Personal Finance

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

  • Last Updated:
  • Sep 11th, 2018 12:40 pm
Jr. Member
Aug 29, 2011
193 posts
146 upvotes
GTA
sw6lee wrote:
Jan 20th, 2018 8:18 pm
About the real estate commission fee, actually the house wasnt under my name. It was my parents name. But When moving for my job in this province I currently reside, I paid for the moving expense.

I guess there is no seperate real estate commission fee tax refund that my patent can use, right? Its just part of the moving expense tax refund program?
If your parents moved with you for employment in the new location than they may have a moving expense claim as well. This would be deducted against their income earned in the new location. The claim can also be carried forward to future years if not all deducted in the current year.
The Duke
Deal Addict
Aug 30, 2011
2969 posts
751 upvotes
Ottawa
sw6lee wrote:
Jan 20th, 2018 8:18 pm
Aha I didnt know about that rule. So you get refund of your tax bracket amount. Thanks for letting me know!

About the real estate commission fee, actually the house wasnt under my name. It was my parents name. But When moving for my job in this province I currently reside, I paid for the moving expense.

I guess there is no seperate real estate commission fee tax refund that my patent can use, right? Its just part of the moving expense tax refund program?

Thanks a lot.

Edit: made it more clear.
Why did your parents sell? Did they also move for work, or just downsizing?
Member
User avatar
Dec 11, 2009
211 posts
20 upvotes
hamilton
Hi James, and thank you for your offer.

For +10 years, i qualified for the Disability Tax Credit (mental illness). In 2012 I was asked to resubmit documentation, and asked again in 2017. In 2017 I no longer met the criteria for the tax credit because my condition does not affect me 90% of the time. Now they want to audit my entitlement back to 2010.

It appears that they accepted my documentation in 2012. Did the criteria for entitlement change between 2012 and 2017?

Can you suggest a best practice way of challenging this audit?

Thank you for your kind consideration.
Member
Mar 2, 2011
241 posts
32 upvotes
Toronto
Got an important question

If I am living on capital gains with no other income stream, do I still fall under capital gains tax laws or it all becomes my primary income?
Newbie
Jan 12, 2017
80 posts
53 upvotes
vancouver
My rental property is sold and transfer to new owners March 2018. Tenants moved out Dec 2017. If I dont rent out the unit for next few months, can I claim mortgage (interest portion) against my income tax? If yes, my rental schedule will be negative number...
Member
May 3, 2016
321 posts
20 upvotes
Is hospitalization insurance plan tax deductible as medical expense?

I know accidental, life insurance are not.

Thanks!
Jr. Member
Aug 29, 2011
193 posts
146 upvotes
GTA
wyho007 wrote:
Jan 29th, 2018 9:54 pm
Is hospitalization insurance plan tax deductible as medical expense?

I know accidental, life insurance are not.

Thanks!
Yes premiums to a health or dental insurance plan are considered medical expenses for Income Tax purposes. All your medical expenses must exceed 3% of your net income in the year to be of benefit to you though.
The Duke
Member
Apr 11, 2011
292 posts
61 upvotes
Memramcook
garytheduke wrote:
Jan 30th, 2018 9:08 am
Yes premiums to a health or dental insurance plan are considered medical expenses for Income Tax purposes. All your medical expenses must exceed 3% of your net income in the year to be of benefit to you though.
Or your spouse's 3% net income. You can combine your medical expenses and whoever has the lowest income can claim them.
Deal Addict
User avatar
Mar 28, 2005
4368 posts
486 upvotes
Ontario / Quebec
I'm getting a retroactive lump sum payment covering all the years from 2011 to 2016.

I was mailed a Statement of Qualifying Retroactive Lump-Sum Payment (QRLSP) form to submit with my 2017 return.

Two questions:
1. The financial institution that provided that form stated that if I decide to submit the form with my 2017 income tax return, I cannot claim pension splitting on that return (which I have been doing in all previous years since Pension Splitting is permitted).
I have a hard time believing that is true (doesn't make any logical sense to me) especially since I could not find anything on the CRA website stating that.

