FAQs Archive

What do I do if I need to make changes on my personal tax return?

There are two options, you can either do it online or by mail. Online: You must register “MY ACCOUNT” with the CRA on their website first, then you need to select “CHANGE MY RETURN” option and submit any changes. By Mail: If you prefer to do it by mail, you will need to complete form T1-ADJ and … Continue reading

I am a non-resident of Canada for tax purposes, what are my options and consequences in regards to RRSP Withdrawal?

Question I am a Non-resident of Canada for tax purposes, what are my options and consequences in regards to RRSP withdrawal? Answer: You have the following options: You can withdraw amount from time to time (this is subject to part 13 withholding tax of 25%). OR You can withdraw a lump sum amount (you will … Continue reading

What do I do with my information and slips (that I used to prepare my income tax return) when I filed my return electronically?

If you e-filed your personal tax return, you don’t need to send CRA all your documentation, receipts or any slips. However, according to CRA, you MUST keep all these receipts for SIX YEARS in case they are being requested. In case that happens, you would have to mail the requested slips to the CRA.

Can I claim EI if I am self-employed?

It is very important that to point out that self-employed contractors are NOT eligible for general EI benefits. If you are unemployed, you will not receive EI. If you were fully self-employed (had no insurable earnings coming in from a job) during the year, there is a “Special EI Contribution” Program for which you are eligible. … Continue reading

If I am an employee working overseas, can I contribute into CPP?

CPP is simply payable on Canadian earnings. Contributions are based upon the amount of Income earned here in Canada. If you are an employee working abroad, voluntarily based CCP contributions can be made if Canada has a Social Security agreement with the other country. The following conditions must be met: Employee is a resident of … Continue reading

Is it possible to merge two corporations tax free?

In order for two corporations to merge their businesses tax free, in Canada, the following conditions must be met before the merger: All of the corporations must be Canadian corporations. However, this does not mean that they nessecarily have to be CCPC, they only have to be considered to carry on active business in Canada. … Continue reading

How do I deduct work-in-home expenses under my corporation?

It’s very common for some small businesses to fully operate out of a room in the house. If you operate as sole-proprietor you can deduct eligible work in home expenses on your personal tax return (T1). If you’re operating as corporation you can charge it as rent expense, which will reduce your corporation’s taxable income and … Continue reading

How do I report income earned from a business I operated?

Question: I am a full-time employee of ABC Corporation, but I also earned some income from a separate business I operated this year. How do I report this income? (My business is a sole proprietorship). Answer: As you would include your employment income on your personal tax return, you will also need to do so … Continue reading

As a corporation, how does our low salary and high dividend influence our ability to collect CPP?

The CPP Retirement Fund is based on how much and for how long you contribute to the pension plan. When you pay yourself a low salary and a high dividend, it reduces the CPP payout when you retire. However, you will still be entitled to CPP benefits based on the CPP contributions you have made … Continue reading

What happens if I over contribute to my RRSP savings account?

An over-contribution of $2,000 to your RRSP is allowed. Anything beyond this amount is subject to at a penalty of 1% per month for the months during which the over contribution remains in your RRSP until withdrawal, or until your excess amount is rolled over into the new RRSP deduction limit for the following year. … Continue reading

What happens if you take out your US Retirement savings after moving to Canada?

Under Canada and US tax rules, funds withdrawn from an IRA or 401K are taxed as income in year of withdrawal. The amount withdrawn must be included as income on your Canadian tax return. However, you can claim a a tax deduction for the entire amount of the withdrawal, if all amounts are transferred to … Continue reading

Can I write-off my computer as a business expense if I paid for it personally?

Question I need a new computer, and am going to buy a laptop at some point in the near future. I believe it is appropriate to write this off 100% as a business expense, since the computer will primarily be used in support of business purposes. Is it okay to purchase the computer using my … Continue reading

Can I deduct golf dues and memberships as a business expense?

Generally speaking, golf dues and related memberships paid are not deductible for tax purposes. There is 1 major exception: A deduction is allowed if you are an incorporated professional sports agent. The CRA ruling in regards to this is as follows: If you can PROVE to the CRA that the primary beneficiary of the incurred golf … Continue reading

What is shared child custody?

Child custody, if shared (for children under 18), has to be 50% for each spouse. Ontario Family law outlines that each parent cannot hold less than 40% custody, and no more than 60% custody for a child if custody is “Shared”.

How are child support payments calculated?

Both parents, if they will have shared custody, will share the costs of child support. This includes childcare, education, medical/dental, healthcare, and any other general expenses as well. The amount of Child Support is determined by each parent’s Income on the T1 (Personal Tax Return). This amount can simply be looked up on the followingFederal … Continue reading

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