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SUMMER 2002 E-NOTES

To print the summer E-notes click here:


CONTREN MANAGEMENT CONSULTANTS INC.

SUMMER 2002 NEWSLETTER

 

PROVINCIAL BUDGET

The recent Provincial Budget did not provide any new tax relief for the average business owning taxpayer.

There was additional discussion regarding the education credits for private school students but at this point you cannot determine which private schools will qualify for the education tax credit.

 

STATUTORY (PUBLIC) HOLIDAYS

A reminder that the following are public holidays in Ontario, Canada Day, Labour Day and Thanksgiving. Please note that the Civic Holiday, August 5, 2002, is NOT a public holiday.

If your employee works any public holiday they are entitled to either 2.5 times their regular pay or 1.5 times their regular pay plus a day off with pay.

As mentioned previously the new Employment Standards Act forces employers to pay public holiday pay to all employees, effective upon their hiring. There is no longer a three month exemption upon hiring. Part time employees receive public holiday pay based on their average daily hours worked. For example, if you had an employee that worked one day per month for eight hours that employee would be entitled to eight hours of pay every public holiday.

 

SUMMER OFFICE HOURS

As in previous years our office will be closed on Fridays from May 31, 2002 until September 6, 2002. You will be able to leave a confidential Voice -Tel message, which we review on a regular basis. Our office will be open, as usual, from nine in the morning to five in the afternoon Monday to Thursday.

 

2001 PERSONAL TAX RETURNS

We wanted to thank our clients for providing their personal tax information on a timely basis. Your efforts allowed us to prepare and file all tax returns by the due date. In fact this tax season was the most effective since our inception. Thanks.

We would appreciate receiving a copy of your 2001 personal tax return assessment before September 2002 in order to assist with your 2002 personal tax planning.

We also require your personal assessment as all financial institutions demand copies of your personal assessments when reviewing your business financing arrangements. As our office usually provides the information required regarding the business the process would be much quicker if we had our clients personal assessments on hand.

TAX FREE EMPLOYEE GIFTS

A reminder that Revenue Canada has changed the rules regarding "tax free" employee gifts. Effectively an employer can reward an employee with two non cash gifts per year, as long as the total value of the gifts does not exceed five hundred dollars. These gifts can be in recognition of special days such as birthdays, Christmas or marriage. The employer can also reward an employee, following the same guidelines, as a bonus for work efforts (ie: years of service). Please note that Revenue Canada’s definition of non cash gifts does not include gift certificates.

RRSP DEDUCTIONS

A reminder that the foreign content maximum for your RRSP programs has been increased to 30%. With the "staleness" in the Canadian securities marketplace this may be a good time to review your portfolio mix with your financial advisor.

The maximum RRSP earned deduction for 2002 and 2003 will remain at $13,500. This increases to $14,500 for 2004 and to $15,500 for 2005. For the 2006 and following taxation years this amount will be indexed.

RECORDS RETENTION

A reminder that Revenue Canada requires companies to keep their business records for a minimum of six years. This six year time frame is specified in both the Income Tax Act and the Excise Tax Act (GST). These Acts require the business to keep both source documents (ie: daily sales reports and tapes) and computer records (ie: backup diskettes).

You may now start destroying your business records for years ending January 1996 and earlier. Keeping all of your records for six years also satisfies the Employment Standards Act requirement to retain all your payroll records for a minimum of five years.

TELEPHONE LAND LINE COSTS

Several of our customers have negotiated reduced business line rates with Bell Canada. These businesses are saving $10/month per line simply by signing a two year contract with Bell Canada. The average small business has five phone lines. This contract would result in $3,000 of savings in telco costs in five years with no change in service.

Please note that this contract option is not available in all areas due to your local Central Office location.

DEATH AND TAX PLANNING

Recently a new client passed away suddenly. Our office was assisting in the reorganization of the family and business structure in order to minimize the tax liabilities and probate fees upon the death of either spouse. The changes suggested were not completed in time so the surviving family members (estate) were out of pocket a significant amount of money unnecessarily.

Our suggestions are to review and update your will, ensure that your company has sufficient insurance on the shareholders/owners and that personal investments are held jointly by both spouses. After review you may need to contact your lawyer and insurance agent.




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Contren Management Consultants Inc.
109 Industrial Dr., P.O. Box 295
Dunnville, Ontario. Canada N1A 2X5
Tel: (905) 774-2977
Fax: (905) 774-1096
After Hours: (905) 540-7006
E-mail: info@contrenmanagement.com


Contren Management Consultants Inc. 1999. All Rights Reserved.