Blog Feed: Canadian Tax Resource — Canadian Tax Help & Financial Planning Resources

If you carry on a business as a corporation you may want to consider using a holding company to own your operating company. The holding company structure offers tax deferral opportunities and can help insulate your accumulated wealth from creditors or be used to avoid the U.S. estate tax. The Basics of A HoldCo In [...]Related Articles Taxable Benefits And The Company Car Business Investment Loss On Stock Options For Bankrupt Company Air Miles & Taxable Benefits Capital Gains Exemption on Foreig [..] > read more

Income Splitting For Business Owners

Published on 2012-05-10 15:20:36

Income splitting can produce some pretty dramatic results. Consider the case of a married, self-employed individual whose taxable income is in excess of $250,000. Assuming the spouse does not work, the tax bill would be $94,700 (in Ontario). If this couple were to split their income equally, their combined tax bill would drop to $77,700, [...]Related Articles Canadian Income Splitting Guide 12 Income Splitting Opportunities What is Income Splitting? Income Splitting Using Loans To Your Spouse > read more

What is Income Splitting?

Published on 2012-05-10 07:00:00

The income tax you pay is based on a set of progressive tax rates. This means that the amount of income tax you pay increases as your taxable income increases. For example, in 2012 you would pay federal income tax of: 15% on the first $42,707 of income you earn, 22% on the next $42,707, [...]Related Articles Canadian Income Splitting Guide 12 Income Splitting Opportunities Why Pension Splitting Does Not Kill Spousal RRSPs Pension Income Splitting For Canadians > read more

Avoid Probate & Split Income Using Trusts

Published on 2012-05-08 14:00:10

Income splitting and avoiding probate on death are possibly two to the most popular financial planning strategies in Canada. However, did you know that when you are planning your estate, that it is possible to avoid probate and provide your heirs a flexible income splitting opportunity using trusts? What Is A Trust? A trust is a [...]Related Articles Types of Trusts Pitfalls Of Transferring Ownership To Avoid Probate Taxation of Income Trusts Probate Tip – Multiple Wills > read more

Estate Planning 101 – Getting Organized

Published on 2012-05-08 11:15:47

Developing an estate plan involves more than just a will and planning for income taxes at death. It is important to take an inventory of your personal assets and affairs before you prepare your will. The Estate Planning Team Depending on the complexity of your estate, you may need to engage a number of professionals [...]Related Articles Estate Planning 101 – Family Law Issues TFSA’s Estate Planning & Beneficiaries Estate Planning 101 – Death, Taxes and Your Investments Estate Plan [..] > read more

Getting Ready For Your Taxes

Published on 2012-03-19 12:43:25

Tax season is here and it’s time to start gathering all of your important documents to take to your tax accountant. As you begin gathering all of your tax slips, don’t forget to bring your receipts for these, often overlooked expenses: Income Splitting Although income splitting has been severely limited, there are a number of [...]Related Articles Get Ready To File Your Income Taxes Medical Expense Tax Credit Get Ready to File Your Tax Return Guest Post: Minimizing Taxes For Entrepreneurs > read more

Line 300: Basic Personal Amount

Published on 2012-03-14 07:45:13

The basic personal amount is a tax credit available to anyone who paid income tax during the tax year. The impact of this tax credit is that any income you earned up to the amount of the credit is essentially tax free. For the 2011 tax year, the federal Basic Personal Amount was $10,527 and [...]Related Articles Tax Credit Amount vs. The Actual Tax Credit Line 303: Spouse or Common Law Partner Tax Credit Amount Line 301: Age Amount Tax Credit Personal Tax Credit vs. Tax Deductions > read more

Line 303: Spouse or Common Law Partner Tax Credit Amount

Published on 2012-03-12 07:30:53

If you were married or in a common law relationship during the 2011 tax year, you can claim the Spouse or Common Law Partner Amount if your spouses’ income was less than $10,527. Any net income your spouse reported on Line 236 of their tax return will reduce the credit amount dollar-for-dollar and fully eliminates [...]Related Articles Line 301: Age Amount Tax Credit Spouse or Common Law Partner Tax Credit Amount vs. The Actual Tax Credit Disappearing Tax Software Refund? > read more

