“Taxpayers will sec a number of »
‘changes to their returns for 1988,
‘ primarily as a result of the. first
phase of “tax reform’. But
Revenue Canada insists there’ sno
cause for'alarm. Essentially, com-

;pleting the return ‘involves a.

i. straightforward five-step process...
The five basic steps are: Step I -

‘identification; Step2 - calculation

Of total income; Step 3 - calcula-
-tion of taxable income; Step 4 -

calculation of non-refundable tax"
' credits; and Step 5 - summary of

tax and credits,

The T1 General Tax Guide,
available to.all taxpayers, also fol-
lows this step-by-step and line-by-
line approach. So, by following the
Guide carefully, most Canadians

should have no trouble completing.

. thelr returns quickly and: aceurale~
Step 1 is simply basic informa-
tion about your name, date of birth,
SIN number and so forth, It is es-
"sentially unchanged from previous
years and you should have no
problem completing this step.
Step 2 is calculation of total in-
- come and this 100 is similar to pre-

vious tax forms. The employment .

expense deduction from previous.
years has been eliminated; this will.
contribute to broadening the tax
base, thus permitting the enhance-
ment of the basic personal credit.

Maximum allowable child care

expense deduction will be in-
creased from $2,000 to $4,000 for

each child age six and under and -.

for all children with special care
needs. oY
‘Step 3- - Calculation of taxablein-

a fag corura i -

‘come is also farniliar. It involves
. listing all those deductions which
have not been converted to tax

credits in order’ to calculate-your' -
‘net incofne and: your taxable in-. ._
“come. Major items from this step :

which have been moved to tax

credits aré Canada and. Quebec

Pension Plan- calculations, UIC
premiums | and tuition fees, The
previous income and dividend
deduction has been revised.
“Other than these few changes,

your calculations to arrive at net ..
. income and taxable income will.

follow much the same process as
in past years, Don’ t be alarmed if
your taxable income figure is
higher than in previous years. Ital-
most certainly will be. But there
are still the tax credits to come. |
‘Step 4 - Calculation of total non-
refundable tax credits is the key
- new element in the new tax return,
“where you enter all those items
previously listed which have been

converted to tax credits. This too is

quite straight: forward if you fol-
low the item-by-item explanation
provided in your tax guide. .

The Guide will tell you what
amount you can enter for each
item, For example, the basic per-
sonal amount is $6,000, the age
amount (over 65) is $3,236, and so
on, Then, when you have entered

— alll the amounts for which you are
eligible, you simply total them and.

multiply .by a factor of your total
non-refundable -tax credit.

‘There is one exception to this
process. This deals with charitable
donations or gifts to Canada or.a

Province, Here, the conversion

os

Volunteers help needy —
complete tax returns

_ Revenue’ Canada’s community
volunteer program, now in its 18th
“year, provides practical. help in
- preparing tax returns for people
-- who need assistance but can ‘t af-
ford to pay for it.
By the time the return deadline of

April 30. arrives, some tens of.

thousands. of Canadians will have
benefited, Revenue Canada says.
Community groups and associa-
tions are encouraged to.participate
this year, as every helping hand is
welcome. Best of all, no previous
experience is required, only adesire
to help others. ,

Training sessions
are provided

The tax department provides |

small-group tax training sessions to
volunteers, usually in January or
February. Changes to the tax forms
are reviewed and reference material
is supplied to each volunteer. Then

the volunteers help others in their |

community — especially low-in-
come earners, immigrants, the

elderly, arid the disabled.

Only straightforward tax returns -

are completed. by volunteers, but

- ongoing assistance is available — ;
from the tax office if a difficulty is. | -

encountered. This year, the effects
of tax reform, will place a greater

demand on the service and the need- .

for volunteers is greater. than ever,
‘Becoming a tax volunteer is easy

and rewarding. Community groups
‘and organizations interested in or-

ganizing ‘this vital community ser-

vice can contact the public affairs ~

officer in the nearest district taxa-
tion office to arrange a time and

place for training the group's mem- Pook.

bers.

Individuals who would like to be- ©

come voluntecrs are equally wel-

come, and may joina training group
by calling the district office public
affairs officer who will put them in
touch with a.group. Phone numbers
are listed in the telephone. book
under Revenue Canada, Taxation or
in the tax guide which accompanies
all tax returns, .

