Archives: FAQs

I didn’t register for WSIB even though it was compulsory. What should I do?

You can make a voluntary disclosure on the WSIB website.  By registering voluntarily, you will only have to make payment for WSIB premiums for the current year and the prior year. Interest and penalties will not be levied.  If you get caught for non-registration, then you could end up paying huge amounts in penalties, interest, … Continue reading I didn’t register for WSIB even though it was compulsory. What should I do?

I am a Canadian resident and have some funds in a U.S. 401K. What is the most tax efficient way of bringing these monies into Canada?

The most tax efficient method is to transfer these funds to your RRSP. Unfortunately, you cannot directly transfer your 401K to your RRSP. This transfer can be completed as follows: Open a Rollover Individual Retirement Account (IRA) account with an investment firm capable of cross border investment management. Rollover the 401k to an IRA. Withdraw … Continue reading I am a Canadian resident and have some funds in a U.S. 401K. What is the most tax efficient way of bringing these monies into Canada?

Can a non-resident who owns a Canadian rental property choose a tenant to act as his agent in Canada?

No, a tenant who is renting the property (i.e. the payer) cannot act as the agent. A professional rental agent (e.g. property manager) or a family member/friend can be chosen to perform the responsibilities of the agent as long as the individual is a Canadian resident.

I have a vacation property outside Canada and it is never rented out. The cost is greater than $100,000 CAD. Do I have file form T1135 with my personal tax return for this property?

No, as long as the property is solely used personally, it is not required to be reported on T1135.

What are the tax implications of my corporation paying critical illness premiums for me? What if I pay them personally?

Critical illness (CI) does not have specific mention in the Income Tax Act. It depends on the exact circumstances whether a CI policy resembles more to a life insurance or a sickness/accident insurance.  CI premiums paid by the corporation are not deductible. When the policy value is paid to the corporation on diagnosis of a … Continue reading What are the tax implications of my corporation paying critical illness premiums for me? What if I pay them personally?

What is the benefit of registering for GST/HST voluntarily?

The main benefit is that you can claim input tax credits (ITC) for the amount of GST/HST you paid on business expenses. For example, if you purchase materials from a vendor in the course of business, the government will provide you with credit for the amount of GST/HST you paid on the purchase. Therefore, any … Continue reading What is the benefit of registering for GST/HST voluntarily?

Do I or my children need to be Permanent Residents of Canada for me to open an RESP account and contribute?

In order to open an RESP account, the subscriber and the beneficiaries (children) do not need to be Permanent Residents of Canada. However, the beneficiary is required to be a Canadian resident for tax purposes and have a valid SIN. For more information on residency status, please visit CRA page on Residency status If you … Continue reading Do I or my children need to be Permanent Residents of Canada for me to open an RESP account and contribute?

Do I have to report my income from hobby sales?

According to the Canada Revenue Agency (CRA), hobby income must be reported on your tax return if it generates a profit (revenue in excess of expenses). In the eyes of the CRA, this is a strong indication that the hobby is a venture with an expectation of profit. If, however, the hobby results in a … Continue reading Do I have to report my income from hobby sales?

What is the role of an Ontario agent appointed by a Foreign corporation?

If you are a foreign corporation (i.e US LLC or US C-Corp.) carrying on business in Ontario, then you’ll need to appoint an agent in Ontario of your foreign corporation. This will allow you to apply for the extra provincial license required to carry on business in Ontario. The main role of the agent is … Continue reading What is the role of an Ontario agent appointed by a Foreign corporation?

Can I deduct interest paid on loans?

You can deduct interest incurred to earn investment income (dividends and interest) from investments such as bonds and stocks. However, interest incurred on non-investment loans or investments that generate only capital gains are not deductible. It makes sense to pay off loans giving rise to non-deductible interest (i.e. mortgage on your principal residence) first and … Continue reading Can I deduct interest paid on loans?

Who can claim the Overseas Employment Tax Credit?

In order to claim the Overseas Employment Tax Credit, individuals are required to be a Canadian resident or deemed resident at any time in the year AND earn employment income from performing at least 90% of the work outside of Canada for more than six consecutive months with a specified employer. As well, the employment … Continue reading Who can claim the Overseas Employment Tax Credit?

How does the Home Buyers Plan repayment work?

You have to pay back the amount withdrawn from your RRSP under the HBP over 15 years beginning the second year after the year of withdrawal. Each repayment is 1/15th of the total amount withdrawn. To make a repayment under the HBP, you must make contributions to your RRSPs in the year the repayment is … Continue reading How does the Home Buyers Plan repayment work?

Do U.S. Citizens who received a W2 slip for work done in Canada need to file a U.S. tax return?

As a Citizen of the U.S. you are required to file your worldwide income for the year. Since you earned the income in Canada, it is considered Canadian source income. As such, you will be eligible to either claim the Foreign Earned Income exclusion or Foreign Tax Credit (depending on which one lowers your tax … Continue reading Do U.S. Citizens who received a W2 slip for work done in Canada need to file a U.S. tax return?

What happens if I over contribute to my RRSP?

You have excess RRSP contributions if the total of: Your unused contributions from prior years, Your current year contributions, and $2000 is more than your RRSP deduction limit shown on your latest Notice of Assessment. You have to pay a tax of 1% per month on your excess contributions for every month that the contributions … Continue reading What happens if I over contribute to my RRSP?

Do I have to pay tax on capital gains on the sale of my home?

When a principal residence is sold, the gain is not taxable if it has been the person’s principal residence for the whole time it has been owned. There is a principal residence exemption that eliminates the gain. Also, if the property was your principal residence the whole time it was owned you do not need … Continue reading Do I have to pay tax on capital gains on the sale of my home?
wpChatIcon
wpChatIcon

Pin It on Pinterest