Archive for the ‘Uncategorized’ Category

5 Ways That Lead to $avings

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“Do not save what is left after spending but spend what is left after saving.”

– Warren Buffett

An interesting quote indeed! It actually makes a lot of sense. Life can be hectic, and when we’re tired and busy it’s easy to make decisions about money far too quickly. However, taking a step back before we spend allows us time to weigh our options and make better financial decisions. This investment of time can lead to impressive savings.

Even the simplest of strategies can reap large saving rewards. We’ve put together 5 simple things you can do NOW to help you save your money.

Know Where Your Money is Going

If you don’t have a budget, make one – budgets work and there are plenty of Apps to assist you. If you already have a budget – do you look at it? REALLY look at it? Knowing how much money you actually have and where your money is going can be a wake-up call. Get the family involved. Budgeting and the value of money are good life lessons for the next generation.

Before You Spend, Ask Yourself:

  • Do I need this? If your budget shocks you, try defining your needs from your wants. Be honest! Keeping nonessentials to a minimum can help your cash flow and protect your savings. Run the numbers and see for yourself.
  • Do I have the best deal? Whether its insurance premiums, cable, or phone plans, make it a habit to know what deals your providers are offering compared to their competitors. Don’t be shy to call your provider to let them know you’re not happy with what your paying. You may be surprised at what they might offer you. If they are not willing to budge, don’t be afraid to take your business elsewhere if you find a better deal – every little bit you save adds up over a year.
  • Is this the best price? Take advantage of coupons. If you cringe at the idea of cutting coupons and flipping through flyers – then don’t! Truth is, it’s never been easier to know where the deals are. For example, if you use an app like FLIPP, you can search for the exact item you want, find the best price, and know where to get it – in seconds. A good motto is never to pay full price for anything, when possible!

Boost Your Cash Flow

Most of us are at home far more than usual this year. Now may be the best time to look around the house and make a list of items you haven’t used in over a year (i.e. furniture, appliances, tools, etc.). Ask yourself “Do I really need this”? If not, sell it! It’s money in your pocket and could fill a need for someone else who is trying to save money.

Are there any memberships you don’t use anymore? For example, hanging on to a gym membership in the hopes that “one day” you’ll use it does not keep you in shape physically or financially.

Also, review your credit card cash back and points plans. Perhaps you can convert reward points from credit cards, Air Miles, or Aeroplan into cash or gift cards. Bottom line is, if your points plans aren’t really benefitting you, maybe it’s time to investigate other options.

Take Control of Debt

COVID-19 has made paying our bills more challenging than ever. Now is a great time to renegotiate debt. Call your bank to see if you can get a cheaper interest rate, or if there is a way to consolidate debt that makes sense for you.

Develop a Savings Plan

Have definite savings goals. Decide on a percent to save for both long-term goals like retirement, mid-term goals like a house, or short-term goals like your dream vacation. Also, don’t forget an emergency fund. Once you have a savings plan, commit to it and ensure your money is somewhere that you cannot see it or touch it until you really need to.

While these suggestions are a great place to start, there are many other ways to save money. Don’t put it off – ACT NOW and call us today. We’ll do our best to understand where you’re at and inform you of other options you may never have considered before.  

Retirement Planning – Be Future Ready!

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Contrary to popular belief, retirement planning should begin as soon as you start working. However, even if you are middle-aged or older, it’s never too late to start taking control of this important planning.

2020 is a sobering reminder of how unsettling not being prepared can feel. While we cannot prepare for everything life throws at us, there is much that is in our control. Retirement planning is a good example.

Here are some simple, yet important, questions to think about now as you plan for your retirement:

What is your retirement vision? Have you set goals?

  • What will you do with your new freedom?  Have you thought of short-term or long-term goals? Do you have a dream list? 
  • If you want to semi-retire, what part-time work makes sense for you? How much extra income would you like, or need, to make?
  • What post-retirement responsibilities will you have? Will you be supporting children, aging parents, or other family members?

Now for the elephant in the room: “How much money will you need?”

