Author Topic: Can"EH"dian Tax - You have questions, I have answers  (Read 94650 times)

RidinTheAsama

  • Stubble
  • **
  • Posts: 111
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #550 on: March 29, 2016, 10:55:01 AM »
7% per dollar means you lose 7c/dollar. For every $100 net, you lose $7. $10k, $700. $35k, ~$2500. After you hit household $65k, $100 net means $3.20 lost. For $90k, that means you've lost $2500 at the first bracket, and roughly another thousand in the second bracket.

Yes, paying in to an RRSP reduces your net income. It's more-worth bumping your RRSP payments for child benefit if your household net income is under $65k!

Thanks.
Math I can do.... It's the language of accounting that gets me... So I appreciate the translation!

The RRSP contributions have been made already (and will be again this year) regardless.  But it's nice to know that they have the added bonus of increasing the payments we'll receive out of this program!

daverobev

  • Handlebar Stache
  • *****
  • Posts: 2442
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #551 on: March 31, 2016, 10:27:55 AM »
Ok, so! I'm doing my T3s. I have values on most of them in box 42, and some in 25 and 34. In the Footnotes - notes box it says:

Box 21 - Enter this amount on line 921 Schedule 9, Taxable Capital Gains
multiplied by 2.
Box 25 - Enter beneficiary’s share of the amount on line 925 of Schedule 9.
Box 26 - Enter the beneficiarys share of the amount on line 926 of Schedule 9,
Other Income.
Box 42 - Enter beneficiary’s share of the amount on line 942 of Schedule 9.
Box 49 - Enter beneficiarys share on line 949 of Schedule 9

AFAIK Schedule 9 is gifts/donations?! Can I just ignore this - the beneficiary is 100% me! Or at least, I assume it is, they are ETFs in my name, this is just ACB stuff right?
Great Canadian Rebates (cashback on credit card signups) || Tangerine Orange Key: 48322202S1 (free $50, free chequing/savings)
Ebates (US) free $10

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #552 on: March 31, 2016, 01:39:07 PM »
Ok, so! I'm doing my T3s. I have values on most of them in box 42, and some in 25 and 34. In the Footnotes - notes box it says:

Box 21 - Enter this amount on line 921 Schedule 9, Taxable Capital Gains
multiplied by 2.
Box 25 - Enter beneficiary’s share of the amount on line 925 of Schedule 9.
Box 26 - Enter the beneficiarys share of the amount on line 926 of Schedule 9,
Other Income.
Box 42 - Enter beneficiary’s share of the amount on line 942 of Schedule 9.
Box 49 - Enter beneficiarys share on line 949 of Schedule 9

AFAIK Schedule 9 is gifts/donations?! Can I just ignore this - the beneficiary is 100% me! Or at least, I assume it is, they are ETFs in my name, this is just ACB stuff right?

Hi Dave -

I think your googling has led you astray here.

To answer your question - just enter your T-slip information into the corresponding box in whatever tax software that you're using.

There are two meanings to "T3" in Canadian Tax.

The first refers to a T-slip that you receive from an income trust like an ETF.

The second is the Tax Return for the Trust itself. When it says Schedule 9, this is instructions on how to prepare the Trust Return, where Schedule 9 breaks out the income allocations/designations to beneficiaries of the Trust. I very much doubt this is applicable to you.

Hope this clarifies -

CPA CB

daverobev

  • Handlebar Stache
  • *****
  • Posts: 2442
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #553 on: March 31, 2016, 06:25:54 PM »
Ok, so! I'm doing my T3s. I have values on most of them in box 42, and some in 25 and 34. In the Footnotes - notes box it says:

Box 21 - Enter this amount on line 921 Schedule 9, Taxable Capital Gains
multiplied by 2.
Box 25 - Enter beneficiary’s share of the amount on line 925 of Schedule 9.
Box 26 - Enter the beneficiarys share of the amount on line 926 of Schedule 9,
Other Income.
Box 42 - Enter beneficiary’s share of the amount on line 942 of Schedule 9.
Box 49 - Enter beneficiarys share on line 949 of Schedule 9

AFAIK Schedule 9 is gifts/donations?! Can I just ignore this - the beneficiary is 100% me! Or at least, I assume it is, they are ETFs in my name, this is just ACB stuff right?

Hi Dave -

I think your googling has led you astray here.

To answer your question - just enter your T-slip information into the corresponding box in whatever tax software that you're using.

There are two meanings to "T3" in Canadian Tax.

The first refers to a T-slip that you receive from an income trust like an ETF.

The second is the Tax Return for the Trust itself. When it says Schedule 9, this is instructions on how to prepare the Trust Return, where Schedule 9 breaks out the income allocations/designations to beneficiaries of the Trust. I very much doubt this is applicable to you.