2. As I understand it, the CRA uses some "magic" formula to determine how much income tax is to be paid on that retroactive lump sum payment - a formula apparently not available to anyone outside the CRA. So one essentially has to take their word for whatever they come up with as far as that income tax payment is concerned which seems to go against the concept that any taxation is supposed to be fair and transparent.
Is there any at least rule-of-thumb one could apply to see which is better - the tax payable using the "magic" algorithm that the CRA uses or just adding the lump-sum amount to my 2017 income and apply pension income splitting?

I suppose it all depends on the tax bracket one ends up in.
If the correct annual amount making up the lump-sum amount had been paid every year since 2011, I would have stayed in the same tax bracket as without that annual amount, but adding the whole lump-aum to my 2017 income will move me to the next higher tax bracket and an incrementally higher tax rate.

PS: All my income tax returns since 2011 have been done using U-File with filing on line - so I could with a bit of work go back and recalculate the income tax liability for each of those years adding in the extra amount shown for each year on that QRLSP form and see what that additional total tax liability would be vs. adding the whole lump-sum payment to 2017, but that apparently is not what CRA does so it's a bit of a moot point.

The other small issue is that if I decide to submit the QRLSP form. I cannot file electronically - I'm back having to file a stack of paper which is a pain after doing iut electronically for all those years.

Sorry that this post is a bit long - I just wanted to try to make things clear.
Deal Addict
User avatar
Dec 10, 2008
3891 posts
460 upvotes
Toronto
Small business tax Q

If I buy a $100 hammer in 2015 and expense it in full for that tax year, then I sell the hammer for $80 in 2017, how do I show that on my taxes? Just as a sale for $80?
Newbie
Dec 25, 2015
86 posts
38 upvotes
Brighton, ON
Person died on Jan 1, 2018. Must the final tax return be for 2018, or can it be for 2017 and forget about 2018.
Deal Addict
Apr 18, 2012
1232 posts
104 upvotes
RCGA wrote:
Jan 31st, 2018 9:03 am
Small business tax Q

If I buy a $100 hammer in 2015 and expense it in full for that tax year, then I sell the hammer for $80 in 2017, how do I show that on my taxes? Just as a sale for $80?
Bro, it’s $80 why you making your life so complicated?
Sr. Member
Apr 4, 2017
625 posts
90 upvotes
Toronto
I made an extra 15k this year by renting. I know i have to pay back when i file my tax return.

Can i just not put more money into mortgadge instead of RRSP to avoid paying that tax fee?
Deal Addict
Apr 18, 2012
1232 posts
104 upvotes
ysl5710 wrote:
Jan 31st, 2018 9:51 pm
I made an extra 15k this year by renting. I know i have to pay back when i file my tax return.

Can i just not put more money into mortgadge instead of RRSP to avoid paying that tax fee?
Dude, what are you talking about?? mortgage is not deductible. Only the mortgage interest. So paying more into ur mortgage would only reduce ur principal amount.. also if u rented ur basement, u can only deduct the interest and all related expense only to percentage allocated to ur basement. Not the ENTIRE amount
Member
Mar 13, 2012
326 posts
81 upvotes
Sarnia
willowberry wrote:
Jan 31st, 2018 11:52 am
Person died on Jan 1, 2018. Must the final tax return be for 2018, or can it be for 2017 and forget about 2018.
Not enough information to answer properly. i.e. Did the person have a spouse? Did the person have any financial assets, such as RRSP, RRIF, non-registered investments? Was the person collecting OAS or CPP? Did the person qualify for the CPP death benefit?

Generally, except in cases of spousal joint ownership or rollover, all assets are considered liquidated as of the date of death, which in this case would be 2018. So a "regular" tax return would have to be filed by April 30 2017 and the final return by April 30, 2019.

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