Tax Credit Amount vs. The Actual Tax Credit

Published on 2012-03-08 11:30:47

Income taxes can be confusing and the concept of the tax credit can be a challenge. But tax credits are not that difficult once you understand some of the terminology. Tax Credit Amount vs. The Actual Credit Non-refundable personal tax credits are listed as an amount, which is different from the actual value of the tax credit itself. [...] No related posts. > read more

Get Ready To File Your Income Taxes

Published on 2012-01-04 15:13:22

A colleague of mine ran out last week and purchased tax preparation software so he could get a head start on his taxes! Filing your taxes is often in the same category as visiting the dentist to have your teeth drilled. You know you need to do it, but would rather put is off until the [...]Related ArticlesGet Ready to File Your Tax ReturnWhy File a Income Tax Return?The Countdown To The Tax DeadlineNo Income No Tax Return? > read more

2010 Year End Tax Planning Strategies

Published on 2011-12-07 09:32:40

The end of 2011 is near! If you have not considered your tax options, now is the time to consider the year end tax planning strategies that must take place before the end of 2011. Be mindful of the timing of investment transactions. Many stock and mutual fund transactions must happen before the end of [...]Related Articles2010 RRSP Contribution LimitsTax Time: Tax Deductions & Credits For 2010Beware of Year-End Tax Deadlines For CorporationsTop 10 Tax Articles of 2010 > read more

2012 RRSP Contribution Deadline

Published on 2011-12-02 14:28:08

It seems that there is some confusion around the 2012 RRSP deadline and a lot of websites are proclaiming the wrong RRSP deadline for 2012. Contributions made in the current tax year or within the first 60 days of the following year can be deducted on your tax return [s.146(5)]. The deadline for contributing to [...]Related ArticlesRRSP Over Contribution & Decline In Market ValueThe RRSP Deadline Is ApproachingCanadian Tax Deadline CalendarAnnual RRSP Contribution Limits > read more

Selling Your Business & Saving Taxes

Published on 2011-11-24 14:14:32

You started your business from scratch and built it into a successful enterprise. Perhaps you want to retire and spend time with your family or maybe you want to move on to something different. Either way the value built up in your business will result in a tax a tax bill. Luckily the Income Tax [...]Related ArticlesSelling on eBay Can Be TaxingCapital Gains Exemption on Foreign InvestmentNon-Capital Loss In A BusinessTax Free Income > read more

Understand Your Pension Decision

Published on 2011-06-01 08:00:10

If you have a defined benefit pension plan and are retiring or leaving your employment, you may be presented with different pension options. Depending on the terms of your pension plan, you will be offered any or all of the following choices: Lifet > read more

Weekly Reading: Blog Update

Published on 2011-04-01 09:00:17

Each week, I share articles and stories from other blogs and websites I’ve come across. The most popular articles and commenter’s are also be mentioned. I encourage you to take a look at these articles and visit their sites. If you have an idea f > read more

The Spousal RRSP & The Double Trap

Published on 2011-03-31 09:00:03

If you have a spousal RRSP, be aware of the special spousal RRSP rules that may apply when your spouse withdraws from the plan. If you have withdrawn from a spousal RRSP, you may have experienced the way these rules are applied. When you consider th > read more

Selling on eBay Can Be Taxing

Published on 2011-03-30 09:00:53

If you sell stuff on eBay, Craigslist, Kijiji, or in yard sales the taxman may be calling on you. Income tax is not a concern for most Canadians selling unwanted items. However, income tax may apply based on the use of the property you are selling or > read more

How Do You Know You Need It?

Published on 2011-03-29 09:00:47

My wife and I value our family time and have traditionally spent weekends (and the odd week) at her family’s cottage. However, in the last few years we have decided that we should make an effort to take vacations to different destinations. We f > read more

Know Your ACB & Save Tax Dollars

Published on 2011-03-28 08:00:11

When you buy an investment or other taxable property, you may have a capital gain or loss when you eventually sell. The Gain or loss is the difference between what you received from the sale and what you paid for it. Knowing what is included in the c > read more

Weekly Reading: Blog Update

Published on 2011-03-25 09:30:41

What is an Estate Freeze?

