Archives: FAQs

My corporation is inactive and I would like to dissolve it, what should I be aware of?

Take the following steps to dissolve your inactive corporation: Before you can dissolve your corporation you have to make sure any outstanding tax liabilities such as HST (sales tax), corporate income taxes and payroll taxes are all paid to the CRA as of the dissolution date. The related tax returns must also have been filed … Continue reading My corporation is inactive and I would like to dissolve it, what should I be aware of?

How are RRSPs taxed in the U.S.?

For U.S. Citizens or U.S. residents who hold a Canadian RRSP, it should be noted that the IRS treats the RRSP just like any other investment account and therefore, imposes tax annually on the growth of the investments inside the RRSP. However, an election can be made by completing the Form 8891 annually with your … Continue reading How are RRSPs taxed in the U.S.?

How are IRAs and Roth IRAs taxed in Canada?

This is a significant concern for U.S. citizens or green card holders who are also residents of Canada and therefore, must file tax returns in both countries. IRA An IRA has very similar characteristics to that of a Canadian RRSP – contributions are tax deductible, growth is tax free, and the withdrawals are taxed. However, … Continue reading How are IRAs and Roth IRAs taxed in Canada?

Who is required to complete the “Report of Foreign Bank and Financial Accounts (FBAR)” with the IRS?

Every U.S. Citizen, regardless of whether they live in the U.S. or not are required to file a FBAR Form to the IRS on an annual basis if the total value of the following foreign financial accounts exceed $10,000 at any time during the year: Bank Accounts RRSP/RESP/TFSA Brokerage account held for trading stocks and … Continue reading Who is required to complete the “Report of Foreign Bank and Financial Accounts (FBAR)” with the IRS?

Do I have to issue myself a T5 Slip if I took dividends from my company?

Question:

If an employer is provided with travel allowance, is it a taxable benefit to an employee?

Question: I have employees that are driving frequently due to the nature of their work. If I provide them with a car allowance, is it a taxable benefit to them? Answer: As a corporation, you can pay them a flat allowance, but then it would be part of their regular payroll. The employee would then … Continue reading If an employer is provided with travel allowance, is it a taxable benefit to an employee?

I’m not sure I will be able to get my T4 slip on time to file my 2012 tax return, what can I do?

If you haven’t received a T4 slip from your employer make sure you request it from them as soon as possible. However, there are cases where you will not be able to get your T4 slip from your employer in time to file your personal tax return. In this case, if you know that you … Continue reading I’m not sure I will be able to get my T4 slip on time to file my 2012 tax return, what can I do?

Do I have to include a taxable benefit in my income for a company provided car?

Question: My corporation owns a vehicle and its available for me to use. Are there any tax implications? Answer: When a corporation owns a vehicle and provides it to an employee’s for usage, the personal KM’s driven are considered a taxable benefit. Therefore, when you file the employee’s T4 slip a standby charge and operating … Continue reading Do I have to include a taxable benefit in my income for a company provided car?

As a corporation, when do I have to issue a T4 slip to my employees?

You must issue a T4 slip to your employees if any of the following remuneration was paid: salary, wages, tips, bonus, vacation pay, employment commission taxable benefit or allowances retiring allowance deductions you withheld during the year pension adjustment (PA) amounts for employees who accrued a benefit for the year under your RPP (registered pension … Continue reading As a corporation, when do I have to issue a T4 slip to my employees?

Can I reduce my Canadian taxes for foreign taxes paid on foreign employment income?

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Should I wait to pay my tax balances if I filed a taxpayer relief form?

Question: If I am late-filing a tax return due to an external factor and I did file a taxpayer relief form to explain the situation, should I pay my tax balances owing now or wait till the CRA to process my form? Answer:Well, you do have a choice to defer you payment. However, this will … Continue reading Should I wait to pay my tax balances if I filed a taxpayer relief form?

As a Canadian, do I have to file a US tax return for online sales made to the US?

Question: I operate an online business in Canada, as a sole proprietor, which sells goods in the US. What are my US tax filing obligations? Answer: As a Non-Resident alien earning self employment income in the US, you are required to file a US non-resident personal tax return, 1040NR. You must also file Schedule C … Continue reading As a Canadian, do I have to file a US tax return for online sales made to the US?

I have Stock options. What are the tax implications?

This topic can get complex. Therefore, it is highly advised to consult a tax professional. There are three possible scenarios with respect to stock options for tax purposes: On the grant date the exercise price is less than the market value of the shares (i.e. in the money). At exercise date, the difference between the … Continue reading I have Stock options. What are the tax implications?

I moved to the US and became a non-resident of Canada. What happens to my RRSP contributions?

There are a variety of factors you need to consider including your current year salary and your future plans in terms of returning to Canada. For example, if you had high income the year you left, you may still want to make an RRSP contribution in order to reduce your taxes owing. Withdrawing your RRSP … Continue reading I moved to the US and became a non-resident of Canada. What happens to my RRSP contributions?

I just sold a rental property that was held within a corporation. What are the tax implications?

When rental property is held within a corporation, the capital gains rules are slightly different. Similar to an individual holding a property, only 50% of the capital gain is taxable. The taxable portion of the capital gain is taxed at a corporate tax rate of approximately 46%. When dividends are paid by the corporation to … Continue reading I just sold a rental property that was held within a corporation. What are the tax implications?
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