2017 Tax Convictions by CRA Reap Big Penalties and Jail for Some

CRA has been busy announcing new convictions at the start of 2017, a great deterrent for potential tax evaders at the start of tax season. It’s always best to come forward to declare shortfalls in income reporting or overstatements of tax deductions or credits to avoid expensive interest, penalties and potential jail time. Here’s what happened to those who didn’t. . . Here’s what happened to Canada’s most recent tax evaders, as per CRA’s news releases: Vancouver, BC, February 28, […]

CRA Starts Tracking Tax Cheats by Fingerprinting April 1, 2017

It’s no April Fool’s joke: fingerprints of convicted tax cheats will be recorded in the Canadian Police Information Database (CPID), and accessible by Canadian police and border guards as well as some foreign agencies including the US Homeland Security department starting April 1, 2017. The mandatory fingerprinting policy was first reported by the CBC, which uncovered the directives under the Access to Information Act, and Moneysense Magazine. Both reports refer to an internal CRA memo on the matter as well […]

Uber Drivers and Salespeople: Claiming Automobiles is Tricky

What do commissioned sales people and Uber drivers have in common? They each will want to know the difference between an automobile, a passenger vehicle and a motor vehicle, especially if they are keen on claiming all the deductions possible against their income this tax season. Especially when using a car for salaried work, commission sales or self-employment, it pays to file an audit-proof return, as these claims are often audited. An automobile for tax purposes can be either a […]

What Deductions Can Salaried Employees Claim?

Because employers are generally required to pay for the premises, assets and supplies used up by their employees in performing their duties, the employees themselves have few out-of-pocket costs to claim on the tax return. In some cases, the employee will have expenditures, but to claim them, very specific procedures must be followed. For example, the employer, must verify in writing on Form T2200, Declaration of Conditions of Employment, that no expense reimbursement was provided to the employee and that […]

Pre-Budget Analysis: Finance Canada Priorities

A Federal budget date is expected soon after Prime Minister Trudeau and Finance Minister Morneau return from this week’s meetings with the new U.S. administration. Two important reports have been issued recently to provide insight into some of the thinking about risks and responses in our financial world: Finance Canada’s 2016-2017 Report on Plans and Priorities and the Bank of Canada’s January 18, 2017 Monetary Policy Report. Taken together, they provide a good crystal ball on the economic matters that […]

Interest Deductibility Varies on Investment Activities

When can you claim the interest on investment loans? It’s a common question but the answer depends on the investment for which you are borrowing money. In order to claim the interest when you borrow money to invest, your loan must meet three criteria. First, the interest costs must be payable during the taxation year in question. Secondly, those costs must be reasonable. Finally, (and most importantly), the borrowed money must be invested to earn business income (considered to be […]

Investment Expense Claims Can Be Lucrative

Investors, be sure to claim your investment expenses on the 2016 tax return. If it’s done properly, you can save hundreds, maybe even thousands, of dollars over the years. But you have to do it correctly, or you could get into hot water. What are investment expenses and how can you claim them? This can be a lucrative claim because all other income of the year is reduced by these charges. Because of its position on the tax return, this […]

First Quarter Tax Filing Milestones

It’s time to take note of the tax filing requirements and investment opportunities that arise in the first quarter of 2017: January, February and March. Investors making TFSA and RRSP contributions, as well as interest payments on inter-spousal loans are affected. So are taxpayers who are making quarterly instalment tax remittances. JANUARY – TFSAs: Additional TFSA Contribution Room. An additional $5,500 (indexed) in TFSA contribution room became available to Canadian adult residents on January 1, 2017, providing a total of […]

Worried About Tax Troubles? Apply for Relief

New Year’s resolutions often involve the purging of winter weight, weighty closets or weights on the mind, including the guilt of understating income or overstating expenses or credits on the tax return. Personal trainers or friends can help with the first two goals, but when it comes to CRA, your most important ally is a tax specialist – an investment that can save you large amounts of time and money. If you made an error or omission that the taxman […]

Taxing the Rich: Will the Desired Results Occur?

President-elect Donald Trump will soon celebrate his inauguration and with his ascent to power, he has promised to reduce marginal tax rates, cut taxes, and allow businesses to expense new investments rather than deducting interest costs. In Canada, meanwhile, we await a new federal budget. What happens in the U.S., however, is relevant and could shape future taxation policies in Canada. Top criticisms of the Trump plan: the top beneficiaries of the changes will be the 0.1% with incomes over […]