Published on 2011-03-24 10:28:34

An estate freeze is not a mid-winter funeral! If you have a business, the estate freeze is a way to fix the value of your business or investments and transfer future growth to your children and beneficiaries. The result is that you can split income b > read more

The 2011 Federal Budget Highlights

Published on 2011-03-22 17:05:57

The 2011 Federal budget does not contain any major changes. Share your thoughts in the comments. There are a few minor tax credit available, enhancements to GIS, and some tax loopholes have been closed. The most significant changes is the $600 per ye > read more

Disappearing Tax Software Refund?

Published on 2011-03-22 10:00:33

If you’re married and started entering your income into tax software such as TurboTax Canada, you might have noticed that your refund starts rather large and then suddenly drops when you enter your spouses’ income into the software. This is a que > read more

Married & Filing Jointly In Canada

Published on 2011-03-21 09:30:37

The income tax system in Canada requires that every individual file their own income tax return and report only their own income. From time-to-time, I come across situations where a married couple has filed only one income tax return as a joint filin > read more

Weekly Reading Blog Update

Published on 2011-03-17 08:00:20

Each week, I share articles and stories I’ve come across that I find interesting, useful, or funny. The most popular articles and commenter’s are also be mentioned. I encourage you to take a look at these articles and visit their sites. I > read more

Blog Roll Update & Announcement

Published on 2011-03-16 11:20:34

One of the unique features of using this medium is the opportunity to share other sites that visitors to the Canadian Tax Resource Blog may find helpful, useful, or al least worth a look. Many blogs share other sites with their readers through their > read more

How To Report RRSP’s On Your Taxes

Published on 2011-03-15 10:00:36

I get a LOT of questions about how to report RRSP contributions, RRSP deductions, transfers to the HBP or LLP, and transfers from an RPP on the income tax return. Many of these amounts must first be reported Schedule 7 – RRSP, Unused Contributio > read more

7 Things Every Investor Should Know

Published on 2011-03-14 12:29:57

Whether you’re just starting out or have invested for years, having a process to get you started is always important. Risk and return are always important and are often talked about, but there are other things you should be aware of. Here is a > read more

Moving An IRA or 401(k) to Canada

Published on 2011-03-10 00:35:38

If you have lived or worked in the U.S., you may have an Individual Retirement Account (IRA) or 401k plan. Leaving these accounts in the U.S. can be administratively challenging and you may wish to consider moving them to Canada. In certain circumsta > read more

ING Direct Announces THRiVE!

Published on 2011-03-09 09:46:59

I just received an e-mail not long ago from ING Direct announcing their new THRiVE chequing account. If you have an ING Direct account, you probably know that the only way to deposit or withdraw from ING is through a bank-to-bank transfer. No more. W > read more

Probate Fees vs. Income Tax

Published on 2011-03-09 09:15:59

One of the benefits of an RRSP or RRIF is the ability to directly name a beneficiary and avoid probate fees (also referred to as probate taxes) on death. While the direct beneficiary designation feature is an efficient method of passing your retireme > read more

Tax & Personal Finance Guides

Published on 2011-03-05 09:00:48

The Canadian Tax Resource Bloghas a host of personal finance and tax related articles on a variety of topics. The Tax and Personal Finance Guide is a source book for information and is organized around major topics, such as RRSP’s, TFSA’s > read more

Income Tax and Short Selling Stocks

Published on 2011-03-04 09:00:56

Savvy investors who feel the value of a stock will go down can use a strategy know as a short sale. Short sales have their own unique tax profiles and anyone considering a short sale should be aware of the tax consequences. A visitor to The Canadian > read more

Tax Breaks 2010: Businesses and Individuals

Published on 2011-02-28 23:00:03

I apologize if you are finding this instead of the article. The original article was provided by a guest poster who had inserted a link to a U.S. tax software page. I removed the link (why would a Canadian want to visit a US tax software page) and t > read more

TFSA & Non-Resident Withholding Taxes

Published on 2011-02-28 10:00:45

I have received a number of questions lately asking if withholding tax applies to foreign stocks held in the TFSA. The following explains how foreign withholding taxes are applied in the TFSA (and the RRSP & RRIF). To understand the how this work > read more

Court Orders Payment of Friends Tax Bill!

