DT Max version 9.30 features the T1/TP1 program for tax years 1996 to 2005 as well as the 2006 tax planner, and it fully supports T1 efile. Version 9.30 also features the T3/TP-646 program for fiscal periods ending from 2003 to 2006 inclusively. In this version...DT Max T1
Carryforward of instalments to 2006 Program highlights Keywords Notes and reminders DT Max T3
New feature - T3 client templates Program highlights Keywords Forms modified in v9.30 Notes and reminders DT Max T1Known issue fixed in v9.30Carryforward of instalments to 2006Due to changes made with respect to the carryforward of instalment-related information in the Income-Hist keyword group, we recommend that you recalculate your individual self-employed clients with version 9.30 in tax year 2005 in order to obtain the right carryforward information in 2006. You can create a filter (option Filter the client list in the Tools menu) searching for the keyword Business to get a list of potentially affected clients who should be recalculated. Program highlights2006 tax changesThe new federal and provincial tax brackets and rates, non refundable tax credits, and 2006 budget changes are summarized in the following documents: Please be advised that DT Max reflects the GST rate reduction from 7% to 6% and the new maximums for passenger vehicle purchases (class 10.1) and leased vehicles, applicable after June 30, 2006. 2006 tax formsFederal and provincial personal income tax forms have been updated to reflect the majority of the 2006 budget changes. However, these forms are NOT approved by the government and should only be used for planning purposes unless returns for deceased or bankrupt taxpayers need to be filed. Please refer to the Notes and reminders section for more details. KeywordsModified keywordsThe Vehicle-Exp keyword subgroup of the Employment-Exp group and its equivalent in the Business group have been reorganized in order to allow for the selection of the type of motor vehicle as follows:
Leased passenger vehicle Leased vehicle other than passenger vehicle CCA-Class has a new item to accommodate Quebec adding a yet unnamed CCA class for works of art granting a 33 1/3% deduction.
New keywordsCredit for public transportationThe new federal non refundable tax credit for public transit passes purchased on or after July 1st is entered with the PUBLIC-PASSES keyword. DividendsKeywords have been modified to account for budget changes. For Quebec residents, two different dividend gross-ups and three different tax credit rates apply in 2006. In the rest of Canada, two gross-ups and corresponding dividend tax credit rates apply. The affected keywords are as follows: In the T-Slip group, for keywords Dividend-Act and Dividend-Tax, the following options have been added:
Regular dividends (1.25) Eligible dividends (1.45) For situations where dividends were received but no information slip was issued, the following new keywords may be used:
DIVIDENDS-BEF Quebec Parental Insurance Plan (QPIP) - T4 group Contributions to this provincial program through employment, referred to as PPIP on federal slips, are entered in the PPIP keyword of the T4 group. These premiums appear on line 312 of the federal return and can be found in box 55 of the T4. Insurable earnings, stemming from T4 box 56, are entered in the PPIP-Earn keyword. Tax assistance granted to natural caregivers of adults - QuebecWith the enhancement of the assistance given to natural caregivers, Revenu Québec has combined onto one line amounts granted for the housing of a parent (Schedule H) and the transfer of the disability amount (formerly Part D of Schedule A). Until final forms are made available, this new amount has been temporarily assigned to line Q[458] as part of refundable tax credits. Data entry into DT Max has been simplified in that respect. In past versions, in addition to creating a file for each of the adults being cared for, a SUPPORT-REL group had to be completed in the claimant's file in order to claim the $550 credit. Data entry was for the most part a matter of repeating what appeared in the family member's file. Duplicate entries for the Quebec return are no longer required to trigger the calculations. However, a new keyword group has been added to capture the qualifying housing period data. If no dates are entered, DT Max will assume that the qualifying period requirements are met:
End-Date.s PERIOD-COMPL - "Yes/No" question to indicate whether at the time of filing the return, there is a reasonable assumption that the minimum period of 365 consecutive days will be completed prior to July 2 if not completed yet. A minimum of 183 days in the current year is also required. Notes and remindersTax planningAt this time of year, T1 taxation activities gravitate around tax planning. DT Max offers a powerful tool in the form of its tax plans, which allow for the impact of various scenarios to be thoroughly analyzed without affecting the production return. To learn more on how to use the DT Max T1 tax plan feature, please click the following links: Deceased or bankrupt taxpayersWhile the planner version is not suitable for filing the returns of living taxpayers, it can validly be used to file returns on behalf of deceased taxpayers. Upon calculating, tax plans will appear with our preliminary updates of tax forms for the new tax year but returns of deceased taxpayers will appear on approved forms from the previous tax year, pursuant to government instructions. For more information, please refer to the following documents: DT Max T3Known issue fixed in v9.30New feature - T3 client templatesTwo template clients have been added to the T3 program. They include sets of keywords to help speed up and simplify data entry. You can bring up the list of sample clients by selecting Data entry templates from the right-hand side display drop-down menu in the data entry screen. From this list, highlight the template that you wish to use, then click OK to have it appear on the right of your screen. Program highlights
The DT Max trust program now has the capability of accepting multiple trustees, and fully calculates minimum tax. Furthermore, the following points summarize the tax changes that have been integrated into this version of DT Max T3: Federal T3 tax changes: Quebec TP-646 tax changes: Manitoba tax changes: Please be advised that the dividend tax credit for the other provinces has not been modified in this version as details of the changes were not available at the time of release. Keywords
Modified keywordsIncome source group When the Dividends keyword of the IncomeSource group is selected, the list of options to choose from has the following modifications:
Actual amount of dividends - after March 23/06 (25%) Actual amount of eligible dividends (45%) The first two options only apply to Quebec-based trusts for which two different dividend gross-up rates and three different tax credit rates apply in 2006. Outside Quebec, the options available are:
Actual amount of eligible dividends (45%) New keywordsAdditional trustees Use the keyword Other-Trustee to enter the last name of the other trustees who are legal title holders to property in trust for trust beneficiaries. The trustee is also an executor, administrator, assignee, receiver, or liquidator who owns or controls property for some other person. Entering that keyword will open a subgroup for entering address and contact number details. Alternative minimum tax of a trust (Schedule 12 / TP-776.47) Minimum tax limits the tax advantage a trust can receive from certain tax incentives. A trust may be liable to pay minimum tax when the following situations are reported: Mutual fund trusts, related segregated fund trusts, master trusts and spousal or common-law trusts in the year in which the trust reports its first deemed realization under the 21-year rule are not subject to minimum tax. DT Max will not calculate the minimum tax for mutual fund trusts and related segregated fund trusts. In all other cases, DT Max will automatically generate the calculation. In order to override DT Max's calculation use the keyword MinTax-Exempt . A new group has been created to generate minimum tax schedules. A distinct Minimum-Tax group should be filled in for each type of minimum tax information that is pertinent to the trust:
Carryforward History Additional information for trusts subject to minimum tax applicable in the current year is entered through the following keywords: Use this keyword to indicate whether or not the trust is subject to minimum tax. FILM-PROPERTY.MT Enter all relevant information concerning amounts claimed on the trust return relating to film property. This keyword offers the following choices:
CCA and additional deduction for certified Quebec film Net income reported before CCA and carrying charges RESOURCE-PROP.MT Information relating to resource property and royalties, and flow-through shares. This keyword offers the following choices:
Share and security issue expenses for Quebec resources Deduction for R&D expenses and foreign resources (QC) Income from resources before deductions and carrying charges Inc. from disp. of foreign resources and recovery of expenses Capital gains on property after a payment default [TP-776.47 L.726]. This keyword offers the following choice:
Use this keyword if the trust claimed non capital losses of other years and must reduce the losses for minimum tax purposes. This reduction applies to any portion of the non capital losses attributable to: This keyword offers the following choices:
Depletion allowance and deduction for R&D expenses CCA for multiple-unit residential building (MURB) Carr. charges and interest exp. - films, resources, rentals Loss sustained after 1994 by a partnership PARTNERSHIP.MT
CAPITAL-LOSS.MT BUSINESS.MT This keyword offers the following choices:
Cap. gain on rental property exceeding total capital loss PROPERTY.MT This keyword offers the following choices:
Trust's share of partnership's property loss Trust's share of partnership's property income Cap. gain on rental property exceeding total capital loss FILM.MT This keyword offers the following choice:
