Personal Finance

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

  • Last Updated:
  • Apr 25th, 2018 2:30 pm
Newbie
Oct 23, 2006
57 posts
1 upvote
CPA - Thx for all.

What do you think about the following comment: (taken from this thread http://forums.redflagdeals.com/little-k ... ds-387941/ - the CRA link does not work)

"Generally, when you invest your money in your child's name, you have to report the income from those investments. However, if you deposited Canada Child Tax Benefit or Universal Child Care Benefit payments into a bank account or trust in your child's name, the interest earned on those payments is your child's income."

Does this rule only apply to interest or all income (capital gains, dividends, interest)

What about Rev Quebec as RQ always have their special and 'distinct' way of taxing - seemingly always to their benefit :)

Thx
Member
Nov 30, 2009
379 posts
30 upvotes
My fiance and I currently own a condo in Mississauga, but she has started a new job in Toronto in the new year. We have decided to rent in Toronto to be closer to work and have tenants occupy our owned condo in Mississauga. How would tax filing work if technically we are not making income on our owned condo as we will be using it to supplement the rent we have to pay for the place we're leasing in Toronto? Is there any way to get around this without having to pay taxes on this "income" we're not actually making?
Deal Addict
Aug 30, 2011
2844 posts
672 upvotes
Ottawa
DRGN89 wrote:
Jan 4th, 2018 2:01 pm
My fiance and I currently own a condo in Mississauga, but she has started a new job in Toronto in the new year. We have decided to rent in Toronto to be closer to work and have tenants occupy our owned condo in Mississauga. How would tax filing work if technically we are not making income on our owned condo as we will be using it to supplement the rent we have to pay for the place we're leasing in Toronto? Is there any way to get around this without having to pay taxes on this "income" we're not actually making?
CRA doesn't care that you are renting or buying elsewhere. You must report the income from the property you are renting, but you can deduct certain expenses relating to the rented condo in Mississauga, so it may work out for you anyway. https://www.canada.ca/en/revenue-agency ... educt.html
Sr. Member
Dec 31, 2013
906 posts
446 upvotes
condo
Sorry if this been asked, but if I'm a real estate agent, can I claim wardrobe/apparel as a uniform deduction? What are CRA's rule around this area of expense and would I classify it on my T2125 under other as wardrobe/uniform or other? Thank you!
Sr. Member
Dec 31, 2013
906 posts
446 upvotes
condo
OttawaGardener wrote:
Jan 4th, 2018 2:08 pm
CRA doesn't care that you are renting or buying elsewhere. You must report the income from the property you are renting, but you can deduct certain expenses relating to the rented condo in Mississauga, so it may work out for you anyway. https://www.canada.ca/en/revenue-agency ... educt.html
They can't deduct their Toronto rent as an expense from their Mississauga rental property, right? But isn't there a form that they can fill out that will still allow the owners to claim principle residence on their rental unit due to work relocation (>40KM) ?
https://www.canada.ca/en/revenue-agency ... perty.html
Newbie
Apr 14, 2006
34 posts
8 upvotes
St Johns
Hi, I normally use an an account to do my taxes but this year (because of capital gains) I'd like to use a software to emulate my taxes (based on my 2017 employment income).
Any recommendations on software or sites I can use pls
Deal Addict
User avatar
Jan 27, 2007
4925 posts
848 upvotes
Peterborough
tradinghumble wrote:
Jan 4th, 2018 4:41 pm
Hi, I normally use an an account to do my taxes but this year (because of capital gains) I'd like to use a software to emulate my taxes (based on my 2017 employment income).
Any recommendations on software or sites I can use pls
Studio tax. Not sure when ot will be available, but keep an eye on their website.
Deal Fanatic
User avatar
Nov 19, 2004
7558 posts
1146 upvotes
Cambridge, ON
tmonies wrote:
Jan 4th, 2018 4:26 pm
Sorry if this been asked, but if I'm a real estate agent, can I claim wardrobe/apparel as a uniform deduction? What are CRA's rule around this area of expense and would I classify it on my T2125 under other as wardrobe/uniform or other? Thank you!
Clothing is not considered a business expense in almost all cases. I don't think being a real estate agent requires you to wear specific clothing.
Deal Addict
Aug 30, 2011
2844 posts
672 upvotes
Ottawa
tmonies wrote:
Jan 4th, 2018 4:35 pm
They can't deduct their Toronto rent as an expense from their Mississauga rental property, right? But isn't there a form that they can fill out that will still allow the owners to claim principle residence on their rental unit due to work relocation (>40KM) ?
https://www.canada.ca/en/revenue-agency ... perty.html
They should consider this, but it has NO impact on the requirement to report the net rental income received from the Mississauga property.
... if you make this election, you do not have to report any capital gain when you change its use. However:
- you have to report the net rental or business income you earn; and
- you cannot claim capital cost allowance (CCA) on the property.
They will be subject to the 4 year limitation, as they don't meet ALL the conditions to extend it.
Deal Fanatic
User avatar
Apr 29, 2008
5928 posts
1623 upvotes
Montreal
hellohello wrote:
Dec 11th, 2017 1:58 pm
I guess it wasnt clear to whom the question was addressed.

