Answers Archive

Re: Filing as Separated?

Hello, if you have separated from your common-law spouse, there is no issue filing as separated. If you are still considered common-law for tax purposes, you need to claim your status correctly. Then, you need to notify the CRA of your status. Even though you are both common-law, each of you still file your own … Continue reading

Re: Newcomer to Canada

Hello, and welcome to Canada! First of all, Canada is regulated by the Canada Revenue Agency, called the CRA. The deadline for filing personal taxes is April 30. If you do not owe any taxes, there are no penalties for late filing. If you do owe tax, the penalty is 5% plus 1% interest per … Continue reading

Re: Making Money in the US/Canada

Hello, If you have provided a product or service to a customer in the U.S., all you have to do is convert the money you received into Canadian funds. The CRA recommends that you use the Bank of Canada’s exchange rate that was in effect on the date you received the income. In terms of … Continue reading

Re: A question on dependents

Hello and thank you very much for your question. There are two primary tax credits your friend may be interested in. The first one is the dependent tax credit. Your friend appears to meet the criteria for this credit, as she is single and supports her parents who live in her home. Her parents also … Continue reading

Re: How much can I deduct for a home office?

Hello and thank you for your question. To be considered a home office, your work space must meet one or both of the following conditions. It must be your primary place of business. According to the CRA, this means the place where you do most of your business. It is used exclusively for earning income … Continue reading

Re: How much can I deduct for my vehicle?

The first thing you need to ask yourself is, “how much of the time will my vehicle be used for my business?” You calculate this by determining how much of your kilometers driven are used to earn income. Let’s assume your car is used 100% of the time for earning income. Because your automobile was … Continue reading

Re: Principal Residence and Capital Gains Tax

Moving into your rental property is a bad idea from a tax perspective. As soon as you move in, your rental property will be deemed to be disposed of at it’s fair market value. This will trigger a capital gain. The appreciation in your rental property after you move in will not be subject to … Continue reading

Re: Can I claim depreciation on my computer as an expense deduction?

If the computer is used more than 50% for business purposes, then the full amount can be recorded as a company asset. Depreciation at a rate of 55% is claimed annually on the full cost of the computer.

Re: What portion of my home office can I deduct as an expense on my personal tax return?

The deductible portion of home office expenses is equal to the size of the home office relative to the size of the home. This percentage is pro-rated for the number of hours used for business purposes. You have indicated that your home office space is 10% of the total home area. However, this percentage would … Continue reading

Can my corporation claim a deduction for rent expense payable to me?

Yes, the corporation can deduct rent expense payable to the shareholder. There should be an agreement between the shareholder and the corporation specifying how the rent is calculated and the payment terms. It is possible that the CRA could challenge the expense claim for unpaid rent under Section 67 of the Income Tax Act, which … Continue reading

Re: Non-Resident Status

Generally, a lease to a third party would have to be on arm’s length terms and conditions for a dwelling place located in Canada not to be considered a significant residential tie with Canada, as discussed in ¶1.12. However, in certain situations, particularly where the non-resident individual acquiring the dwelling place has never previously been … Continue reading

What is the filing date for a corporate return?

The Canada Revenue Agency says you must file your corporate income tax return within 6 months of the end of your tax year. Your corporation’s tax year is your fiscal period, which is your business year. It is unique for each corporation and does not follow the traditional January-December calendar year. However, from what you’ve … Continue reading

Re: Bitcoins – deductions for meals

I think the advent of digital currency itself is a very interesting phenomenon. It’s volatility puts a lot of people off but banks and credit card companies are beginning to take notice since it may potentially threaten the usage of credit cards. Merchants who use credit cards have to pay a 3% fee per transaction, … Continue reading

Re: RRSP for purchasing a house

The home buyers’ plan lets you withdraw $25,000 from your RRSP tax free and $50,000 if you have a spouse. The withdrawals will have to be paid back over the next 15 years. Also you must at least deposit 1/15 of the amount withdrawn from your RRSP annually in order to avoid paying taxes.

Re: Deferring Departure tax

I know that you can defer it by providing the CRA with security/collateral that is equal to the value of the expected deemed disposition.

Archives: Answers