Personal Tax Archives

I purchased a computer for employment purposes. As an employee, can I deduct this as employment expense?

In order to claim employment expenses incurred to earn employment income, you need to request a signed T2200 from your employer. However, the CRA has specifically mentioned that if you buy a computer or other capital assets, you cannot deduct this cost. Further, you cannot capitalize and depreciate (claim CCA) on capital purchases.

Am I required to pay tax on the Canada Child Tax Benefit received?

The Canada Child Tax benefit, which is provided in order to support those eligible with expenses of rearing children below the age of eighteen, is non-taxable. This means no tax is required to be paid on receipt of this benefit.

Who is eligible to receive the Canada Child Tax Benefit?

According to the CRA, in order for an individual to be qualified to receive the Canada Child Tax Benefit, all the criteria listed below must be met: Child has to be below eighteen years of age; Individual has to reside with the child , be the primary caretaker of the child, and be a Canadian … Continue reading

Can I claim the spousal/common-law partner amount?

You can only claim it if you were supporting your partner during the year and if the partner’s net income for the year is below $11,038 (2013). If you are also claiming the family caregiver amount, then the partner’s net income has to be below $13,078 (2013). If you and your partner ended your relationship … Continue reading

In the event of a divorce, which spouse gets to claim the eligible dependent credit?

You can claim this credit if you lived with your child (under 18 years of age) in a home that you owned or rented. You cannot claim this amount for a person who was only visiting you. Further, you must have supported your child and you must not have a spouse or common-law partner. For … Continue reading

Is an individual required to file a tax return in the year of their death?

Yes, an individual must report any income they earned from January 1st until the deceased date. This return is known as the “final return”. If any income is earned after the date of death, T3 Trust Income Tax and Information Return must be filed. The deadline for the final return is 30th April of the … Continue reading

I have filed my personal tax return. When can I expect a refund?

Assuming that a taxpayer has requested for his/her refund to be directly deposited to their bank account: If the return is paper filed: It will take approximately 3 – 6 weeks after the return is filed. If the return is electronically filed: It will take approximately 2 weeks after the return is filed. If the … Continue reading

In a shared custody situation, who gets to claim CCTB for the child?

In a shared custody situation, you will receive monthly CCTB (Canada Child Tax Benefit) payments equal to 50% (or actual portion of time spent with child) of the amount you would have received if the child resided with you on a full-time basis. The parent currently claiming the CCTB will have to send a letter … Continue reading

I have prepaid for a medical procedure that is not scheduled until next year. Can I still claim the medical expense for the prepayment this year?

Yes, medical expenses are claimed in the year in which the payment was made and not when the actual procedure happens. So for example, you paid for your January 2014 operation in December 2013, you will be able to claim the medical expense on your 2013 tax return.

Can I opt out of making CPP contributions?

Unfortunately, it is not possible to opt out of making CPP contributions, unless you are within the age bracket of 65 to 70. In that case, you have a choice to pay or stop paying CPP contributions. Form CPT30, Election to Stop Contributing to the Canada Pension Plan or Revocation of a Prior Election, must … Continue reading

Should I contribute to RRSP or TFSA?

RRSPs allow you to build wealth by deferring gains and income (and taxes) on investments until the funds are withdrawn or your RRSP is closed (age 72). This means you will save taxes when you contribute to your RRSP, but you will pay taxes at withdrawal. Ideally, funds contributed to RRSPs should not be touched … Continue reading

My bank won’t approve a mortgage to my corporation for the purchase of an investment property. Can I use a bare trust?

Bare trusts are often used in financing transactions. Real estate investors prefer to purchase properties in the name of their corporation for tax reasons. Therefore, consider using a bare trust if your bank won’t loan money to your corporation, but is willing to provide you with a personal mortgage for the purchase of an investment … Continue reading

What is the minimum tax carryover?

If alternative minimum tax was paid by you in any of the past seven tax years (ex. 2006-2012), and no minimum tax is required to be paid for the 2013 tax year, you will be eligible to claim credits in 2013 for all the minimum tax paid between 2006-2012 in order to reduce your taxes. … Continue reading

Can I add my spouse to my corporation, as a shareholder, for income splitting purposes?

Yes, you can add your spouse to your corporation, either as a preferred shareholder or common shareholder. Both types of shares, if structured properly, will allow you and your spouse to split the profits of the corporation through payment of dividends to each of you. A key difference between a common shareholder and preferred shareholder … Continue reading

On the Personal Income Tax Return, why does it ask me if I own a foreign property with a cost of more than $100,000 CDN during the year?

As a Canadian resident, the CRA requires you to file a information form T1135. If you hold or have held a specified foreign property with a cost of more than $100,000 at any time during the tax year. Completing this form does not generate additional Canadian tax liability but failure to file the form in time … Continue reading

Category: Personal Tax