April 09 , 2024  /   Expert Advice

Pattie Lovett-Reid’s Tax Tips: Friendly Reminders for Advisors and Clients

Tax season is upon us once again, and with it comes the flurry of paperwork and deadlines. As wealth advisors, it’s crucial to ensure that both you and your clients are well-prepared to navigate through this period without any unnecessary stress or financial setbacks. Let’s take a moment to review some friendly tax reminders that can help avoid common blunders and ensure a smooth tax season ahead.

Important dates and deadlines.

  • TFSA: The Tax-Free Savings Account contribution limit for 2024 has increased to $7,000.
  • RRSP: Remind your clients to review their Notice of Assessment to confirm their individual contribution limit.

Avoiding Penalties and Maximizing Benefits
The tax filing deadline matters! If your client owes money, the penalty is hefty if they miss the deadline. There is a 5% penalty for filing late, and that’s not all; add a 1% penalty for each additional month they are late. The interest costs can add up quickly.

Claiming benefits can sometimes be tricky. Some of your clients may miss benefits they are entitled to, and others will overstate benefits they feel they are entitled to. Claiming benefits is often in a grey zone, so encourage your clients to seek expert advice when unsure about their eligibility for certain benefits. The cost of professional guidance is often far less than the potential expenses associated with an audit.

Maintain Accurate Records – Be Prepared for Potential Audits
Even if your client believes you’ve filed correctly and claimed all relevant deductions, it’s essential that both parties keep thorough records. The Canada Revenue Agency (CRA) can audit tax returns for up to seven years after filing. Avoid the headache of retroactive repayments by maintaining organized records and retaining all receipts.

Common-law relationships can impact tax filing status. If clients have lived with their partners for more than 12 months, they may be considered a couple for tax purposes, regardless of marital status. It’s important for clients to understand these nuances to ensure accurate tax filings.

Ensure clients declare all sources of income, including earnings from employment, investments, rental properties, and business ventures. Tax avoidance, while not illegal, should be approached cautiously, as the CRA discourages such practices. Failure to report income can result in penalties and legal consequences. In Canada, if you have income from any source, you must file a return.

Utilize Available Resources
Lastly, inform clients about online resources like the My Service Canada Account portal. This platform allows users to access important tax documents, view past returns, and apply for various government services conveniently. By staying informed and proactive, clients can maximize their financial benefits while minimizing potential errors.

It’s important to guide our clients through the intricacies of tax season and help them navigate potential pitfalls. By staying informed about important deadlines, maximizing benefits, maintaining accurate records, and utilizing available resources, we can ensure a successful and stress-free tax season for all parties involved. Remember, the CRA is a lifelong business partner, and collaboration is key to achieving financial success. It’s better to work with them and not against them.

Pattie Lovett-Reid
Chief Financial Commentator
HomeEquity Bank

  • Posted by Ajoshi
  • On April 09 , 2024
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March 20 , 2024   /   Expert Advice

Shielding Your Clients Finances: Pattie Lovett Reid's Tips to Staying Safe This Fraud Prevention Month

With each technological advancement comes a more sophisticated fraudster, and if there is a way they can figure out how to convince your clients to part ways with their money, they will.  Cyberattacks and fraud are escalating. In 2023, Canadians lost $554M due to fraud. Sadly, fraud is big business.  Fraudsters don’t discriminate. Canadians of all ages are targeted, and all are equally as likely to fall for online scams.  However, there has been a long-standing belief that Boomers are more likely to fall prey than any other generation. While Boomers are highly targeted, a recent survey by Ipsos commissioned by HomeEquity Bank found Boomers are more vigilant online than any other generation and, as a result, are no more likely to be victimized.  Boomers are smashing stereotypes and pushing back on the tired punchline that they are more likely to fall victim to scammers because they are less tech-savvy and more susceptible to being tricked. It simply isn’t the case. Canadians 55+ are indeed targeted more frequently, with over half reporting scammers targeting them. But when it comes to falling for scams, every age group is equal. Baby boomers are no more likely than any other generation to fall for a scam. Older Canadians have done a great job educating themselves but must continue to stay vigilant. Scammers are becoming more sophisticated and will continue to come up with new ways to outsmart your clients. Here are a few basics to ensure your clients stay cyber-safe and avoid potential scams and scammers.  Inform clients to never open an email, text or direct message from someone they don’t know. The risk is too significant. It is important for your clients to be suspicious of new websites and links. Your clients should familiarize themselves with the source before they click on anything. Advise clients to avoid using easy-to-hack passwords such as family member names or birthdates. It’s also key to note that your clients should not share any private information with family or friends as they can’t be sure others are as cautious as they are. It’s crucial that clients upgrade and update their software and maintain preventative software programs, which will help to secure their data. Encourage your clients to stay up to date on the latest cyber threats. Your clients can do everything right yet still fall victim to a scammer. If clients receive a call or text from someone they know, they should be cautious but can respond. However, if the message seems strange or out of character, it might indicate their friend or family member's account has been hacked. Instead of responding directly, they should find another way to check if it's legitimate, like phoning them separately, to verify the information. These scammers have upped their game. Clients should always report suspicious activity by calling 1-888-495-8501 or online via the antifraudcentre.ca.  Finally, if your client thinks they have released too much personal information, they should not be embarrassed or ashamed because it happens to smart and tech-savvy people all the time. However, your clients should immediately notify their financial services provider so measures can be implemented to protect them and their money. Pattie Lovett-ReidChief Financial CommentatorHomeEquity Bank