Merry Christmas! Now, go out and help the poor get their tax refunds
Despite a day of rain, it's still a white Christmas outside.
For CAs and CA students, it's a great time to remember to give something back to our community, while you're enjoying what, for most of Ontario, is a picture perfect landscape, as well as the warmth, love and other gifts from spending time with family, .
The easiest way I can suggest that you give back is by participating in the upcoming ICAO low income tax clinics.
You help those in need, among others including recent immigrants, impoverished students, the elderly, disabled and others who may have trouble filling out the simple-yet-maddeningly-complicated personal income T1 tax forms. The ICAO sent out an e-mail their Chartered Accountants members with some additional background:
The year 2009 will be the 41st year of the Free CA Tax Clinics Program, and we need your help more than ever. Last year, a total of 1,600 CAs, CA Students, Associate Students and Membership Candidates helped prepare almost 11,000 tax returns, but we can still do even more to meet the need in our communities.
All that is required is a few hours of your time, between February 17 and March 31. In just one evening, you can help as many as six people. Together, we can help thousands of low-income people receive tax refunds and credits that are only available to them by filing an income tax return. As a volunteer, you receive the personal satisfaction of helping your community, while at the same time enhancing the profile of the CA profession.
The ICAO also points out that the returns completed at the ICAO tax clinics are generally simple. "The clients have low income with no rental properties and no business income. In most cases, there is no tax payable, but the individual needs to file a return in order to be eligible for refundable tax credits, the GST credit and other tax benefits."
Most people who pay rent and have income below $20,000 in Ontario are eligible for tax credits - but they have to apply for them to get them! The exact amount varies based on how much you're earning, paying in rent, and your age - senior citizens get an automatic jump in their credit.
It's sad to think that someone who barely has enough cash to get through the month is going to fork over $50 or $100 to one of those shopping mall tax return kiosks to get somewhere between $200 and $500 back.
That's a huge percentage of their refund - particularly if they barely have enough money for food or any other necessities!
That's where the CAs come in, riding in like the personal finance cavalry.
In addition to providing support by helping them avoid losing a big chunk of their tax return to a for-profit office, you provide an ear to listen to their stories and to feel appreciated by someone.
I've been attending one particular clinic for the past few years - it's heartening to see the same faces year after year. Just like you have a pleasant feeling from having "continuity" on a regular audit client, it's a delight to see the same people coming back to you - with a copy of the return you prepared for them last year in hand to boot!
To sign up and experience 'the wonderful', click here to register yourself. You'll need your member number and password - if you don't remember them, call the ICAO during business hours and they'll help you out.
Alternatively, rather than going through the ICAO you can instead contact the person in in your office who coordinates your company's free tax clinic groups. Most larger companies run their own clinics, which means that you have all the advantages of support from your home office in terms of resources and extra help to get you prepared.
To sweeten the deal the ICAO also has a raffle for those who volunteer at five or more clinics, to win some nice prizes. I mention this mainly to encourage those who are primarily motivated in life to do things if there's a raffle involved to sign up and get more details about the wonderful 'thank you' swag you might win for being helpful.
Additional Information for CA students
The clinics, in addition to being a superb way to help others and become a better person through selfless giving, offer other bonuses - which you'll learn after reading answers to some of the questions I've received:
Q: What is the maximum number of hours at the clinic that can be used as part of the 100-hour Tax Hour requirement?
A: Last time I checked - about a year ago - you can use up to 20 hours from the clinic. Feel free to double check with the ICAO to see if that information is still current, though I don't see why that would change.
Q: And would these hours count as part of the total 2500-hour Chargeable hour requirement as well?
A: Yes, definitely.
Q: It's been a while since I learned about low-income tax credits. Is any training available?
A: Yes - the ICAO will have a training clinic at their offices at 69 Bloor Street East in Toronto and will have training packages available if you live outside the big city and want to hold a session. Sign up soon though, as the sessions are popular and fill up early!
Q: I'm not a CA, but a casual reader. Why do you hot shots need training?
A: Keep in mind that as versatile as CAs are, they don't spend the entire
year cuddling up with the Income Tax Act - or ITA, for those in the
know. Many CAs deal with audits, operations, and all sorts of other
wonderful areas that rarely if ever deal with the rules in the ITA - so
a quick refresher is always a good idea.
Any university professor worth their salt would have given you exam questions and assignments where you not only calculate a tax return for a high income individual, but for someone in the lowest tax brackets - because completely different deductions and credits kick in depending on how much money you've earned during the year. Since most CA firms' clients will be in the middle to upper tax brackets, it's not uncommon to need a refresher on the lowest brackets - knowing where the social assistance income goes "in and out" of a return, for example, is easy but you might be rusty if you haven't done that sort of thing recently. Details concerning how social assistance is treated and the Ontario low income tax credits get treated along with various other topics will be explained at these sessions, along with any relevant changes to tax rules since the previous year, for those who are old pro but still need to catch up on the latest and greatest developments out of Ottawa.
Q: One more question from the preparers: do we get tax prep software if we don't have it already?
A: Yes, the ICAO has a deal to get you tax preparation software for use at the clinics, but honestly, I never used it to prepare the returns at the clinic. The returns are just too easy. Plus, you need to bring a printer - or have one available - to make use of them, and the returns are so short that you can do them by hand as fast if not faster, once you have some experience doing them. Plus, not having a laptop computer creating a barrier between you and your client makes the experience a bit more personal. It's the same reason I'll sometimes use a paper notepad at a meeting rather than take all my notes electronically. Using pencils and pens can add a certain something to the experience.
Aside from making it easier to fix small errors, the only other major advantage of using your computer to prepare the return is that it's easier to print a second copy for the client to keep for their records - but you can just as easily accomplish the same thing by using carbon paper when filling out returns by hand - yes, it's an archaic technique, but hey, it works. Alternatively, clinics located in actual offices may have a photocopier that will allow you to quickly duplicate the completed return. That's a very popular option when it's available!
You must be excited and ready to do the ICAO clinics - so go and sign up today.
Next time, look forward to a discussion on the topic of what it's like to receive job offers while you're on vacation. And how delightful it is to say, thanks, but no thanks.