  • Consider your current lifestyle. What are your ACTUAL expenses monthly and annually? If you’re uncertain, start tracking them now – you may be surprised.
  • When budgeting, don’t forget the details – everything from vacations, to car purchases, to clothing.
  • Factor in inflation. 2020 is a good example of how prices rise each year.
  • Scope out big family events – upcoming weddings, anniversaries, etc.
  • Plan for unexpected costs, such as dental work, home and car repair, etc.
  • How is your present health? How long do you expect to live?

What will be your sources of income?

  • Consider whether you will be eligible for CPP, OAS, or employer-sponsored pension.
  • Review your existing investment portfolio such as RRSP/RRIF, TFSA, non-registered investment accounts and personal savings. Maximize savings now by investing early to take advantage of compound earnings.
  • If you are a business owner, how long will you be able to draw salaries or dividends from your corporation?

Tax planning questions

  • How can you minimize taxes during your retirement? Are your investments and other sources of income structured in the most tax-efficient manner?
  • Do you understand the differences between an RRSP, RRIF and TFSA, as well as their tax treatment in retirement?
  • When should you apply for benefits under CPP and OAS? Keep in mind, the age you start to receive CPP benefits will impact the amount of payment you will receive.
  • Are there specialized tax credits or tax planning available upon retirement?  For example, depending on your situation, you may be able to share CPP and split pension income with your spouse.

Wondering where to start, or how to move forward?

Feeling confused is totally understandable! During this COVID crisis investment portfolios were severely impacted, but then bounced back strongly. Many who had plans to retire may have decided to postpone their plan, while others were forced into retirement due to layoffs. Other Canadians are simply not ready because of large debts, or insufficient savings. Even Canadians who have been diligent savers simply don’t know where to begin when it comes to retirement planning.

Have no fear – SYC is here! We have been providing retirement planning services for years. So if your goal is to be “future ready”, don’t delay! Call one of our team members and take the first step.

Income Tax Payment Deadlines Extended AGAIN!

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The New Payment Deadline is now September 30, 2020!

The CRA initially extended the payment deadlines for individual, corporate and trust income tax returns to September 1, 2020. The CRA has now extended the payment deadlines once again to September 30, 2020.

That means the CRA will waive any late filing penalties and interest for returns filed after their normal filing deadline – as long as you file the return and pay the taxes owing the return by September 30, 2020. This includes any elections, forms and schedules that are to be filed with the return (i.e. T106, T1135).

The CRA is also waiving any arrears interest on existing tax debts related to individual, corporate, and trust tax returns from April 1, 2020 to September 30, 2020. For GST/HST returns from April 1, 2020, to June 30, 2020. (NOTE: This does not include penalties and interest incurred prior to this period.)

In the case of financial difficulties, it’s still important to file the return by September 30 to avoid an additional 5% late filing penalty on top of what you may already owe. In fact, the CRA is still encouraging Canadians to file their income tax returns as soon as possible even though the deadlines have been extended. We agree! Let’s get this done!

Canadian Emergency Wage Subsidy (CEWS) – Further Extension Announced

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The Canadian government has announced an extension to the CEWS subsidy. Eligible employers will now be able to claim this subsidy until December 19, 2020. We thought it appropriate to give you a heads up as they have also announced proposed changes to the CEWS as follows:

  • Starting with the July 5 to August 1 reporting period (Period 5), new rules will be in place to allow for possible eligibility to employers who previously did not meet the 30% revenue reduction threshold.
  • The previous CEWS subsidy will be replaced with a two-part subsidy. There will be a “base” amount and a “top-up” amount. The top-up amount will apply to employers who are experiencing a 50% or greater revenue decline.
  • Under the new rules, the amount of the wage subsidy an eligible employer could qualify for would vary depending on their revenue decline. Where the revenue decline is less than 30%, the subsidy falls in proportion.
  • Interestingly, this proposal included an option for employers to apply under the previous rule for July and August (Periods 5 and 6) should the amount of the CEWS subsidy received result in a larger amount under the old rules compared to the new rules. 
  • New continuity rules are in place for employers that have recently purchased assets of a business.
  • There will be a CEWS appeal process and an extension to the subsidy application deadline.
  • The legislative proposals also include previously announced measures for the subsidy affecting employers with a paymaster arrangement, amalgamated corporations, tax exempt trusts, and seasonal employees.
  • The draft legislation further includes previously tabled measures to allow the government to temporarily extend or suspend certain federal statutory deadlines and time limits (i.e. tax filing and payment deadlines) up to December 31, 2020.