Published on 2011-02-28 09:00:26

Your friend comes to you with a favour and proposition: The Canada Revenue Agency has attempted to collect back taxes and has frozen your friends’ bank accounts. Your friend needs to pay rent and buy groceries and asks you to help. Your f > read more

Renting Your Home Can Be Taxing

Published on 2011-02-25 14:28:48

What happens when you start renting out your home? Understanding how the income tax act looks the situation can help you avoid an un-expected tax bill. When you sell your principal residence, you generally will not incur a capital gain because of the > read more

Capital Gains & Investing

Published on 2011-02-24 21:00:00

Let’s face it! Most Canadians probably find income taxes boring (unless of course, you’re an accountant!). But paying your income taxes is a necessary evil! If you have sold stocks or other investments at a profit, you will have to pay th > read more

Pension Options When You Retire

Published on 2011-02-24 09:30:46

If you are a member of a pension plan, you cannot withdraw your contributions until you retire or cease to be a member of the plan. However, when you do retire, your employer may provide you different options for your pension. You may be offered lump > read more

RRSPs And Retirement Allowances

Published on 2011-02-23 20:00:52

If you have lost your job or are retiring and will be receiving a severance payment, you may be able to shelter some of your severance from income tax. To be able to do this, the payment must qualify as a retiring allowanceand depending on your circu > read more

The Principal Residence Exemption

Published on 2011-02-23 08:30:24

When you sell personal use property such as a car, jewelry, or furniture for more than you paid for it, you have to report and pay income tax on the net capital gain. The definition also includes real property, including the principal residence you o > read more

Calculate The Pension Adjustment

Published on 2011-02-22 09:00:46

The pension adjustment (PA) represents an individuals total pension credits for the tax year. The PA reduces the amount of RRSP contribution room that an individual can make. For defined benefit pension plans, the calculation of the PA can be complex > read more

Tax Free!? Lottery Winnings & Gifts

Published on 2011-02-21 08:30:51

Residents of Canada who receive a gift, inheritance, or receive lottery or other gambling winnings are not taxed on their receipt and do not have to include these amounts in income for tax purposes. However, there may be other tax implications of gi > read more

Principal Residence, Joint Ownership And Death

Published on 2011-02-20 08:00:33

This question was originally posted in February 2009. The reader had asked about how the principal residence exemption is handled following the death of the property owner. Question: My mother died Jan 2007, and left her house and estate to me in her > read more

Signs of Financial Trouble

Published on 2011-02-20 07:00:30

The onset of financial trouble is some times obvious: The loss of a job, fire, or accidents can put financial strain on the best of us. However, there is a number of warning signs that can appear that we may not recognize and are self inflicted.Rela > read more

Capital Gains On The Principal Residence After Death

Published on 2011-02-20 07:00:00

A visitor to the Canadian Tax Resource Blog wrote in asking a rather interesting question about how an estate was taxed on the capital gain from the sale of the deceased’s principal residence. The visitor was the executor of an estate where the > read more

Tax On Gifts & Inheritances

Published on 2011-02-19 08:00:04

Gifts, inheritances, and windfall gains from lotteries or other gambling are generally not taxable when received in Canada. The amounts you receive as gifts, inheritances or windfalls are considered to have been paid from after tax income and would r > read more

Deducting Automobile Expenses For Work

Published on 2011-02-18 15:41:14

If you are required by your terms of employment to use your own vehicle and your employer does not provide a non-taxable allowance based on the number of kilometres drive, then you may deduct a portion of your automobile expenses from your income fro > read more

Understanding The Pension Adjustment (PA)?

Published on 2011-02-18 09:25:23

If you are a member of a Registered Pension Plan (RPP) or Deferred Profit Sharing Plan (DPSP), your annual RRSP deduction limit is reduced by the pension adjustment (PA). The pension adjustment is used to ensure that there is fairness for those who c > read more

How Much Can I Contribute To My RRSP?

Published on 2011-02-17 20:00:00

One of most common questions about RRSP’s is how much can be contributed to an RRSP? The rules may seem complicated, but for most Canadians, it’s pretty straight forward. If you filed an income tax return last year, you would have received a Noti > read more

How Shareholder Loans Affect Your Income Tax

Published on 2011-02-12 06:00:01

A visitor to Canadian Tax Resource recently asked the following question: “Is it allowable to issue an interest free loan to a director of a corporation by the corporation for the purpose of the director purchasing a residence or using it to pa > read more

Cash Out Your RRSP And Pay Down Debt?

