Personal Finance

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

  • Last Updated:
  • May 13th, 2018 12:33 pm
Sr. Member
Nov 13, 2006
569 posts
296 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?
Yes, when making the entry in the accounting software debit the bank and credit other income...

or

if you sold it for cash just keep the cash in your pocket and do not make any entries in your accounting program.
Deal Addict
Feb 16, 2014
1513 posts
127 upvotes
Hamilton
I hate the idea of putting my money into RRSP and only get 1 -2% and it sits there. How would I deduct the interest based on my rental earned income? My tenant just pays me every month and I still pay the mortgage from my account.

Is there any other option to avoid paying taxes? I'm looking at anywhere between 3-7k.
Member
May 7, 2017
347 posts
154 upvotes
If I contribute 10,000 in RRSP I get back an additional $2800, my dad is against me in doing this as my “money” is locked.

My argument is I’m buying a home in the next few years and the funds are just sitting in my account.

I have 15K saved up

Also unemployed for a year odd jobs here and there but getting back in the work force this year when I come back from South Africa.

What should I do
Deal Addict
Jan 2, 2015
1217 posts
312 upvotes
Toronto, ON
BeanFinn wrote:
Feb 1st, 2018 9:24 am
If I contribute 10,000 in RRSP I get back an additional $2800, my dad is against me in doing this as my “money” is locked.

My argument is I’m buying a home in the next few years and the funds are just sitting in my account.

I have 15K saved up
Your money is not "locked". You can decide what type of investments you want within your RRSP (whether it's a simple savings account, or stocks, or whatever). You can withdraw that money under the Homebuyers Plan, for up to $25,000, tax-free. Yes, you'll need to pay it back (over 15 years, interest-free), but it helps you build up a down payment.
Also unemployed for a year odd jobs here and there but getting back in the work force this year when I come back from South Africa.

What should I do
If you have a low income year, you could withdraw from your RRSPs, because the taxes paid on the withdrawal will be low. However, I wouldn't do that if possible, since you're saving up for a house. (Obviously you can't be unemployed for a long term while also saving for a house; if that's the case you have to withdraw to live.)
Jr. Member
Aug 29, 2011
193 posts
146 upvotes
GTA
tester85 wrote:
Feb 1st, 2018 9:16 am
I hate the idea of putting my money into RRSP and only get 1 -2% and it sits there. How would I deduct the interest based on my rental earned income? My tenant just pays me every month and I still pay the mortgage from my account.

Is there any other option to avoid paying taxes? I'm looking at anywhere between 3-7k.
RRSP - If you assume some risk you will get better % return. Such as the stock market.
You deduct rental expenses on CRA form T776. Mortgage interest, property taxes, utilities are the big ones. Any rental income in excess of your expenses becomes part of your net income for tax purposes.
The Duke
Member
May 3, 2016
313 posts
19 upvotes
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.
Since accidental and life insurance are not deductible as medical expense, why hospitalization insurance (e.g. where I'd pick a higher grade room to stay at the hospital instead of the one covered by MSP) is? My family members are arguing that they (accidental/life/hospitalization insurance) are of the same nature, where payouts for claims will be tax free. Kindly if you can provide a link reference? I can't find any specific on the internet myself. Thanks!

Note: the insurance premium is 100% paid from my own pocket, not covered by my employer.
Deal Fanatic
User avatar
Nov 19, 2004
7640 posts
1167 upvotes
Cambridge, ON
wyho007 wrote:
Feb 2nd, 2018 6:17 pm
Since accidental and life insurance are not deductible as medical expense, why hospitalization insurance (e.g. where I'd pick a higher grade room to stay at the hospital instead of the one covered by MSP) is? My family members are arguing that they (accidental/life/hospitalization insurance) are of the same nature, where payouts for claims will be tax free. Kindly if you can provide a link reference? I can't find any specific on the internet myself. Thanks!

Note: the insurance premium is 100% paid from my own pocket, not covered by my employer.
Health premiums are a medical expense. Life insurance, accident and disability premiums are not. Health insurance premiums are only deductible if you pay them, not your employer. And only if the premiums can be separated from any life or disability portion.

