Changing rules for Canadian tax returns
February 18, 2015

Often, business owners and even individuals seek out professionals when it comes time to file their taxes. Accounting firms, after all, are staffed by the experts - they're the ones with degrees in the field, the experience and the know-how needed to contend with the densest of subject matter and the most confusing laws.

While some novices find that using accounting software can help them stay on the right path, consulting with the pros never hurt anyone. And that might be a particularly good idea this year, as there are a variety of changes to Canadian tax law that could affect a large number of people. 

Bookkeepers should be aware of the following shifts, as well as any others that might affect how they file this year.

Foreign investment holdings
According to Collins Barrow, 2015 heralds a new era in the way foreign investments are reported. While in past years, citizens and business owners had to file Form T1135 to specify these elements worth more than $100,000, their location and income, this document has evolved.

Now, more details are required, the source noted. When filing, accountants must specify the name of the entity holding the funds in the foreign nation, the country where it's located, the cost at year-end, the highest price point during the year, the total income or loss and the capital gain figure. 

Family credits
While this may only apply to some business owners, plenty of other Canadians might be able to benefit from this year's new child tax credit, so professional accountants need to be very familiar with the law. According to CBC News, families with children under 18 will be eligible for a tax break when filing for the 2014 tax year - specifically, up to $720 per year, per child between 6 and 17. That being said, accountants need to specify that this payment won't be made until the summer. 

Disability withholding
As Cowan Insurance Group pointed out, there's also a shift in tax withholding requirements for those who qualify for disability benefits. This year, the Canada Revenue Agency has deemed that income tax is to be taken from taxable payments from both short-term and long-term disability plans as soon as they're doled out. While this has likely been the case for long-term benefits for a while, it is a significant change for those who get short-term payments.

The shifts made this year won't affect everyone across Canada, but they're likely to be common enough that accountants will want to familiarize themselves and be prepared to deal with any questions clients may have.

Nexus: G-WEBCD3