locations throughout Winnipeg Ca

Вінніпеґ Український № 1 (13) (March 2016)

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