Clear as mud? Based on our first read through the new rules, they are by far more complex than what we had before, but ultimately perhaps “fairer”. We are going to need time to fully absorb how all of this works and will be issuing additional guidance when we feel we understand this better.

In terms of urgency and timing, we are presently in Period 5 of the subsidy which ends August 1, so no applications for Period 5 can be processed until after that time. Until then, we will monitor any updates and do our best to keep you posted as things are clarified by the Government of Canada.

COVID-19 Home Office Expenses – What You Need to Know

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COVID-19 has resulted in many learning curves for 2020. For example, some of us are working from home for the first time. So, it’s not surprising that we’ve been asked by many clients if and how they can claim home office expenses.

As you would imagine, it’s tricky. Here’s what you need to know.

Definition of home office space

First, you must meet the qualifications of a home office space according to the Government of Canada, which is that it must be:

  1. Used principally (“principally” meaning “more than 50% of the time”) for the performance of office or employment duties. It can be any place in the home such as a kitchen or dining room, OR
  2. Used exclusively during the period to which the expenses relate, to earn employment income, and on a regular and continuous basis, used for meeting clients* or other persons in the ordinary course of performing the employment duties.

*It is the CRA’s view that “ ‘meeting customers or other persons’ as used in subsection 8(13) of the Income Tax Act includes only face to face encounters”. That said, we believe that video calls and phone calls constitute a “meeting” with clients in the context of the work-at-home COVID-19 scenario.

Employer responsibility

Once you have determined that you qualify, your employer must provide a signed T2200 Condition of Employment form which outlines the type of expenses that can be claimed as part of the employment contract.  

What you can claim

It starts to get tricky at this point. Here are some of the more common expenses incurred while working from home – but as you see – not all are claimable expenses. (Due to the pandemic, we will not cover expenses related to meals, entertainment, and travel costs). 

How much of the “Home expenses” you can claim 

Now you will need to calculate the proportionate business usage. There is no specific rule, it can be based on either:

  • Square footage of the workspace as a percentage of the overall square footage of the home; OR
  • Calculated based on business hours used as a percentage of total hours for mixed used home office. For example, if the business hours are 9:00 am to 5:30 pm for five days a week for 36 weeks, the business usage for year 2020 would be 15.45% (37.50/ 168 hours per week x 36/52 weeks).  

Whatever approach you choose, it must be reasonable. You must also be able to provide CRA your supporting documentation (such as the workspace home floor plan and bills) if they should ask. In addition, the home office expense deduction is limited to the amount of employment income.  Any unused deductions (although unlikely) can be carried forward and deducted against future employment income.   

Special COVID-19 reimbursement for 2020

To assist the transition to home office, CRA allows a special rule for an employee to receive up to $500 for a reimbursement from the employer for the purchase of a computer used primarily for the benefit of the employer.  This reimbursement is not taxable to the employee.   

We hope this blog has helped flattened the learning curve as you get yourself organized to work from home. If you need any more information, don’t hesitate to give us a call.


Disclaimer: Information is based on existing tax law as at July 2020, subject to CRA changes/updates on claiming any home office expenses.    

The 75% Canadian Emergency Wage Subsidy (CEWS) – EXTENDED to August 29, 2020

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As we outlined in our April 9 blog, a Canadian employer whose business has been affected by COVID-19 may be eligible for the Canadian Emergency Wage Subsidy (CEWS). On Monday, May 15, the Government of Canada announced that this subsidy (which has been available from March 15, 2020) has now been extended an additional 12 weeks, to August 29, 2020.

The current eligibility criteria for the subsidy will apply to the current June period (period 4). It is possible that the criteria will be different in period 5 (July 2020) and/or period 6 (August 2020). We will keep you posted as the government releases the updates.

*Whatever Baseline Revenue option you used to date will be the method you are locked into for entire period of the subsidy.

