SourcePoint. Business Group Serving the Greater Toronto Area with Nine Offices NEWSLETTER – Winter 2009 Edition Covering Aspects of Security & Liability for Personal and Business Property and Business Operations of the Owner. Year End 2009 & Business Opportunities Tax Free Savings Accounts: As noted in prior newsletters. This account has annual $5,000 contribution limit that accumulates each year starting with 2009 and the earnings are tax free. You do not have to contribute this year to start this account as CRA will advise you of your limit each year. For example, if you inherit $25,000 five years from now, you would have also have built up a $25,000 contribution limit that you could use to invest this money by setting up an account at that time. Registered Disability Savings Account: Do you know that if you have a child or are over 18 and file a T2201 Disability certificate with Canada Revenue Agency, you can open one of these retirement accounts? They are very unique in that while you cannot deduct the contributions, the government has a huge grant program that matches your money depending upon your income level. For example, if your family income is less then $78,000 or if you are over 18 and your net income is less than $22,000, you can get a grant of $3,500 for a $1,500 contribution as well as a $1,000 Canada Disability Savings Bond. There are many other rules and regulations on withdrawals but these accounts are a fantastic way to build a retirement income for your disabled child or for a person with a permanent disability. Please call us for further information. These accounts operate on December 31 deadlines. Capital Gains/ Losses: Please be advised that if you have losses or gains and you have an opportunity to offset them for the 2009 year, the Christmas shut-down of financials institutions/stock market clearing of trades, etc may prevent your transaction from closing until 2010. Please check with your advisors and review your situation. Vehicles/Automobiles: If you have a 100% business vehicle purchase that can be deferred until July 1, 2010, you will save the 8% PST due to the implementation of the HST in Ontario on that date. However, there are other considerations, interest rates at certain dealers are very low, prices are very negotiable and if it is just before your year end, and it is a purchase, you can get a GST input credit and a quicker write-off compared to purchasing the month after your year end. Each case should be reviewed. Home Renovation Tax Credit: Please start accumulating your receipts now for your expenses. There is no credit on the first $1, 000 but on the next $10,000. This does not include the cost of tools, only materials or purchased items such as Hot Tubs, furnaces, roofs etc. Collection Issues/Bad Debts: If your collection efforts are not being effective, please consider using a collection agency to assist you with your old A/R. If a customer is not paying you, are they really a customer? Our SourcePoint group has had experience with a firm called CrediMax. They are professional and treat your customers with respect. They assume the roll of the heavy and not you! It is very tough out there and small businesses need all the help they can get. EI – Optional for Self Employed coming in 2010: The government has outlined plans for self-employed people to pay into EI and collect EI benefits for such situations as sickness, compassionate and maternity leave. There is a one year “pay in” qualifying period before you can collect benefits. However, once you opt in and collect benefits, you cannot change your mind to avoid misuse of the system. The program is expected to start January 2010 and we can update you at a later date as more details come available. HST 13% Ontario replacing GST 5%/PST 8% on July 1, 2010: As you may be aware, there will be a new tax system coming into force on July 1, 2010. This program will be very beneficial to business as you will now claim input credits on HST paid at 13% where now you can only claim GST and PST is part of your cost or expense. There are many transitional rules in certain industries but as we become more familiar with the changes, we can discuss your business in early 2010 if you have any issues. Doing Business with the Federal Government: Do you know that the government hands outs close to $1 billion dollars in contracts to small/medium sized businesses a year in Ontario. They cover a wide range of services such as Information Technology, HR Management, Organization Management, Construction, Architecture, Engineering and related maintenance and Consulting. Your business may qualify to quote on these contracts and supply services. You have to do some set up work but it is worth checking it out in this economy. More contracts may be available due to some stimulus money so you might as well try to share in the wealth. Check out the web site and see if you can work with it? www.contractscanada.gc.ca On behalf of all of us at SourcePoint, have a safe and enjoyable holiday season.