9 votes
Accepted

Can the CRA peek into the amount of a Canadian bank account forthwith?

A few key points: (1) Don't try to justify to yourself not reporting income to the CRA. If you have an obligation, file it, whether or not you expect to be caught for failure to file. (2) If the ...
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6 votes
Accepted

Are you required to pay the full tax on income if your employer doesn't pay what they claim to?

You would be very well advised to consult with an actual lawyer on this matter. For tax purposes, if your T4s are inaccurate and you cannot get accurate ones, Intuit recommends filing your tax return ...
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  • 5,067
5 votes

Can I avoid an audit by submitting documents early?

I personally don't think submitting early is going to make a difference. While the exact process of selecting who to audit will always remain secret, it's obvious that certain things will make your ...
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  • 769
5 votes

Will CRA suspect, if you never filed and now retroactively files taxes?

There is no penalty for filing a tax form late in Canada if you do not owe any taxes. The penalties are all in terms of percentages of the taxes you owe. So if he genuinely never earned more than the ...
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  • 30.4k
4 votes
Accepted

In a Canadian TFSA, does interest earned within the account count toward the contribution limit?

Just the principal contribution counts towards the limit. In your example, if you contribute 30,000 and you earn 20,000, only the 30,000 counts. To find out exactly how much room you have, you can ...
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4 votes
Accepted

Deducting home costs if I work from home on the side?

Your freelance income will not qualify you for the work-from-home deductions, for that you would need a T2200 form signed by your employer. But, you are allowed to be self employed as a sole-...
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  • 769
3 votes

How are dividends on US stocks treated by the CRA?

IMPORTANT NOTE: Total Ordinary Dividends (Box 1a) includes Qualified Dividends (Box 1b). So don't sum them. Your income for Canadian tax purposes is the Total Ordinary Dividends only. Qualified ...
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3 votes

Canada - Is a business or website a depreciable property

No. A business may have depreciable assets but is not itself a depreciable asset. A business is an investment.
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  • 31.4k
3 votes
Accepted

Deducting your own rent you incurred while renting out your own place

Are you allowed to deduct the $1000 from $1400? No, you can only deduct from the $1,400 of rental income those expenses that are related to the rental activity. If paying a mortgage you could deduct ...
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  • 63.9k
3 votes

Gift amount allowed for directors in a company in Canada

There is no special gift tax in Canada. Cash or near-cash gifts and awards are fully taxable as employment income. Presumably, the limit is the amount of cash you've got.
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2 votes
Accepted

CRA made a mistake in our favour

They keep records on all interactions with you. It is quite unlikely that they will discover it on their own as you are using the numbers they generated so they are unlikely to recheck their ...
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  • 874
2 votes
Accepted

Withdrawing from RRSP to pay income tax owed to CRA?

You can withdraw from your RRSP to pay your taxes. While not necessarily advisable, it is permitted — yet the tax consequences are no different just because you happen to be using the money to ...
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  • 31.4k
2 votes

Canada - tax for non-resident from sources outside Canada

You state that you will be using your Canadian bank account(s) to receive payment for goods and services sold outside Canada. There are two reasons for you to be filing your taxes in Canada: 1- What ...
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  • 1,235
2 votes

When filing taxes in Canada, in what cases does box 39 on the T4 get reported as half of box 38?

Here's the best explanation I found relating to why your T4 box 39 might not have an amount filled in, even when box 38 has one: Department of Finance – Explanatory Notes Relating to the Income ...
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  • 31.4k
2 votes

At what point do recurring small business losses become a problem with Canada Revenue Agency?

There is no hard and fast rule. If there was, people could cleverly arrange to make money just often enough to stay on the "ok" side. It's a judgement call by the CRA and it probably starts with an ...
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  • 12.1k
2 votes
Accepted

Does the CRA charge any penalty if you file a wrong tax return?

If the correction results in you owing them money, you typically just need to pay them the appropriate amount. I believe they charge back-dated interest on the amount if it was supposed to have been ...
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  • 769
2 votes
Accepted

For how many years after I file my tax do I need to retain my documents

CRA suggests keeping them for 6 years : http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/kpng/menu-eng.html
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2 votes
Accepted

Can I withdraw money from my rrsp if I made excess contribution by mistake?

Overcontributions made after the calendar year are not usually a problem. This is because while contributions made in Jan and Feb can be counted towards the previous year, they do not have to be. This ...
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  • 30.4k
2 votes

Can I withdraw money from my rrsp if I made excess contribution by mistake?

Intuit has a pretty good write-up on this subject. As you noted, you are allowed to exceed your limit by $2000 (though this overcontribution is not tax-deductible). Also, your contribution room ...
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2 votes

To know if you have filed taxes before in Canada?

The folks at CRA are astonishingly helpful. As in you get off the phone and say to yourself "was that really a government employee I was talking to?" Get in touch with them and ask. You can set up ...
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  • 12.1k
2 votes

Moved to Canada for Grad School, Getting Heavily Taxed in U.S

Per this answer, unless you can get a W2 for the scholarship, the IRS seems to regard the scholarship as unearned income. This would mean that Form 2555 is irrelevant for this scholarship, regardless ...
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  • 548
2 votes
Accepted

How can portion of cellphone bill be estimated for work?

I'll give you the practical answer my tax advisor gave me. First off, it's not about how much you use your phone, its about what fractionof the charges are work related. Second, as long as your ...
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  • 30.4k
2 votes

Is it just for the CRA to charge interest on a notice of collection dated one month ago, but that they never mailed?

If you write a very sympathetic letter to the CRA explaining your circumstances, with a specific request to waive the interest on non-payment, with proof that payment of the balance owing has already ...
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2 votes

How do I find out what are the min and max withholdings from each paycheque?

There is a formula to see how much to withhold from each of your cheques. It's basically "how much tax you're likely to pay, divided by number of paycheques a year." When you fill out the TD1 you ...
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  • 12.1k
2 votes

Are friends and family discounts or employee discounts taxable?

It is not taxable, because the transaction is not a barter transaction. The discount is not offered in exchange for a specific thing like an amount of work. It is offered to someone with a specific ...
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  • 30.4k
2 votes
Accepted

Canada Tax work space in the home expenses with no income (T2200)

Your reading of the line is correct. The two lines after the one you quote reinforce the statement. However you can get round this very simply by having your business pay you a salary. The salary is ...
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  • 30.4k
2 votes

How much must one pay tax in Canada if received income from Switzerland?

Canada has a bilateral tax treaty with Switzerland. There are a lot of details, but the gist of it is in this quote from Article 22: tax payable in Switzerland on profits, income or gains arising in ...
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  • 531
2 votes
Accepted

Is a depreciation claim on a rental property basically always worth it in Canada, given stable income?

Yes, it is better to take depreciation most of the time, but not quite as much as you imply. Keep in mind the rules of depreciation in Canada: Depreciation on rental properties reduces your rental ...
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1 vote

Can I get a full-time job in Germany but ask the German company to sign contract with my own corporate in Canada instead of myself?

Here's my take on the issue, based on what I learned when looking into the opposite direction (I'm freelancer and business owner based in Germany, who will provide a course in Canada soon) My chamber ...
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1 vote
Accepted

Can I get a full-time job in Germany but ask the German company to sign contract with my own corporate in Canada instead of myself?

Yes, if the company agrees to it then it is possible. Your Canadian Corporation will have to register a branch office in Germany (Zweigniederlassung) and pay taxes on the German income. If your ...
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