Personal tax accountant in Victoria

Pension income, and the split most couples underuse

Victoria has one of the highest concentrations of pensioned households in British Columbia, a great many of them from long public-sector careers. Where one spouse holds a defined benefit pension and the other does not, up to half of eligible pension income can generally be allocated to the lower-income spouse on the return. That moves it into a lower bracket without moving any money.

What counts as eligible pension income is narrower before age 65 than after it, which is the detail that most often makes the difference between a split that works and one that is not available yet. It is an election made on the return, so it is decided at filing time, and it is worth modelling both ways rather than repeating whatever was done last year.

A pension shrinks your RRSP room, and the slip says so late

Members of a registered pension plan accumulate a pension adjustment that reduces the following year’s RRSP contribution room. For someone who has moved from the private sector into a public-sector role, or the reverse, that change lands a year after the event and is the most common source of an over-contribution. The reliable figure is the contribution limit printed on your latest CRA notice of assessment, not a calculation from your income. Checking it before contributing in the first sixty days of the year costs nothing; discovering an excess afterwards carries a monthly penalty tax until it is withdrawn.

Contract income when you are not incorporated

A large number of people in the Capital Region do contract or consulting work for public bodies as individuals rather than through a company. The filing deadline moves to June 15 for the self-employed; the payment deadline does not, and stays at April 30. Interest starts on May 1 on anything unpaid, which is why a June filer can be surprised by a balance that has been growing for six weeks.

Once tax owing passes the threshold for two consecutive years, CRA generally moves you onto quarterly instalments, and the first instalment notice usually arrives after the habit of paying once a year has set in. The self-employed return covers what is deductible, and the instalment calculator shows what quarterly looks like.

Whether the work should be incorporated at all

The question follows naturally, and the honest answer is that it depends on how much of the income you actually need to live on. Incorporation defers tax on money left inside the company; it does not reduce tax on money taken out and spent. For a Victoria consultant billing a single public-sector payer there is a second consideration that does not apply elsewhere. A corporation with one client that resembles employment can be treated as a personal services business, which is worse than either alternative. Whether to incorporate works through the arithmetic without assuming the answer.

The suite downstairs

Secondary suites are a normal part of housing in Victoria, and rental income from one is reportable whether or not there is a written lease. The offsetting deductions are real — a reasonable share of mortgage interest, property tax, insurance, utilities and repairs, apportioned by the space rented. Two points cause most of the trouble. Repairs are deductible in the year; improvements are capitalized and recovered over time, and the boundary is not always obvious. And claiming capital cost allowance on the building can affect the principal residence exemption on the part of the property you rent out, which is a decision with consequences far beyond the current year. The rental income return sets out the treatment.

If you moved to the Island this year

Provincial tax is determined by where you were resident on December 31, not by where you earned the income or where you lived for most of the year. Someone who moved to Victoria in October files as a British Columbia resident for the whole year; someone who left in November does not, whatever their mailing address says. It matters because provincial rates, credits and the treatment of certain amounts differ between provinces. A move is also the moment to check that CRA has the right address, direct deposit details and marital status on file. The British Columbia tax reference holds the provincial figures.

Fully virtual

EverStone is a fully virtual, one-CPA firm. There is no Victoria office. Slips and documents are sent by secure upload link, the draft return is reviewed with you on a call, and it is signed electronically and filed by EFILE. Nothing about preparing a personal return requires being in the same room, and for Victoria that means the engagement costs you an upload rather than a sailing. The document checklist lists what to gather.

If you also run a business, the personal and corporate returns are better prepared together than by two people who never speak — corporate tax in Victoria covers that side.

For bookkeeping in Victoria, the same fixed-fee approach applies to the monthly work behind the return.

People who also need GST filing in Victoria or year-end statements in Victoria can have both quoted together.