Personal Finance

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

  • Last Updated:
  • Dec 13th, 2017 8:37 pm
Newbie
May 10, 2017
5 posts
Hello, I filed 2015 and 2016 taxes with H&R block and choose to pay via tax refund direct deposit.
On CRA My Account it showed 2 assessed deposits each over $1k. May 9th and 11th.
I also got an email notification from H&R block that they received my payment, but have not yet received anything in my TD bank account.
Is H&R block holding my deposits before redirecting to my bank account?
How long should I expect to wait for a deposit into my bank account?
Deal Addict
Nov 2, 2013
4866 posts
937 upvotes
Edmonton, AB
When filling out the TD1, on the second page there's the checkbox for:
Check this box if your total income for the year from all employers and payers will be less than your total claim amount on line 13. Your employer or
payer will not deduct tax from your earnings.
I only work for this employer for a portion of the year and can't predict my employment income for the year. Rest of the year I work through my incorporated business and plan to pay myself dividends at year end.
- So am I OK to check this box?
- If I do not pay myself at all and just leave the cash in the corporation, can I still check that box?
- If I do end up earning more than whatever Line 13 says, would Payroll just make me fill out a new form or start deducting taxes?
Newbie
Feb 20, 2009
38 posts
Toronto
I have a full time job, but often find myself spending my own money on things like conferences, travel, and even office furniture to further my career. I'm allowed to do some external consulting during my normal work hours and earn ~$2000-$3000/year doing this, so the money I invest is worthwhile. My employer won't complete a Form T2200 because these are technically not 'mandatory' expenses, though they look favorably on conference attendance and consulting work when considering raises and promotions. I looked into applying for 'self-employed' status, but it seems the effort isn't worth getting to claim a few extra dollars of expenses on my taxes. I even asked to take a deduction in salary in exchange for the employer creating a spending account for me, but they didn't like this either. Is there any way that I'm not aware of to avoid taxes on this money I'm spending on furthering my career, establishing an international reputation, and making connections for future consulting employment income?
Member
Dec 19, 2010
311 posts
20 upvotes
Reposting here as someone suggested I'll get a response instead on my own post in Real Estate with the same question.

I purchased a pre-con home with the intention to rent it out. The purchase agreement is in my name and I have the option to add my spouse's name to the purchase agreement. I am in a much higher tax bracket than my wife. The mortgage for the second home will be arranged based on my income so the bank wants my name on the title. They said they don't have an opinion either way if my wife's name is also on the title.

I am considering adding my wife's name so that I can split the rental income (and expenses) 50-50. Before I do this, are there any disadvantages from adding a lower tax rate spouse to an investment property?
Sr. Member
Oct 16, 2007
717 posts
11 upvotes
Can i expense the purchase of a locker for a rental property? Never claimed cca on the rental property before.
Deal Fanatic
User avatar
Nov 19, 2004
7220 posts
993 upvotes
Cambridge, ON
strife220 wrote:
May 13th, 2017 12:46 pm
I have a full time job, but often find myself spending my own money on things like conferences, travel, and even office furniture to further my career. I'm allowed to do some external consulting during my normal work hours and earn ~$2000-$3000/year doing this, so the money I invest is worthwhile. My employer won't complete a Form T2200 because these are technically not 'mandatory' expenses, though they look favorably on conference attendance and consulting work when considering raises and promotions. I looked into applying for 'self-employed' status, but it seems the effort isn't worth getting to claim a few extra dollars of expenses on my taxes. I even asked to take a deduction in salary in exchange for the employer creating a spending account for me, but they didn't like this either. Is there any way that I'm not aware of to avoid taxes on this money I'm spending on furthering my career, establishing an international reputation, and making connections for future consulting employment income?
If you are taking courses at an eligible school that provides tuition receipts then you get tax credits. Conferences generally don't count. Buying a desk for your house doesn't really count as an employment expense if you aren't required to work at home. Job search costs also don't count as an expense. This is a normal part of life. Sure, an employer looks favorably on experience but that goes for every employee out there. Your employer is not going to provide a T2200 because the expenses are not required for the job.

On the consulting side, you may have some option to write off a home office for the business use portion only. But if you are conducting business during normal work hours at your employer's and making $2-3k a year consulting, the business use portion of a home office sounds minimal, so it may not work out to much. Every bit helps, but you will have to work it out or consult an accountant. Travel to meet clients is eligible, but that has to be the purpose of the travel, not a vacation. You would also likely need to show that it is necessary for your business and that you are gaining new business. Spending $2k on travel for $2k of business income will start to be questioned by the CRA.

It sounds like you are motivated and there is some potential for business expenses for your consulting business. Just be realistic about what you claim as an expenses and make sure it is related to your business.
Deal Fanatic
User avatar
Nov 19, 2004
7220 posts
993 upvotes
Cambridge, ON
FirstGear wrote:
May 13th, 2017 11:02 am
When filling out the TD1, on the second page there's the checkbox for:



I only work for this employer for a portion of the year and can't predict my employment income for the year. Rest of the year I work through my incorporated business and plan to pay myself dividends at year end.
- So am I OK to check this box?
- If I do not pay myself at all and just leave the cash in the corporation, can I still check that box?
- If I do end up earning more than whatever Line 13 says, would Payroll just make me fill out a new form or start deducting taxes?
Just check the box or not based on your expectation of income. If your work for the employer is variable, make your best guess as to how much you expect to work. Dividends are income, so you need to consider them as well.