The question is to the accountant who will be able to confirm that RRSP contributions lower family income with respect to Quebec child support and Quebec child care expenses.

(I independently confirmed that contributions will lower family income with respect to the CCTB)

Thanks
Yes it does in my experience as parent for Quebec child support.

For child care, are you talking
1) about a non-subsidise place and you get a tax credit from quebec
2) a $8 place that you might pay extra on your tax return depending on income?

A 2017 tax year RRSP contribution impact:
1) 2017 non-subsidize might lower net cost (only if it makes you change % reimbursement rate example from 57% to 60% ) since they use current-year family net income line 275

numbers for 2017
http://www.revenuquebec.ca/documents/en ... 17-12).pdf

Going under $96,085 net family income will give you 3% extra (from 57% to 60%) on maximum $9,000 child cost per kid, so $270 extra per kid.

If you would have $100,000 family net income without RRSP contribution, a $4,000 RRSP contribution will give you around $270 extra per kid assuming they went day sre for almost full year at $9,000+ cost each.

From $53,240 to $96,085 family net income, RRSP contribution won’t impact non-subsidized child care tax credit in 2017.

You could consider keeping some RRSP contribution for 2018 to stay in 60% reimbursement bracket (unfer around $96-97k family net income)

Note: this quick calculation does not take into account the quebec tax shield
http://www.revenuquebec.ca/en/citoyen/d ... ne460.aspx

Numbers for 2018
http://www.revenuquebec.ca/en/citoyen/c ... areme.aspx




2) 2018 $8 place cost (one year delay since they use prior-year family net income

I have less experience with this, since my kid has a non-subsidized place.



Note: this is not tax advice. I have no idea what I am talking about, it’s numbers and links fyi only, etc etc.
Newbie
Aug 2, 2013
5 posts
3 upvotes
I just have a question regarding non-resident taxation. Appreciate any help in advance!

If I break tax residency with Canada and set up tax residency in a country that has territorial tax regime, meaning foreign income is not taxed at all, and I work remotely as a subcontractor in the above-mentioned country for a company operating in Canada, would I be required to pay income taxes, social security etc. in Canada. I looked up on CRA's website, employment income is not listed on the common types of Canadian income subject to taxation. (https://www.canada.ca/en/revenue-agency ... anada.html)
Deal Fanatic
User avatar
Apr 29, 2008
5928 posts
1623 upvotes
Montreal
taeyang987 wrote:
Jan 5th, 2018 11:26 am
Does anyone know?
No extra fees or taxes, it's disclosure only, but there are penalties if you don't file Form T1135.

https://www.canada.ca/en/revenue-agency ... t1135.html

$100,000 threshold based on adjusted cost base of the asset in Canadian currency.

Where do you hold your US stocks? non-registered account (taxable account ) ?

http://www.advisor.ca/tax/tax-news/unde ... 135-151683

SPECIFIED FOREIGN PROPERTY (SFP) does not include foreign property held within registered plans like RRSPs, LIFs, RRIFs, LIRAs, TFSAs, RESPs and RDSPs.


The amounts that have to be reported are the highest fair market value during the year.
This amount may be based on the highest month-end fair market value that appears on the investment statements.
The fair market value at the end of the year must also be reported on a country-by-country basis.

Amounts reported on the T1135 form are required to be determined in the applicable foreign currency, and then converted into Canadian dollars.

When in doubt, file the T1135. There are no penalties for filing it even if it is not required.


___

Note: this is not tax advice. I have no idea what I am talking about, links fyi only, etc etc.
Newbie
Jan 18, 2017
66 posts
43 upvotes
Like always, it depends. Mostly it depends on how you are set up as a "subcontractor" (ie. foreign corporation, individual, etc.) There may or may not be withholding taxes on the payments, depending on the classification of where the services you provide are rendered (In Canada vs. foreign.)

Long story short, if the services are deemed to be in Canada = withholding tax. If not, then no problem.

This is a very Coles Notes explanation, and there are a bunch of other "gotcha's" with these types of things, but it should give you a start.
gabrielzeng wrote:
Jan 4th, 2018 11:41 pm
I just have a question regarding non-resident taxation. Appreciate any help in advance!

If I break tax residency with Canada and set up tax residency in a country that has territorial tax regime, meaning foreign income is not taxed at all, and I work remotely as a subcontractor in the above-mentioned country for a company operating in Canada, would I be required to pay income taxes, social security etc. in Canada. I looked up on CRA's website, employment income is not listed on the common types of Canadian income subject to taxation. (https://www.canada.ca/en/revenue-agency ... anada.html)
______
Canadian & US tax guy

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