The 2012 CPP changes will affect individuals between the ages of 60 and 70 who work while receiving CPP retirement pensions. The overall summary of the CPP changes for January 2012 is described by Service Canada as:

1. Your monthly CPP retirement pension amount will increase by a larger percentage if you take it after age 65.

2. Your monthly CPP retirement pension amount will decrease by a larger percentage if you take it before age 65.

3. Employees under 65 receiving CPP retirement pensions will now have to make CPP contributions. These contributions will increase CPP retirement benefits.

4. Employees age 65 to 70 receiving CPP retirement pensions can now choose to make CPP contributions. These contributions will increase their CPP retirement benefits.

5. The number of years of low or zero earnings that are automatically dropped from the calculation of your CPP pension will increase

6. You will be able to begin receiving your CPP retirement pension without any work interruption

How will the CPP Changes in 2012 directly affect you?

Individuals who are Employed and/or Self-Employed

Now that you know what CPP changes in 2012 are, it’s crucial that you understand exactly how they are going to affect your personal income taxes. The changes will affect individuals who are between the ages of 60 and 65 and are working and receiving the CPP retirement pension by requiring them to contribute to the CPP. If you are an employee or are self employed, Canada Pension Plan contributions are mandatory until the age of 65.

If you are an individual between the ages of 65 and 70, and are either employed or self-employed, CPP contributions will continue to be deducted from your pensionable earnings until or unless you choose to stop contributing.

Employers

Employers also need to be aware of the CPP changes in 2012 and how they will change their corporate accounting and bookkeeping.  Employers must withhold and remit CPP deductions on pensionable earnings for all employees aged 60 to 65 and they must also withhold CPP deductions on pensionable earnings for all employees aged over 65 to 70 unless they have elected to stop contributing to the CPP.

As an employer, it is your responsibility to know your employees’ ages and birthdays, as well as ensuring that you see proof that your employee is receiving a CPP retirement pension. Under the new regulations you must also check if the employee has previously filed to stop contributing to the CPP with a previous employer.  If your current employee has filed in the past to stop contributing, you must request a copy of the filing for your records.

At our Vancouver accounting and bookkeeping services firm we are constantly on top of new updates to tax requirements in Canada. If you’re not sure if things have changed or what the changes will mean to you, contact our accounting and bookkeeping services office today to ensure that you’re informed. We can help you with all of your personal income tax, corporate tax, as well as your Vancouver accounting and bookkeeping needs.

The Harmonized Sales Tax (HST) has been a touchy subject in British Columbia ever since it was introduced in July 2010. Since then, the public has launched multiple campaigns against the HST, citing that a 12% sales tax is just too much for consumers to pay. In fact, under the HST, families pay an average of $350 MORE in sales tax than they paid under the PST plus GST system.

With so much negative feedback regarding the HST, the provincial government has nevertheless agreed to hold a referendum on the matter this June. A “Yes” vote would mean returning to the old system of PST plus GST at 12% sales tax. A “No” vote would mean keeping the HST, but lowering it down to 10% by July 2014.

As it turns out, the Province has indeed been listening to the complaints of British Columbians and a law will be passed governing the HST following a “No” vote this summer. This means the tax would go down to 6% by July 1, 2012 and down to 5% on July 1, 2014. The result would be a 10% HST. This is much lower than both the current 12% sales tax and the two-tax system of PST plus GST.  It is estimated that under a 10% HST, B.C. families will pay on average $120 less tax than under the PST. This tax comparison chart from HST in BC shows what this change could bring:

In addition, the government will be issuing one-time transition cheques to help offset the costs of HST before the first rate reduction in 2012. Both families with children under 18 years old and low- and modest-income seniors will receive cheques of $175 by the end of 2011. Furthermore, the government will increase the general corporate income tax rate to 12 percent on Jan 1, 2012 on big businesses, which is a temporary measure until the fiscal situation allows for further reductions.

The referendum ballots will be mailed out in June and must be returned to Elections B.C. or a Services B.C. office by 4:30pm on Friday, July 22, 2011.

Acton Accounting and Bookkeeping can guide you through the muddy waters of the HST changes and help you make an informed decision regarding the referendum. For more information on how a 10% HST will affect your family or a 12% HST will affect your business, we invite you to give us a call!

Acton Accounting and Bookkeeping Inc. starts a new bookkeeping special: save 50% on the first month with us! This special offer is valid for a limited time so hurry up signing up with us.

There are lots of benefits outsourcing your accounting and bookkeeping. Just like you can read on the flyer above, you realize costs saving thanks to the flexibility offered by outsourcing your bookkeeping work only when you need it.

Also, the accounting fee is variable, depending on the level of your business activity. Moreover, this is a cheaper way than hiring a permanent accountant or bookkeeper.

Our professional expertise in accounting and in particular tax planning will provide you new opportunities  as income can be projected prior to fiscal year end. Cash flow management ensures that the company will meet its financial obligations; or if there is a cash flow issue, the business owner is aware of it before the consequences are felt.

Your government remittances will always be made on time and accounting records are in order ensuring compliance with government regulations: you don’t have time to keep yourself updated? We do.

We will help increase your profitability as well, thanks to timely financial reports and analysis. And, finally, you won’t have to invest in new equipments and administrative features (computers software, desks, office space and personnel).

So if you are a stressed business owner who don’t want to deal with the bookkeeping part of your company, but want professional accounting services to be done on a regular basis, Acton Accounting and Bookkeeping Inc. is the company you need. Again, you will have 50% off the first month if you are a first time client and if you sign up with us for at least 3 months. Don’t wait any longer and call us at 604.737.8800 or contact us by email.

Planning forces the entrepreneur to adopt the following things that are essential for success:

1. Setting Sales Goals and Benchmarks for the upcoming year.
2. Taking a realistic inventory on your company’s current resources.
3. Anticipating for future events.

In essence, you must budget for what is to come in the roads ahead. In the language of accounting, budgeting involves projecting what revenues and expense figures your business will face in the upcoming year.

Having the foresight to budget for future events will allow businesses to be flexible and will allow management to seize potential opportunities and tackle challenges. In today’s fast moving economy, the ability to be flexible and be adaptive is a must.

Download our Budget-Forecasting Form here.