TRUCKING COMPANY AUDITS INCREASE

There has been a recent spike in the numbers of trucking companies that are undergoing audits by the CRA.

This is primarily the result of increases in the number of so-called “Driver Inc.” companies. These are drivers who report their trucking income as if it is corporate business income, even though the drivers should be considered to be employees of the trucking company who has hired them.

The trucking company oftentimes owns the truck, but because of difficulties in finding qualified drivers, they will pay their drivers as if they were corporate entities.

If these audits uncover that these “Driver Inc.” companies are actually in employee/employer relationships, the CRA will assess penalties to both the trucking company as well as the driver.

In addition, the driver will have to report their income as Personal Services Business income in their company, which could result in significantly higher taxes payable than if they had reported the income as regular employment income.

The driver would also not be allowed to claim most expenses as a deduction against their income.

Trucking companies and drivers are being warned to review their employment situation to ensure that they are onside with the taxation rules.

CHANGES TO EI AND CPP RATES IN 2020

Employment Insurance rates will be reduced in the upcoming year.

The rate is dropping from $1.62 to $1.58 per $100 of employment earnings. The maximum insurable earnings will be increasing from $53,100 to $54,200.

The maximum that an employer will have to pay for their employee will decrease slightly, from $1,204.31 to $1,198.90.

On the other hand, Canada Pension Plan premiums will be increasing in 2020.

This will be the second year of scheduled increases to Canada Pension Plan premiums. The premium rate in 2020 will be increasing from 5.10% to 5.25%. The maximum pensionable earnings will be increasing from $57,400 to $58,700.

For self employed individuals, the premium rate will be increasing from 10.20% to 10.50%.

As a result of these changes, the maximum contribution in 2020 will be $2,898 for an employee, and $5,796 for a self employed individual.

Certain Expenses Can reduce Taxes

Various deductions and credits can help to reduce the amount of taxes payable to the Canada Revenue Agency (CRA) each year. Please take a few moments to review the following items, to ensure you do not miss out on any eligible expenses for you and your household. Please feel free to contact your Kemp Harvey Group office if you have any questions or concerns about whether you would qualify for any of these deductions and credits.

 

INFO SLIPS NEEDED FOR 2019 T1

Yes, it is that time of year again – time to file your personal income tax returns. Before you bring your personal income tax information to your local Kemp Harvey Group office, we encourage you to work through the following checklist. This list will help to ensure you have all of the slips needed in order to complete your return.

Name: _________________________________________________________________________________________________