Personal Income Tax/Confused?
‘See A Professional

_ H.W. Hepburn, C.A.
209 - 4650 Lazelle Avenue
(Credit Union Building)

P.O. Box 888 |
_ Terrace, B.C. V8G 4R2
Phone 638-0361

Basic personal smount

Step 4- Calculation of Total Non-Refundable Tax Credits
Claim $6,000.00 300

sei}

‘THE MONEY SUPPLEMENT, PAGES _

‘easier than you think’ —

Age amount, if you ware born.in i923 or earlier (if you did not
tecerve tha Otd Age Security pansion, aliach letser i giving rensons)
| Married amount (provide. details on poge 3) ee

". Claim $3,236.00

_—

ho1
303

- | Amounts for dependent children (provide detail on page 3) -
Additwna! personal amounts [atlach completed Schedule 6)

TD)
N08

SO8

Canada or Qhuebee Pension Plan contributions

 Contnbutions through employment from Box (0) on ail T4 stips (maximum $ 47800)
Contribution payable on seif-employment earnings (from page kK) an

_! .
hos
a10

Eligible pension income amount (maximunh $ 1.000)

Unemployment Insurance pramiums from Bax (E} on all T4 slips (maximum Ses086)

312
ate

Crsabihiy smount for sai! (claim $ 3,236.00)

18

Disability smount for dependant other than spouse

ate

Tuition fees for sell (attach receipts)

“p20

Edvcation amount for self {attach form T2202 of 72 702M

Amounts transferred Irom spouse {attach completed Schedule 2)

Turron fees and education amount transferred irom child (atiach form T2202 or 723024)

p22
324:

Medical expensss (attach receipts and complete Schedule 5}

ETI

_ pas

Noit-Rafundable Tax Credits

Allowable portion of medical expenses

. Subtiact: 3% af “Net income” (lina 236 above) (maximum $ 1.600)

“@QORO000% & ©

& 332

a OO
Add ines 300 to 326 inclusive Bnd line 332 pF THS AMOUNT EXCEEDS THe AMOUNT AT LINE 260. STE "UME 235° w GUE) 35
Non-refundabla ax credits - 17% of fine 335 or seo Tax Table A instructions in Guide

* pAdd: Charitable donations and gifts to Canada of a prownce (attach receipts}

Charitable donations (attach completed Schedule 3)

s40

(o]
e

Gilts 10 Canads. & province or or gifts c of cultural property

“ Qn.the first $ 250 of less

Tots! Donations ‘344]

the credit at 17"%is

On tha balance

Total Non-Refundable (odd ines 338, 346 and 348)
Tax Credits (proceed to Steg 5 on page 4)-

the credit au 29%is

Giso | |

Here’s the fun part of your return. It shows the “credits” you “eet to reduce the taxable portion of your

earnings.

factor to arrive at your tax credit is

17 per cent for the first $250 but

rises to 29 per cent for donations
above this level. .

So now you have arrived at your
total of non-refundable tax credits.

- It's important to note that “non-

refundable” means you may use
these tax credits to reduce your
federal income tax payable as far
as ZETO, But they cannot be used to.
ito beyond that point and actually
create ataxrebate.

Having determined the level of.

ihe ey . i
wg 1 8y ba C _ F

taxable income and the total of
non-refundable credits, we now
move to Step 5 - the Summary of

tax and credits. This too, is very.
similar to previous years. You first .

calculate your.federal and provin-
cial tax payable, deduct any. fur-
ther federal or. provincial credits
that may apply and arrive ata final
figure indicating your tax refund
or balance due, ©

In calculating your tax payable,

‘you will note that the number of

tax brackets has been reduced

from 10in previous years, oreffec:
. lively four for Ontario taxpayers..

‘ment of tax brackets will also con-

Starting in 1988, the new brack-
ets and tax rates are 17 per cent for

the first $27,500, 26 per cent for
amounts from $27,501 to $55,000,
and 29 per cent on amounts more
than $55,001. This should make it
simpler for most taxpayers to cal-
culate their tax payable. Readjust-

tribute to the overall lowering of
federal income ‘tax that most
Canadians will be' required to. pay.

cAlloine Co.

CHARTERED ACCOUNTANTS _

8G 187

oe 4634 LAZELLE AVENUE
~ FERRACE, B.C.

: »» PHONE (604) 6 635-4025

ce ‘Chartered Accountants ~
- Providing the Following Services:

~ AUDITING & ACCOUNTING
INCOME TAX CONSULTING

_ MANAGEMENT CONSULTING
COMPUTER CONSULTING

> Alan McAlpine, C.A., Res. (604) 638-0429
Howard Pruner, C.A., Res. (604) 635-7987
J.B. Riding, C.A., Res. (604) 635-6862
Craig Mills, C.A., Res. (604) 635-3078