Archives: FAQs

Have the CPP and EI max thresholds changed for 2014?

The maximum CPP contribution for 2014 is $2,425.50 for employee contribution and $4,851.00 for self-employed contribution. The maximum EI contribution to the plan for 2014 is $913.68.

Will I have to report any taxable benefit on the personal tax return for exercising employee stock options at a private corporation?

Generally, in the year the employee stock options are exercised, a taxable employment benefit equal to the difference between the exercise price and the fair market value of the stock on the date of the exercise has to be reported as income on the personal tax return. If shares of a Canadian-controlled private corporation (CCPC)are … Continue reading Will I have to report any taxable benefit on the personal tax return for exercising employee stock options at a private corporation?

How do I set up a non-resident account number?

You will need to set up an NR account number if you’ve never remitted non-resident income tax deductions. You can do this by contacting the CRA at 1-855-284-5946. The CRA can set it up over the phone and also tell you how to remit your deductions.  

What is the tax deadline for U.S. Personal Tax Return?

By default, the U.S. personal tax return is due by April 15 of the following year. However, if on April 15 you live and work outside the U.S., your deadline is extended to June 15. Whether your deadline is April 15 or June 15, if you require additional time to file, you can submit Form … Continue reading What is the tax deadline for U.S. Personal Tax Return?

Can I automatically claim the family caregiver amount if I claim the caregiver amount?

Claiming the caregiver amount does not necessarily mean that you can claim the family caregiver amount as well. The family caregiver amount can only be claimed if the person you took care of has mental and/or physical impairment(s).

If a company is willing to pay money per month for an annual membership (fitness club, golf) again, is there a way to structure it not as just an expense of the company?

If a company is willing to pay money per month for an annual membership, both golf dues and sports clubs dues paid by your employer will be considered as a taxable benefit to you, unless you can establish that the dues paid were primarily for the advantage of the employer. This is a sticky area … Continue reading If a company is willing to pay money per month for an annual membership (fitness club, golf) again, is there a way to structure it not as just an expense of the company?

If a company leases a car for me, is it a taxable benefit? Is there a way for me to have my company simply pay for it?

Yes, there is a taxable benefit to you should your employer lease a car for you. These benefits are knows as the stand-by-charge and the operating cost benefit. The stand-by-charge means that you derive a benefit simply because the leased car is available for your use. The operating benefit is calculated based on the personal … Continue reading If a company leases a car for me, is it a taxable benefit? Is there a way for me to have my company simply pay for it?

I just bought a new house with the closing today, but my current house will be sold soon. How can I maximize deductions?

The CRA provides taxpayers with tax relief in this situation by way of the principal residence exemption. When you own two homes in a year the year or subsequent year, you can elect to have both of those homes treated as your principal residence in those years. This is because the principal residence contains ” … Continue reading I just bought a new house with the closing today, but my current house will be sold soon. How can I maximize deductions?

I collected HST but didn’t register for an HST number on time, what should I do?

The CRA can only back-date your HST registration by 30 days. In order to request a registration date that is past 30 days, you should write a letter to the CRA detailing your reason for requesting such an old registration date. In addition, the CRA requires that you provide 5-6 invoices around the back dated … Continue reading I collected HST but didn’t register for an HST number on time, what should I do?

What is a reasonable management fee?

Management fees are paid to the managers of a business for management services performed. Only reasonable management fees paid can be deducted as an expense. However, the Canada Revenue Agency has not explicitly stated what a reasonable amount is to charge for a management fee. Generally speaking, a reasonable management fee should be equal to … Continue reading What is a reasonable management fee?

I earn some investment income, in addition to my employment income, can I deduct the tax preparation/accounting fees from them?

That depends largely on the amount of the investment income, in relation to the total income. If the investment income is a small amount compared to the total income, then it will difficult to argue for it. For example, if employment income is about $100,000 and investment income is about $70, then it will be … Continue reading I earn some investment income, in addition to my employment income, can I deduct the tax preparation/accounting fees from them?

Can I charge any interest rate for a spousal loan?

To avoid attribution rules, you should ensure the interest rate is greater than or equal to the prescribed interest rate set by the Canada Revenue Agency (CRA). The CRA adjusts the prescribed interest rate each quarter; you can find the appropriate interest rate here.  

What is a T1-OVP?

A T1-OVP is a form where you report the contributions you made to your RRSP account, and disclose the deduction limit that you had. You are required to complete the T1-OVP when you contribute more than your deduction limit. The T1-OVP shows you how much you will have to pay in tax. The penalty for … Continue reading What is a T1-OVP?

I want to perform bookkeeping for my small business. What do you recommend me to use?

Answer: Wave Accounting is a free online-based accounting software that is available to all. It is simple to use and is aimed at small business owners. You can register here.  

Should I use Wave Accounting for my bookkeeping needs?

If you’re an independent contractor, IT consultant, or small business owner, then Wave Accounting is sufficient for your needs. It’s able to generate all of the financial reports required by your accountant and has the necessary tax codes such as HST. If you have multiple employees, a large customer base, or a lot of vendors, … Continue reading Should I use Wave Accounting for my bookkeeping needs?
wpChatIcon

Pin It on Pinterest