CSANews 92 - page 10

10
Snowbird
alert
Douglas Harry Miller
March 28, 1928 – August 12, 2014
Medipac photographer Doug Miller passed away suddenly doing what he
loved, capturing the beauty and wonder of life with a camera. He dedicated
his time to helping others by working for children’s charities, youth
organizations and filming countless weddings, birthdays and bar-mitzvahs,
all free of charge. He had a lifetime career at the YMCA Business Man’s Club,
helping the leaders of Toronto get fit and ready every morning for more
than fifty years.
Doug was always happy, optimistic and looking forward to the next big
event in his life; his approach served as an example to us all. Over the years,
several of his photographs have appeared on the pages of
CSANews.
He will be missed.
Foreign Account Tax Compliance Act
There is yet another reason to complete and submit the IRS 8840 form. Effective July 1, 2014, Canadian banks will be
reporting the financial activity of all clients who indicate to the CRA that they have a connection to the United States who, in
turn, will pass the information on to the IRS.
The law – the Foreign Account Tax Compliance Act (FATCA) – has been created to catch Americans who are hiding funds
offshore. However, there is no distinction between persons who are wilfully avoiding taxes and “accidental Americans.” If you
spend enough time in the United States to pass the IRS 8840 Substantial Presence Test, you are deemed to be a resident alien
of the United States and are subject to U.S. income tax on your worldwide income.
By filing the 8840 form, you are declaring yourself as exempt from U.S. income tax because your home tax country is Canada.
Canada and the U.S. have a tax treaty in place, which is why we have the privilege to declare ourselves exempt from U.S.
income tax. However, this new law will increase the amount of information-sharing between the two countries so, if you have
not filed an 8840 before – for whatever reason, start now and keep a copy for your own records.
Canada Deposit
Insurance Corporation
The following financial holdings are
NOT
protected
by the CDIC:
Mutual funds and stocks
GIC and other term deposits with a maturity date
that exceeds five years
Bonds
Treasury bills
Accounts or products in U.S. dollars or other
foreign currency
Accounts or products held in institutions that are
not CDIC members
Tax-Free Savings Account Woes
There is a common misunderstanding of TFSA rules that
continues to cause thousands of Canadians to face penalties
from the CRA. Warning packages were sent to 54,700 taxpayers
advising that they had incorrectly managed their TFSA in 2013.
The common mistake is to make a withdrawal and then replace
the money in the account too quickly.
The current maximum deposit which a Canadian can make into
a TFSA is $5,500.00 per year. The common error is to withdraw
funds and replace them within the same year, exceeding the
annual contribution limit of $5,500.00.
Taxpayers who broke the rule were sent a warning package
and given 60 days to respond. Those who did not respond in
time were sent an assessment and were fined accordingly. The
average fine was $516.00.
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