Sharpen your pencils, get your calculators ready, BEGIN WORK! Sound like you're back in school and it's exam time again? Getting butterflies in your stomach? Well, your marks aren't at stake, but your money is; it is time to file your nanny's 2009 T4! The deadline is normally the last day of February but because it falls on a Sunday this year, the absolute last day to make sure the T4 summary and any accompanying T4s are in Canada Revenue Agency (CRA)'s hands is Monday March 1. The penalty for late filing is $25 per day with a minimum penalty of $100, and a maximum penalty of $2500. Not only is it important to file T4 information on time, but it should also be completed correctly.
A few things to keep in mind when completing the paperwork:
Make sure you include T4s for all employees paid during 2009 in the 2009 T4 summary. Even if you had an employee with only one pay period in 2009, they still need a T4 to file their taxes, and this needs to be included in the employer's summary.
Check that the appropriate boxes on the T4 are filled in. In most cases, both EI insurable earnings and the CPP-QPP pensionable earnings (boxes 24 and 26) should remain blank. Read up on whether either of these apply to your employee.
3.Use the “Other Information” fields for taxable benefits such as Room & Board. You will need to choose which box number to use and then fill in the appropriate amount next to it.
When you and your spouse file your own income tax returns, use the amounts on the T4 summary for the child care expense deduction. Boxes 14, 27, and 19 (Employment income, Employer's CPP contributions, Employer's EI contributions) can be added together to get the total expense. Keep in mind that in most cases, child care expenses will need to be claimed against the lower income of the two spouses. The maximum amount you can claim will be based on the number and ages of children you have.
How can the process be made simple? Well, you may have slacked a bit in 2009, but make a New Year resolution (or rather, a new tax year resolution) to keep accurate records every time you pay your employee, and every time you make a tax payment to the CRA.
Happy T4 Filing!!
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