Personal Finance

Tax time! I'm a public accountant, so ask me, I'll try to respond frequently

  • Last Updated:
  • Oct 11th, 2019 7:45 pm
Deal Fanatic
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Nov 19, 2004
8587 posts
1623 upvotes
Cambridge, ON
Lgupta wrote:
Aug 10th, 2018 6:27 pm
Hi Guys, I am looking for some suggestions:

I am currently working full time and also do some work on the side. I invoice my client as sole proprietor. I suspect the side work would earn me around 12k-15k by the end of the year. My wife is not working currently. She does however supports me in this work. Is it possible to transfer the income from my side job to her and possibly save some tax. My client doesn't know her directly so they don't want to receive invoice in her name.

If not what would be the best way to save taxes in this case. Thanks
The income would still be attributed to you unless your wife does the invoicing. The invoice is the key piece of documentation that the CRA would want to see if they asked. So if your name is on the invoice as a sole proprietor, it is you who claims the income. As Dave mentioned, you can pay a reasonable amount to your wife for her time but it is not likely going to do much and just add a lot more complication. The spousal rrsp is a good option, especially if your wife is not going to be working.
Deal Addict
Mar 3, 2018
1000 posts
765 upvotes
GTA
Lgupta wrote:
Aug 10th, 2018 10:38 pm
Thanks Dave. I didn't think about CPP. I think RRSP would be a good option unless I see an opportunity to create a corporation. Do you think creating a corporation would save taxes and at what income level would you recommend I should incorporate?
Assuming you only have one client you would be deemed a personal services business by CRA. Meaning you would not get the small business corporation tax rate. So as a starter you would need to add clients to qualify for this lower corporate rate.

I would be looking at around $80K a year as a level to start thinking about incorporating. Above this level the fees and administrative burden of using a corporation become worth while. The benefits can be income splitting through dividends, sheltered capital gains on your corporate shares, lower tax rate and protection of your personal assets.
Newbie
Jun 10, 2017
59 posts
18 upvotes
DaveTheDude wrote:
Aug 11th, 2018 9:04 am
Assuming you only have one client you would be deemed a personal services business by CRA. Meaning you would not get the small business corporation tax rate. So as a starter you would need to add clients to qualify for this lower corporate rate.

I would be looking at around $80K a year as a level to start thinking about incorporating. Above this level the fees and administrative burden of using a corporation become worth while. The benefits can be income splitting through dividends, sheltered capital gains on your corporate shares, lower tax rate and protection of your personal assets.
Thanks Dave for your help.
Jr. Member
Mar 26, 2004
176 posts
64 upvotes
Oakville
This is a question about t2200's and car leasing, I know the max amount for a lease that can be written off is $800 per month for a lease payment, what happens if the car is more expensive than this to lease? Are you able to write off a deposit to get your lease down to a lower price say from $1100 per month to $800 because of the down payment? and if so do you separately write off the deposit?

thanks
Deal Fanatic
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Jul 4, 2005
5618 posts
551 upvotes
Ottawa
Can we apply for past years for OEPTC? Turbo Tax online says yes, but my return was re-assessed, but no payments have changed for the OTB.
Newbie
Aug 20, 2018
49 posts
36 upvotes
If I have 10 student painters working for me as contractors and I send them each $500 by PayPal for the month, can I generate an invoice on behalf of each student and store a hard copy of each in case the CRA audits me? Also, what information do I need to put on each invoice? i.e. each student's first and last name and date of service and price. Will that be sufficient in the event of an audit?
Member
Dec 24, 2011
288 posts
182 upvotes
toronto
I am employed with a company and work 100% from home. What deduction can i make in my taxes.
Deal Fanatic
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Nov 19, 2004
8587 posts
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Cambridge, ON
animeshw wrote:
Aug 25th, 2018 8:51 pm
I am employed with a company and work 100% from home. What deduction can i make in my taxes.
You need a T2200 from your employer. Without it you claim nothing. Once you have that you can claim a portion of heating, electricity and maintenance as it relates to your work space. So if you have a 100sqft work space dedicated for work, and a 2000sqft house, you can claim 5% of those bills.
Newbie
Aug 3, 2017
36 posts
6 upvotes
Got a question on how to report covered calls, the details in filling out the schedule 3. I'll keep it specific to just the premiums.
How do I report premiums I made on a options trade?
I believe it would schedule 3 section 3,
Does the dollar amount of the premiums go into column 2 - proceed of disposition?
Column 4 - expenses seems straight forward
Do I leave column 3 - ACB blank?
Thank you
Member
Dec 24, 2011
288 posts
182 upvotes
toronto
don242 wrote:
Aug 25th, 2018 9:02 pm
You need a T2200 from your employer. Without it you claim nothing. Once you have that you can claim a portion of heating, electricity and maintenance as it relates to your work space. So if you have a 100sqft work space dedicated for work, and a 2000sqft house, you can claim 5% of those bills.
Yes my employer will provide the t2200 thanks for letting know the deductions.
Member
May 3, 2016
327 posts
22 upvotes
This question is about capital gains.

I know when we buy US dollar stocks or mutual funds, there are 2 parts of capital gains - 1. the difference in buying/selling stock price 2. the difference in the FX rate at the day of buying/selling.

My brokerage offers a US dollar high interest savings accounts, and because it's a brokerage, I can only transfer in and out the US dollar cash via a "FundServ" code. For reference, it's AAT780: http://financialcrooks.com/tag/aat780/

The unit price always stays the same at $1. For an instrument like this, is capital gains reportable on the fluctuation of the foreign exchange rate between buying and selling?

Thank you!
Deal Fanatic
User avatar
Jul 4, 2005
5618 posts
551 upvotes
Ottawa
jeeva86 wrote:
Aug 23rd, 2018 12:15 pm
Can we apply for past years for OEPTC? Turbo Tax online says yes, but my return was re-assessed, but no payments have changed for the OTB.
bump
Member
Apr 17, 2014
341 posts
191 upvotes
Calgary
T2125 - Capital Cost Allowance claiming

If I buy equipment this year in December but won't be able to use it until April next year:

- Do I have to list it in "Area A" of the T2125 for this tax year? I will not claim CCA on this equipment in this tax year.

- Can I list it in the T2125 next tax year and claim full CCA (without the half year rule)?
Newbie
Oct 13, 2015
81 posts
41 upvotes
Brampton, ON
I am self employed sole proprietor and I did not have tax deductions on my pay for the year. I want to pay tax the for 2018 so that I do not go on tax installment next year.
https://www.canada.ca/en/revenue-agency ... nking.html
above list 3 ways to pay. Which one should I opt to pay for current year (2018)? Or I should just wait till I file the return?
Deal Addict
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Mar 9, 2012
2621 posts
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Kitchener
maxme09 wrote:
Nov 28th, 2018 5:38 pm
I am self employed sole proprietor and I did not have tax deductions on my pay for the year. I want to pay tax the for 2018 so that I do not go on tax installment next year.
https://www.canada.ca/en/revenue-agency ... nking.html
above list 3 ways to pay. Which one should I opt to pay for current year (2018)? Or I should just wait till I file the return?
The easiest way to do it this is to add the CRA as a payee with your banking and your account is your social insurance number. Generally the bank gives you 3 options for the account: 1) Current 2) Tax Return and 3) Arrears.
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