Tag: Personal tax

Is an individual required to file a tax return in the year of their death?

Yes, an individual must report any income they earned from January 1st until the deceased date. This return is known as the “final return”. If any income is earned after the date of death, T3 Trust Income Tax and Information Return must be filed. The deadline for the final return is 30th April of the … Continue reading Is an individual required to file a tax return in the year of their death?

I have filed my personal tax return. When can I expect a refund?

Assuming that a taxpayer has requested for his/her refund to be directly deposited to their bank account: If the return is paper filed: It will take approximately 3 – 6 weeks after the return is filed. If the return is electronically filed: It will take approximately 2 weeks after the return is filed. If the … Continue reading I have filed my personal tax return. When can I expect a refund?

In a shared custody situation, who gets to claim CCTB for the child?

In a shared custody situation, you will receive monthly CCTB (Canada Child Tax Benefit) payments equal to 50% (or actual portion of time spent with child) of the amount you would have received if the child resided with you on a full-time basis. The parent currently claiming the CCTB will have to send a letter … Continue reading In a shared custody situation, who gets to claim CCTB for the child?

I have prepaid for a medical procedure that is not scheduled until next year. Can I still claim the medical expense for the prepayment this year?

Yes, medical expenses are claimed in the year in which the payment was made and not when the actual procedure happens. So for example, you paid for your January 2014 operation in December 2013, you will be able to claim the medical expense on your 2013 tax return.

Can I opt out of making CPP contributions?

Unfortunately, it is not possible to opt out of making CPP contributions, unless you are within the age bracket of 65 to 70. In that case, you have a choice to pay or stop paying CPP contributions. Form CPT30, Election to Stop Contributing to the Canada Pension Plan or Revocation of a Prior Election, must … Continue reading Can I opt out of making CPP contributions?

Should I contribute to RRSP or TFSA?

RRSPs allow you to build wealth by deferring gains and income (and taxes) on investments until the funds are withdrawn or your RRSP is closed (age 72). This means you will save taxes when you contribute to your RRSP, but you will pay taxes at withdrawal. Ideally, funds contributed to RRSPs should not be touched … Continue reading Should I contribute to RRSP or TFSA?

What is the minimum tax carryover?

If alternative minimum tax was paid by you in any of the past seven tax years (ex. 2006-2012), and no minimum tax is required to be paid for the 2013 tax year, you will be eligible to claim credits in 2013 for all the minimum tax paid between 2006-2012 in order to reduce your taxes. … Continue reading What is the minimum tax carryover?

Can I add my spouse to my corporation, as a shareholder, for income splitting purposes?

Yes, you can add your spouse to your corporation, either as a preferred shareholder or common shareholder. Both types of shares, if structured properly, will allow you and your spouse to split the profits of the corporation through payment of dividends to each of you. A key difference between a common shareholder and preferred shareholder … Continue reading Can I add my spouse to my corporation, as a shareholder, for income splitting purposes?

On the Personal Income Tax Return, why does it ask me if I own a foreign property with a cost of more than $100,000 CDN during the year?

As a Canadian resident, the CRA requires you to file a information form T1135. If you hold or have held a specified foreign property with a cost of more than $100,000 at any time during the tax year. Completing this form does not generate additional Canadian tax liability but failure to file the form in time … Continue reading On the Personal Income Tax Return, why does it ask me if I own a foreign property with a cost of more than $100,000 CDN during the year?

If my total income from all sources (including EI benefits for maternity) is high, am I required to repay some of the EI I received?

Generally, when your personal tax return is filed, if you received regular benefits and your net income is greater than $59,250, you may be required to pay 30% of either the total regular benefits received in the year or the excess amount of net income over $59,250, whichever is less. However, the EI repayments do … Continue reading If my total income from all sources (including EI benefits for maternity) is high, am I required to repay some of the EI I received?

Do I have to apply for the Child Tax Benefit and Universal Child Care Benefit?

Yes. You can apply by completing this form and mailing it to the appropriate CRA centre as noted on the instructions on the form.  

Does my company have to pay Employment Insurance Premiums (EI) for my spouse, if he/she works for my company?

The CRA’s general guideline is that if you hire a family member, EI premiums are not payable to the CRA. However, if the duties being performed by your family member and their working conditions are the same as if he/she was working for a third party employer (unrelated person), then the CRA will require you … Continue reading Does my company have to pay Employment Insurance Premiums (EI) for my spouse, if he/she works for my company?

I have taken money out of my RRSP under Home Buyer’s Plan (HBP) and the Lifelong Learning Plan (LLP) and I will be leaving Canada. What are the tax consequences?

If you emigrate from Canada (i.e. become non-resident of Canada for tax purposes), then the outstanding balance on your HBP or your LLP will be included in your taxable income for the year in which you leave Canada. To avoid this income inclusion, you must pay back the outstanding balance within 60 days from the … Continue reading I have taken money out of my RRSP under Home Buyer’s Plan (HBP) and the Lifelong Learning Plan (LLP) and I will be leaving Canada. What are the tax consequences?

Why does the CRA review/pre-assess individual tax returns and what do they usually look for?

The CRA will request further documentation, as part of their review, of some credits/deductions claimed on your personal tax return. This usually only applies to those returns that have been filed electronically. Some of the credits/deductions that draw some scrutiny from the CRA are items like medical expenses, donations, moving expenses, eligible dependant credit, child … Continue reading Why does the CRA review/pre-assess individual tax returns and what do they usually look for?

Can I deduct the life insurance premiums I pay on my tax return?

Life insurance premiums are usually not deductible for tax purposes. However, some exceptions do exist such as if the beneficiary is a registered charity or if the insured is requested by the bank to buy life insurance as collateral for obtaining a loan. The good news from a tax perspective is that the death benefits … Continue reading Can I deduct the life insurance premiums I pay on my tax return?

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