Payroll will just go by the form. It is your responsibility to provide accurate information and update it if things change.
Deal Addict
Nov 2, 2013
4866 posts
937 upvotes
Edmonton, AB
don242 wrote:
May 14th, 2017 9:36 am
Just check the box or not based on your expectation of income. If your work for the employer is variable, make your best guess as to how much you expect to work. Dividends are income, so you need to consider them as well.

Payroll will just go by the form. It is your responsibility to provide accurate information and update it if things change.
I guess worst case is I'll just owe more tax? CRA can't give me grief as long as I pay them what I owe, correct? That is based on my understanding. Even my corporation income is obviously volatile. One day I may make like $500 but next 0.
Deal Fanatic
User avatar
Nov 19, 2004
7220 posts
993 upvotes
Cambridge, ON
FirstGear wrote:
May 14th, 2017 11:37 am
I guess worst case is I'll just owe more tax? CRA can't give me grief as long as I pay them what I owe, correct? That is based on my understanding. Even my corporation income is obviously volatile. One day I may make like $500 but next 0.

They won't necessarily cause you grief, but if you owe more than $3k each year they will ask you for instalments and they will definitely question an improper TD1. As long as you are answering truthfully based on what you expect, it will be fine. But if you are purposefully saying your income is lower so you have less taxes taken off, then that is fraudulent.

To be honest, considering you have business income potentially that does not have tax at the source taken off, i would question the need for a TD1 at all unless you want the employer to withhold additional tax.
Deal Addict
Nov 2, 2013
4866 posts
937 upvotes
Edmonton, AB
(1) For employment expenses, to use those writeoffs, would my corporation need to be paying me some salary, not all dividends ?

Know it's not the only way to do it, but I can't afford to drop Line 150 for credit purposes (employment expenses do not, strangely enough).

(2) If I work for another employer that is NOT my corporation, can I somehow structure it so that I can still claim related expenses, without asking that employer to fill out an employment expense declaration form ?
I.e. Somehow relate that to my business

Cheers
Deal Fanatic
Oct 26, 2008
5209 posts
1025 upvotes
BC
Which tax software do tax preparation services and accountants use? Do they have preferences, or use them all and pick ones depending on client situation?

My reason for asking - as part of my estate planning, while I will continue to use SimpleTax (web-based) as long as I am of sound mind, I need to think of what happens later if I lose it.

Also, I don't expect my Executor to prepare my final return. Are most professionals accustomed to taking over and using the client's chosen software with stored history/past returns?

Seems to me that would be the easiest and best approach for both sides. Or would they want to do it their way only?
Deal Addict
User avatar
Jan 27, 2007
4865 posts
818 upvotes
Peterborough
macnut wrote:
Oct 26th, 2017 4:36 pm
Which tax software do tax preparation services and accountants use? Do they have preferences, or use them all and pick ones depending on client situation?

My reason for asking - as part of my estate planning, while I will continue to use SimpleTax (web-based) as long as I am of sound mind, I need to think of what happens later if I lose it.

Also, I don't expect my Executor to prepare my final return. Are most professionals accustomed to taking over and using the client's chosen software with stored history/past returns?

Seems to me that would be the easiest and best approach for both sides. Or would they want to do it their way only?
Professionals use TaxPrep.

They wouldnt use the historical returns or load the data. They may look at a paper-copy for comparative purposes.
Sr. Member
Jun 10, 2008
940 posts
81 upvotes
When the RRSP contribution is calculated and displayed in the CRA account every year, do they reduce it by the contributions made in Jan-Feb of the same year and deducted from income while filing for taxes for the previous year? For eg. contribution limit for 2017 is 18,000 and I contributed 8,000 in Jan 2017 (and used it to deduct for taxes in 2016, so it is part of the 2016 filing).... does that mean I can contribute 18,000 on top of the 8,000 I already contributed or do I have only 10,000 left for the year?

Edit: I am looking at how they calculated the 2017 contribution limit in myCRA account and I don't see a line for "Allowable RRSP contributions deducted in 2017", so I am interpreting that in my example above I have only 10K left to contribute.

Edit2: I think the "Allowable RRSP contributions deducted in 2016" line includes my Jan-Feb 2017 contributions so I am back to thinking I have 18K left, lol..... can someone else confirm?
Sr. Member
Aug 17, 2006
643 posts
32 upvotes
I received reassessment from CRA as they are not honoring USA tax withheld without the IRS assessment. (1) Now I am wondering if Quebec will also send me such reassessment ?
If they do not honor the tax withheld then I will have to payback refund and will have to pay some more. My second question is, I did contribute to my RRSP but didn't claim on tax filing. Now if I have to pay back, I was wondering If I would be able to claim RRSP contribution? Do I have to refile the T1-adjustment or Can I just change the RRSP section on my account online "Change my return"? Thanks for your expert advice.
Deal Addict
Jan 2, 2015
1129 posts
268 upvotes
Toronto, ON
ks_tiwari wrote:
Nov 19th, 2017 9:40 pm
I received reassessment from CRA as they are not honoring USA tax withheld without the IRS assessment. (1) Now I am wondering if Quebec will also send me such reassessment ?
If they do not honor the tax withheld then I will have to payback refund and will have to pay some more. My second question is, I did contribute to my RRSP but didn't claim on tax filing. Now if I have to pay back, I was wondering If I would be able to claim RRSP contribution? Do I have to refile the T1-adjustment or Can I just change the RRSP section on my account online "Change my return"? Thanks for your expert advice.
You could use "Change my return" to claim the RRSP deduction. That's done pretty fast. Then I think you should request a reassessment. Send them a copy of your IRS transcript (assessment) and reclaim the foreign tax credit.

I don't know about the Quebec stuff, but I assume their system is similar.

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