Finding Your Money in Unexpected Places

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Most of us are guilty of shoving cash in our pant’s pockets, purses or jackets and then totally forgetting about it. Then, one day we put on a pair of jeans we have not wore in a while and “voila” – 20 bucks we forgot about. NICE! Finding money unexpectedly, regardless of the amount, is one of life’s simple pleasures.

This year we learned of another way you could find more of your lost money, and it may surprise you! Each year the Government of Canada issues payments to Canadians in the form of refunds, credits, or benefits. Believe it or not, some of these payments have gone uncashed by Canadians! Some may have been lost, stolen or in some other way just have never made it to you. In fact, according to the Government of Canada’s website:

“As of May 2019, approximately 5 million Canadians had an estimated 7.6 million uncashed cheques with the Canada Revenue Agency (CRA), dating back to 1998.”

Are you one of those Canadians with an unclaimed refund? Find out today by checking out the new “Uncashed Cheque” feature that the Government of Canada introduced in February 2020. To search for your “lost treasure”, you will need to open “My Account for Individuals” with CRA. CRA has excellent on-line guidance on how to set up your personal account. If you do have an uncashed cheque waiting for you, you are allowed to request a reissued payment from My Account. From My Account, you will find the option to apply in the right menu bar (see example).

Going forward, here are a couple easy ways to ensure you never miss a refund:

Our best wishes as you search and perhaps find all that is yours!

Embrace Technology While Physical Distancing

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Physical Distancing has left many of us starved for interaction with our family and friends. To fill this void, many are taking advantage of modern technology to help stay connected. Even folks who are not technically inclined are embracing Social Media, Video Conferencing, and WhatsApp for the first time – and finding technology not as intimidating as they once thought.

If you’ve put off investigating advances in technology, why not keep the education momentum going by using some of your unexpected downtime to explore the many ways technology is supporting consumers through COVID-19. We’re confident that when you do, you’ll find many useful tools that can make your life safer now as well as much easier in the days ahead. Here are a couple ideas to get you started.

Electronic Banking

Before COVID-19, many people were still enjoying the in-house banking experience. However, during this challenging time, the value of electronic banking has never been more evident. Consider some of the benefits:

  • Pay bills, cash cheques and transfer funds when it’s convenient for you – from the safety and privacy of your own home.
  • Replace hand-written cheques with automated payments or e-transfers, saving you time, postage, and paper.
  • Use your bank card, credit card or a Digital Wallet application to purchase products. One tap with your card and you’re done – instead of using cash that has been handled by a gazillion people (yuk)!

Sharing Information Electronically

It’s inevitable, snail mail and couriers are slowly being exchanged for electronic transmission of information. At Scarrow Yurman & Co. we’re encouraging our clients to get comfortable with ShareFile, our cloud based electronic file sharing application. COVID-19 has actually expedited this as our new standard for accepting and disbursing client information going forward. Here are some of the reasons why:

  • In these uncertain times, it’s a safer for everyone and a far more efficient way to exchange important documents as we do our best to keep up with challenging demands and deadlines
  • With electronic files there’s less chance of valuable documents being lost in a flood, fire or other natural disaster
  • Going paperless is sanitary, health smart as well as good for the environment

Of course, no technology is perfect, but we encourage you to do research and find what will work for you. Why not contact your bank to see the electronic services they have to offer. As always, feel free to contact our office to see the ways technology can assist you or your business in the days ahead.

COVID-19 Updates to Important Subsidy Programs

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“75%” Canada Emergency Wage Subsidy (CEWS)

The Federal government has passed into law the Canada Emergency Wage Subsidy (CEWS) as well as the 10% Temporary Wage Subsidy.  As we noted before, the CEWS provides for an amount to employers equal to 75% of employees’ remuneration paid, up to a maximum of $847 per week per employee, from March 15, 2020 to June 6, 2020.

Employers that qualify for the CEWS in one period will now automatically qualify for the NEXT claiming period.  See our April 8, 2020 Blog for the details on the revenue reduction qualification thresholds. 

