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Answer

Whose name should go on a property title?

For tax purposes, it makes sense to put the property under the name of the person with the lower income, since the higher the income the more taxes you pay. It’s beneficial to do this if the property is turning a profit, as a way to keep you paying the least amount of tax on … Continue reading Whose name should go on a property title?

Car leased under corporation

Thanks for your question. If the lease is in the company’s name, then the company should pay for all car expenses including insurance, repairs, lease payments, gas, toll charges and parking. You will have to switch the insurance to the company name. Allan Madan, CPA, CA

Freight Broker – Form 1099 required?

If the Canadian company is incorporated, then you need an EIN and form W8-BEN-E. As long as the foreign contractor is not a U.S. person and the services are wholly performed outside the U.S., then no Form 1099 is required and no withholding is required.

How do I teach my kids tax?

Hello. I always recommended starting as early as possible when it comes to teaching your kids about financial responsibility. The first thing I recommend doing is using tax season as a “teachable moment”. Though they will not pay taxes until they have their first job, even small children can understand the basic principle behind taxation. … Continue reading How do I teach my kids tax?

Been living in Canada for a few years, will giving up my citizenship work?

If you had ever lived in the United States, you must file a personal tax return for the year(s) that you resided in the U.S. If you renounce your citizenship it DOES NOT exempt you from having to file delinquent taxes. It has no influence on any financial or tax obligations towards the United States. … Continue reading Been living in Canada for a few years, will giving up my citizenship work?

Becoming self-employed with contract work

Hello Quentin, there are two factors you need to keep in mind when you want to become self-employed. The first is control factors and the second is economic factors. For control factors, you must prove that you have control over certain aspects of the services you provide. This means you must control when, where, and … Continue reading Becoming self-employed with contract work

Paying Salaries to Family Members

You can pay a reasonable salary to your 17 year old son for work performed. Your son should provide time sheets daily for your records, and an employment agreement should be entered into between you and your son. You still must register for HST, even if the services you are providing are zero-rated (i.e. 0% … Continue reading Paying Salaries to Family Members

Canadian working in the United States and making CPP contributions

Yes, you can voluntarily contribute to the Canada Pension Plan. Please complete form CPT20 http://www.cra-arc.gc.ca/E/pbg/tf/cpt20/cpt20-14e.pdf

How do I withdraw money from my corporation?

Hi Iqbal, You can either be paid salary as an employee of your corporation, or receive dividends as the corporation’s shareholder. To understand which method is better for you, please see http://madanca.com/blog/save-money-salaries-dividends-2014/ Thanks, Allan

TN worker working in US for possibly three years. Tax help?

Hi David, Before the issue with the GST/HST payments, I believe that it is important for you to establish whether you are a Canadian resident or non-resident for tax purposes. Usually, if you leave temporarily, you will still be considered resident of Canada and you will have to file Canadian tax return to report your … Continue reading TN worker working in US for possibly three years. Tax help?

How much tax on Self Employment Income?

Hello Cassandra, You should set aside $3,700 for income taxes and $2,500 for CPP premiums payable on self employment earnings. Hope this helps, Madan Team

Ex-spouse Income Information

Hello Kiran, You are required by the CRA to provide the net income of your ex-spouse to calculate the spousal amount on line 303 of your return. If no amount is entered, the return cannot be electronically filed. Thanks, Allan

What are the tax implications with respect to a dividend paid by a Canadian corporation to a US parent company?

Assuming that the ULC filed an election to be treated as a normal corporation as opposed to a flow-through entity, the dividends paid by the ULC to US Co. will be eligible for the treaty reduced withholding tax of 5% of gross dividends.The foreign dividends received by the US Co. will be eligible for a … Continue reading What are the tax implications with respect to a dividend paid by a Canadian corporation to a US parent company?

CCA on Rental Property?

Hello, Claiming CCA makes sense if your marginal tax rate today is likely the same or higher as it will be when you sell. This is because the CCA claimed (which is a tax deduction) today will be greater than the income inclusion (known as recapture) when the property is sold. A recapture of the … Continue reading CCA on Rental Property?

How do I find out the result of my appeal?

I’ve heard normally it can take about 6-12 months after you file an appeal for your case to be reviewed by an appeals officer. You can meet with the Appeals Officer and try to convince him or her of the correctness of your position, or you can make your case in writing. The procedure is … Continue reading How do I find out the result of my appeal?

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