PARTNERSHIP-INT This keyword offers the following choice:
This keyword offers the following choices:
Other losses and deductions respecting tax shelters Ontario minimum tax carryover for trusts - Chart 2 (Schedule 12A) Ontario minimum tax carryover and historical information must be entered in order to properly calculate the Ontario minimum tax carryover to be applied. This information has to be entered in full in this version for the first time. The carryforwards will be automatic in subsequent years. When the Carryforward option is selected from the Minimum-Tax keyword, you will be given the opportunity to enter details in a MinTax-CF subgroup for each of the federal, Quebec and Ontario jurisdictions on a per year basis. DT Max also provides an override keyword, AMT-CF-OV . Historical minimum tax information Under the History option of Minimum-Tax , the MinTax-Hist keyword subgroup is used to specify each applicable year. Historical information is then entered through the Amount.amt keyword for which the following options apply:
Ontario additional taxes paid for minimum tax Federal minimum tax carryover applied Ontario minimum tax carryover applied Total Ontario minimum tax carryover - beginning of year Additionally, the MinTax-Hist subgroup contains the RE-ADJUST-EXP keyword designed to accept the re-adjustment of the carryover of the adjustment of investment expenses (Qc). The following options are applicable for the keyword Re-Adjust-Exp.
Re-adjustment of the carryover of investment expenses Trust's agreement to allocate the basic exemption from minimum tax (Schedule 6 / TP-776.47) When more than one trust qualifies for the minimum tax exemption, use the MULTI-TRUST keyword and answer Yes or No. The basic exemption of $40,000 must be allocated among the trusts when the contributions are made by the same individual. The TRUST-NAME.MULTI subgroup of keywords will open to allow data entry of trust name and address details. The portion of the exemption allocated is entered with the MINTAX-ALLOCATED keyword. Forms modified in this versionFederal Schedule 8 - Investment income, carrying charges, and gross-up amount of dividends retained by the trustSchedule 8 Supplement - Investment income and expense supplementary Schedule 9 - Income allocations and designations to beneficiaries Schedule 11 - Federal income tax Quebec Schedule B - Investment income and gross-up of dividends retained by the trust and adjustment of investment expensesSchedule B Supplement - Investment income and expense supplementary Schedule C - Summary of allocations and designations Quebec workcharts MR-14.A - Notice before distribution of the property of an estate MR-14.B - Notice before distribution of the property In-house schedules Allocation of expensesBeneficiary income allocation Notes and reminders
When to file a T3 return?Inter vivos trust The taxation year-end of an inter vivos trust is December 31 except for a mutual fund trust that elects to have a December 15 year-end. Testamentary trust The taxation year-end of a testamentary trust may be, but does not have to be, December 31. The first taxation period of the trust begins on the day after the person dies, and ends at any time you select within the next 12-month period. The tax rates used, and the tax year of the slips issued to the beneficiaries, are based on the year-end of the trust. A December 31 (calendar) year-end for a testamentary trust may be more advantageous for several reasons: Regardless of the type of trust, the return must be filed no later than 90 days following the taxation year-end. Availability of formsWhen calculating a 2006 trust return, DT Max issues the following diagnostic: The government regulations require tax returns be filed on the previous year's approved forms when current year forms are not yet available, all prescribed forms are those approved for the 2005 tax year. These calculations are based on the 2005 tax rules and forms. The rates and limits have been updated for 2006 where this information is available. Use this only for planning purposes, or for filing before the final 2006 program is available. This is based on information available at 31/12/2005. Typically, T3 government-issued forms for a given tax year are only released at the very end of the calendar year. With consideration given to the time required for development and version release, these forms are actually available in their final format around February of the following year. Hence, in spite of tax calculations having been updated for 2006, this advisory message still holds true for version 9.30. It will only be removed when 2006 returns are being produced with the version of DT Max T3 handling the official 2006 forms, early 2007. As mentioned in the message, filing 2006 T3 returns is not only acceptable but standard practice although there is a possibility for government corrections. DonationsThe calculations of donations have been reviewed, especially the carryforwards. We recommend that you verify the amounts carried forward for accuracy. |
