SourcePoint. Business Group Serving the Greater Toronto Area with Nine Offices NEWSLETTER – Summer 2007 Edition Federal/Provincial Budgets Lets start with the most recent Ontario Non-Budget. This budget did not reduce the health premium tax of $900 brought in 2005, which was the largest tax increase in history. Personal tax rates have not been changed. The small business tax rate up to $400,000 of taxable income remains unchanged. There is a reduction in the provincial education tax component of property taxes over the next seven years but you can probably assume that local municipalities will soak this up. The biggest financial impact to small business is the increase in minimum wages from $8.00 to 10.25 by 2010. That is 30% including CPP and EI. Another well thought out policy surely to employ more people in the province? The refundable tax credit for hiring qualifying trades in apprentice programs introduced in a prior budget provides a credit up to $5,000 per year as a percentage of the actual expense to a maximum of $15,000. Federal Level, Depreciation for tax (CCA) has increased to 55% from 45% for computers and from 4 to 10% for building used in manufacturing. RESP - Annual $4,000 limit eliminated and the credit of 20% increased from $400 to $500 per year and the lifetime limit to $50,000 from $42,000. Child tax credit - New $2,000 per year tax credit for children Lifetime Capital Gains Exemption of qualifying small business shares- $500,000 to $750,000 by 2008. Age Credit - From $1,000 to $5,066. Pension Splitting - Certain pension income can be split to minimize taxes overall rather then one person including all his or her own pension income. Special rules apply. RRIF - RRSP’s had to be RIFF’d after age 69, now extended to age 71. Capital machinery investments by manufacturing and processing companies can be written off over two years for equipment bought after March 19, 2007 and before 2009. Child Fitness Credit (2007) - Tax credit up to $500 for children under 16 in approved programs. Program must be a camp of 5 days or an eight-week program of at least one day per week. Other details apply. Keep receipts just as you do for monthly transit passes. GST/PST/Payroll Remittances/Government Audit triggers Please be advised that current legislation requires that payments be made in full and that returns are filed when due. If you are late filing and paying, you will be assessed a late filing penalty on the return and additionally on the amount you short pay. It has also come to our attention from a client audit that if you do not fill all areas we identify in our instructions to you on government remittances, you will run a higher risk of audit from submitting incomplete information. Worker’s Compensation/ Employee & Employer Relationships: We repeat this section due to the diligent efforts of WSIB audit groups. If you hire a sub-contract person/company and they do not provide you with proof of coverage or exemption from WSIB, you are liable to pay WCB premiums on that person or company doing labour work for you. (No exceptions). WSIB has a multi-page questionnaire, which is used to determine if an individual is an employee or not? CCRA uses similar questions to determine if your sub-contractor is in fact, your employee and hence your liability for CPP, EI, Tax, Vacation/Stat pay. Remember, it only takes one disgruntled sub-contractor/employee to go to the labour board or WSIB if they have an injury. SIN#’s are required.                               Incoming Sales/Revenues equal a smiling face: Without new or continuing sales, we all get depressed or concerned about the future and sometimes are at a loss and end up doing nothing to help our situation! Many clients ponder, how do I increase my sales. Sometimes the easiest source of new sales is your current client base. Why can’t you sell them more or expand into new products that are complimentary to your business. Send them emails or faxes about your new products or services. Have you ever asked your customers for a referral? Get involved with a networking group that meets once a week. They are usually early morning meetings and a good source of new business. Consider driving around your area or looking up local businesses from municipal business listings and sending them faxes, emails or calling them. And don’t forget rule number one, if you get new business, reward yourself too; this will motivate you to go for more. This is just a short list of what you can do but the key is that must become part of your monthly routine. Remember; “If you aim for nothing, you will surely hit it,” Rule #2, if you sell it, make sure you collect it!  Personal Financial Review: Our Financial Services partner (Ten Star Financial) has agreed with SourcePoint to meet with any client to perform a special review including personal financial assets, estates issues and as well give you a chance to ask questions on a no charge basis. We feel that this is so important to review to ensure that your family and assets are properly protected and taxes minimized should some unfortunate circumstance come your way. We will advise on future contact details. Mortgage Financing We have recently approved a new mortgage broker “Mortgage Architects” to support our SourcePoint network. They understand the small business owner and our clients have been very pleased to date with their quick no-hassle service. Please call us and we can arrange a meeting for them to help your financing needs. This can also be arranged for recreation and investment properties as well.