The CRA lists eligible medical expenses.
https://www.canada.ca/en/revenue-agency ... #mdcl_xpns
Jr. Member
Aug 29, 2011
193 posts
146 upvotes
GTA
wyho007 wrote:
Feb 2nd, 2018 6:17 pm
Since accidental and life insurance are not deductible as medical expense, why hospitalization insurance (e.g. where I'd pick a higher grade room to stay at the hospital instead of the one covered by MSP) is? My family members are arguing that they (accidental/life/hospitalization insurance) are of the same nature, where payouts for claims will be tax free. Kindly if you can provide a link reference? I can't find any specific on the internet myself. Thanks!

Note: the insurance premium is 100% paid from my own pocket, not covered by my employer.
Accident and life insurance insure you against an accident or death paying out a lump sum to spend as you wish tax free. Health insurance reimburses you for medical expenses incurred out of your own pocket. CRA allows a medical expense credit under Subsection 118.2(1) of the Income Tax Act. There you will find the specific items you are allowed to claim. Accident and Life insurance are not listed.
The Duke
Newbie
Apr 14, 2006
34 posts
8 upvotes
St Johns
Hi, I have a question. I was offered a full time position with an US company, I would continue living in Canada (so would my family), I would have to travel.
I understand that I'd have to pay income taxes in both countries but get a tax credit from the US (Can/US treaty).
Assuming I'd make the same $ amount (say $100k/year) in either country, given the taxes, would I be better off ($) getting paid in USD?
Member
User avatar
Jan 21, 2017
291 posts
55 upvotes
Don't know if this is mentioned. Is there a comprehensive excel spreadsheet that has all the key metrics you need for tax planning? (ie, employer income, rental income, RRSP contributions etc)

Also, does anyone have recommendations for any credible tutorial on tax management? (ie, what can be used as deductible, what forms are what etc)

Thanks all.

Tax noob here.
Sr. Member
Oct 14, 2012
559 posts
275 upvotes
Woodstock
@SPR2017 have you read through the General Income Tax and Benefit Guide
https://www.canada.ca/en/revenue-agency ... ckage.html

If not, it's where you should start to get an overview.
If so, please let us know in case someone knows where you should read up next. (There are several good books at most public libraries on Canadian taxes but I don't have one to recommend.)
Jr. Member
Aug 29, 2011
193 posts
146 upvotes
GTA
DPR2017 wrote:
Feb 5th, 2018 10:08 am
Also, does anyone have recommendations for any credible tutorial on tax management? (ie, what can be used as deductible, what forms are what etc)
I would recommend this reference book by CCH for a good understanding of Canadian Individual income tax. ‘Preparing Your Income Tax Returns’.

http://www.cch.ca/tax/prep2008/index.aspx?tid=34

Most tax professionals will have this as a resource. It is written in easy to understand language with examples and forms.
The Duke
Member
User avatar
Jan 21, 2017
291 posts
55 upvotes
garytheduke wrote:
Feb 5th, 2018 3:52 pm
I would recommend this reference book by CCH for a good understanding of Canadian Individual income tax. ‘Preparing Your Income Tax Returns’.

http://www.cch.ca/tax/prep2008/index.aspx?tid=34

Most tax professionals will have this as a resource. It is written in easy to understand language with examples and forms.
damn. pretty hefty price tag. what about this?

https://www.udemy.com/preparing-canadia ... tube_promo
Newbie
Dec 24, 2017
4 posts
Vancouver
Question. I did not receive some of the cheques over the years due to moving etc. How far back can I request to see if CRA would re-issue refunds, GST etc cheques?
Member
Sep 20, 2006
221 posts
54 upvotes
lazylazybum wrote:
Jan 29th, 2018 9:06 pm
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...
The rental schedule can have a negative number. This was my situation for many years with a managed property that had negative cash flow after all costs were paid. The investment remains eligible as long as there is a reasonable prospect of earning money from it, even if you do not earn a positive return for some period of time.

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