It’s important to note that where an employee’s pre-crisis wages were below the threshold of $58,700 the CEWS does in fact provide a subsidy of 75% of the pre-crisis’ wages. In the event that post-crisis wages for that employee are reduced, the CEWS in effect starts to provide a subsidy that is greater than 75%. Read details of this program here.

Remember that for the employers who don’t qualify for the CEWS, the 10% Temporary Subsidy may be available to them – see our April 2, 2020 Blog.


Canada Emergency Business Account (CEBA)

An important criticism of this program was the eligibility criteria of requiring 2019 total payroll between $50,000 and $1M.  In response, the government has widened the eligibility range so that employers with payrolls in calendar 2019 of between $20,000 and $1.5M are now eligible.  The commercial banks are managing this program, and we have seen these loans be processed within about 5-7 banking days after applications were completed. Read details of this program here.


Canada Emergency Response Benefit (CERB)

On April 15, the government announced changes to the eligibility rules of this program as follows:

•    Allow people to earn up to $1,000 per month while collecting the CERB.

•    Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work because of COVID-19.

•    Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.

Read details of this program here.


National Research Council IRAP Innovation Assistance Program

This program assists start-ups during the COVID-19 crisis as follows:

•    This program is for small and medium-sized enterprises with less than 500 employees in the innovation industry. You may qualify if you are in the pre-revenue, high growth, enterprise SaaS and tech space.

•    The focus is on labour costs (i.e. salaries and benefits) with the goal of helping companies retain highly skilled labour. The scale of support is based on the number of skilled labourers.

•    There will be $250 million funding with built-in scalability components. The funding is not tied to COVID-19.

•    If you qualify for the wage subsidy and take advantage of the 75% wage subsidy, you do not qualify for this program.

•    Speaking with the ITA Advisor is required as part of the application process. Unlike the typical IRAP application, this program will not look at the tech component.

COVID-19 Support for Canadian Businesses -April 8, 2020 “75%” CEWS Update and More

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Canadian Emergency Wage Subsidy (CEWS)

On April 1, 2020 the government provided details on the 12-week wage subsidy. The subsidy is 75% of annual employee salary, up to an annual salary of $58,700 for a maximum weekly subsidy of $847. Here are some new important details.

Eligibility update

As of April 8, 2020, the CEWS subsidy will be available to eligible employers who have a gross revenue reduction of at least 15% in March 2020 and a 30% reduction in April or May 2020.

How to calculate decrease in revenue

To measure the revenue loss/reduction, the employer has two broad options:

  1. Compare the current month in 2020 to the same month in 2019; or
  2. Compare the current month in 2020 to an average of their revenue for January and February 2020.

Once you pick the method as noted above, you must stay with this method for entire period of the subsidy.

Accounting method options

Employers would be allowed to calculate their revenues under the accrual method or the cash method, but not a combination of both. Employers would select an accounting method when first applying for the CEWS and would be required to use that method for the entire duration of the program.

How much is the subsidy and who else does it apply to?

Employers will also be eligible for a subsidy of up to 75% of salaries and wages paid to new employees.

The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 would be:

Special rules apply to wages paid to non-arm’s length employees (like employers and their family members), provided they were employed prior to March 15, 2020. The subsidy will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of:

There continues to be no overall limit on the subsidy amount that an eligible employer may claim.


You Must Apply for A My Business Account NOW!

Without this special access account, you will NOT be able to apply for this subsidy.

If you are not sure whether you have a “My Business Account”, then you probably DON’T have one. It will take an investment of time and patience but it is mandatory for the application process. Here are some helpful reminders to get you started:

  1. First, figure out whose SIN will be associated with your corporate tax accounts with the CRA – likely the person who is currently a Director and major shareholders in the business. Then gather personal information on that person – you will need the 2018 personal tax return for that person in front of you as you move through this process.
  2. Watch this video – https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/businesses-video-gallery/register-mybusiness-account.html
  3. Go to this website https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html 
  4. At the bottom of that page start with “Register CRA” – in purple print .to begin the process.
  5. You cannot complete the process without receiving your security code. Regardless of what the video says about mail or e-mail options of getting this code, it ONLY comes by snail mail at this time. You will need to wait about 5-10 mailing days to obtain the security code and then you must return to the website to complete the registration process.

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