Published on 2011-02-11 08:00:34

Have you considered withdrawing from your RRSP or other retirement savings plans to pay down your debts? Have you thought of using your RRSP to take a vacation or as a ready source of cash? Withdrawing from your RRSP early can have some unintended ta > read more

RRSPs versus Non-Registered Accounts

Published on 2011-02-07 09:00:28

With the preferred tax treatment of capital gains and dividends, one question that I am often asked is whether it is better to invest inside a tax deferred savings vehicle such as an RRSP or in a non-registered account. However, the treatment of cap > read more

Eligible Tax Deductions For Home Improvements

Published on 2011-02-01 08:00:48

NOTE: The HRTC was only available for the 2009 tax year and is no longer available. We have had many questions posted below as well as received by e-mail about the new Home Renovation Tax Credit. We encourage you to continue to ask your questions! > read more

TFSA Questions And Answers

Published on 2011-01-30 07:00:15

Who is Eligible to Open a TFSA? Any individual (other than a trust) who is a resident of Canada and is the age of majority, who has a valid SIN number is eligible to open a TFSA account. What are the TFSA Contribution Limits? Starting in 2009, indivi > read more

Questions About The TFSA

Published on 2011-01-30 03:00:03

Over the last few years I have received a number of question about the Tax Free Savings Account (TFSA). Below is a number of “quick questions” I have answered lately. Qualified Investments & TFSA Question: I am being told by my inves > read more

Business Telephone Services: Ring Central Canada

Published on 2011-01-24 12:19:21

The telephone is the lifeblood of many businesses but it can also be one of the more expensive costs for a new business (right behind rent or office lease expenses). Many new business owners rely on their cell phone or smart phone as their phone of c > read more

What Happens if I Contribute More Than My Deduction Limit?

Published on 2011-01-22 07:00:47

There is a limit on how much you can contribute to your RRSP! Your annual RRSP contribution limit is reported on your Notice of Assessment or Notice of Reassessment. If you exceed your annual RRSP contribution limit, you are subject to a penalty tax > read more

When Are Your Tax Returns Due?

Published on 2011-01-11 12:03:03

It seems that every year there are two flurries of activity surrounding income taxes: The RRSP Deadline and the Tax Filing Deadline. If you are self-employers, is another income tax filing deadline that you should also be aware of: The date your inco > read more

Pension Income Splitting For Canadians

Published on 2011-01-07 12:22:11

GA_googleFillSlot("Page_Top_468x60"); The 2007 tax year was a big win for seniors when the Government introduced pension income splitting which allows lowering income taxes between spouses. Prior to these new rules, only Canada Pension Plan could be > read more

Why File a Income Tax Return?

Published on 2011-01-05 09:00:42

GA_googleFillSlot("Page_Top_468x60"); Taxes are boring! They are complicated, can take a lot of time to do and can be a pain in the-you-know-what. But did you know that if certain conditions apply, you don’t have to file a tax return? Sadly the > read more

The Life Long Learning Plan (LLP)

Published on 2011-01-04 12:04:09

GA_googleFillSlot("Page_Top_468x60"); The Life Long Learning Plan allows you to withdraw up to $10,000 from your RRSP tax free to finance your or your spouses’ (or common law partners’) education. The education must be provided by a des > read more

How Canadian Income Tax is Calculated?

Published on 2011-01-04 07:00:20

The Canadian Income Tax Act contains ordering rules and general principles for calculating net income for tax purposes and taxable income. The accumulation of income and deductions must follow a chronological order and is summarized as follows: 1. Ca > read more

Understanding TFSA Contribution Room

Published on 2010-12-30 09:00:12

Reader Question - If I do not open a TFSA in 2009 will the $5,000.00 contribution room carry forward, enabling me to contribute up to $10,000.00 in 2010? If you do not use your TFSA contribution room, it will definitely carry forward. You are given $ > read more

Canadian Tax Deadline Calendar

Published on 2010-12-23 09:00:17

For most individuals, April 30th is the deadline to have your income tax return to the CRA. If you owe the CRA money, your payment must also be received by the CRA on April 30th (even if you are self-employed and you file in June!). Here the income t > read more

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