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 […]

Tax Tip: Manage Net Income for 2016

Who pays higher marginal tax rates: the executive earning $250,000, or the family that makes do on $60,000? If you said the family, you would be correct. That’s because marginal tax rates are higher in income brackets that are impacted by the clawback of social benefits and tax credits. But when does that happen? For most families, clawbacks start when family net income is around the $30,000 mark. But just how do you determine if your income is too high […]

Moving Soon? Keep Receipts for a Lucrative Deduction

If December is moving month for you, three pieces of advice: tax a deep breath, treat yourself to some extra eggnog, and keep those moving expense receipts handy. They will be worth a lot of money when you file your tax return. To be eligible, the move to your new home must be at least 40 km closer to the new work location than the old home. Generally the move must be within Canada, although students may claim moving expenses […]

Year-End Planning: Reviewing Taxpayer Rights On Appeal

The Auditor General for Canada has recently issued a report on CRA’s appeal process, focusing on whether CRA has been efficient in managing income tax objections. It’s important, says the report, because taxpayers have the right to impartial and timely review of their tax returns in order to avoid significant costs in time and resources when they disagree with CRA. The overall findings were interesting: The report found that CRA took too long to process income tax objectives, contributing to a […]