Hope this clarifies -

CPA CB

Ahhhh that's funny - no googling, this is literally what Interactive Brokers have put onto my T3s for my ETF reporting. The schedule 9 I just looked down through my tax return to see if Simpletax had generated one, and lo and behold, it's there (T1 sched 9 I guess).

I've just filled in the boxes already, as you said. Now just to wait for Questrade to pull their fingers out and send me my final T3 so I can actually file.

Or maybe I should wait a week or two. I always think of something else I should've put on, right after filing.

Thanks!
Great Canadian Rebates (cashback on credit card signups) || Tangerine Orange Key: 48322202S1 (free $50, free chequing/savings)
Ebates (US) free $10

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #554 on: April 01, 2016, 06:24:45 AM »
Ok, so! I'm doing my T3s. I have values on most of them in box 42, and some in 25 and 34. In the Footnotes - notes box it says:

Box 21 - Enter this amount on line 921 Schedule 9, Taxable Capital Gains
multiplied by 2.
Box 25 - Enter beneficiary’s share of the amount on line 925 of Schedule 9.
Box 26 - Enter the beneficiarys share of the amount on line 926 of Schedule 9,
Other Income.
Box 42 - Enter beneficiary’s share of the amount on line 942 of Schedule 9.
Box 49 - Enter beneficiarys share on line 949 of Schedule 9

AFAIK Schedule 9 is gifts/donations?! Can I just ignore this - the beneficiary is 100% me! Or at least, I assume it is, they are ETFs in my name, this is just ACB stuff right?

Hi Dave -

I think your googling has led you astray here.

To answer your question - just enter your T-slip information into the corresponding box in whatever tax software that you're using.

There are two meanings to "T3" in Canadian Tax.

The first refers to a T-slip that you receive from an income trust like an ETF.

The second is the Tax Return for the Trust itself. When it says Schedule 9, this is instructions on how to prepare the Trust Return, where Schedule 9 breaks out the income allocations/designations to beneficiaries of the Trust. I very much doubt this is applicable to you.

Hope this clarifies -

CPA CB

Ahhhh that's funny - no googling, this is literally what Interactive Brokers have put onto my T3s for my ETF reporting. The schedule 9 I just looked down through my tax return to see if Simpletax had generated one, and lo and behold, it's there (T1 sched 9 I guess).

I've just filled in the boxes already, as you said. Now just to wait for Questrade to pull their fingers out and send me my final T3 so I can actually file.

Or maybe I should wait a week or two. I always think of something else I should've put on, right after filing.

Thanks!

That's unreal - they will be confusing the hell out of people for their taxes.

There will be many people getting re-assessed by CRA!

Cheers,

CPA CB

COlady

  • Bristles
  • ***
  • Posts: 340
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #555 on: April 01, 2016, 09:22:23 AM »
Hey CPA CB, I'm hoping you can point me in the right direction here. I am a CPA in states. My mom's husband has dual citizenship b/w US and Canada. He will be selling his business in CA in the near future and he's hoping for a $600k profit. I believe he should be filing US income tax returns since he's a dual citizen. His worldwide income would be taxed in the US and then he would get a credit for taxes paid to CA. I have no int'l experience and do not feel comfortable dealing with his tax situation. Do you know of anyone in either the US or Canada that you can recommend?

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #556 on: April 01, 2016, 02:09:35 PM »
Hey CPA CB, I'm hoping you can point me in the right direction here. I am a CPA in states. My mom's husband has dual citizenship b/w US and Canada. He will be selling his business in CA in the near future and he's hoping for a $600k profit. I believe he should be filing US income tax returns since he's a dual citizen. His worldwide income would be taxed in the US and then he would get a credit for taxes paid to CA. I have no int'l experience and do not feel comfortable dealing with his tax situation. Do you know of anyone in either the US or Canada that you can recommend?

Hi CO Lady,

Absolutely, Me!

I can definitely help here. We deal with business sales constantly and have an established practice in International Tax.

If you want to send me a PM - I'd be happy to discuss this with you further. I'm glad he hasn't sold yet as there are some planning issues which need to be taken care of prior to the sale.

All the best,

CPA CB

Le Barbu

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 45
  • Location: Lévis, Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #557 on: April 05, 2016, 01:19:21 PM »
One of my coworker asked me this one because he knows I got a MMM forum acces to that famous CPA CB

His wife is from USA and she is now a permanent resident of Canada since November 2015

She receive a disability payment from the USA government and they are wondering if they have to include this in their Canadian tax report. On the other side of the border, the US governement told her they dont want anything (probably because the ammount is pretty small?)

Any clue?
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption of its own habitat"

-MMM

Tawcan

  • 5 O'Clock Shadow
  • *
  • Posts: 25
  • Location: Vancouver, Canada
    • Tawcan
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #558 on: April 05, 2016, 04:30:55 PM »
On union and professional fees. If my work reimburses me, I assume I can't claim this on my tax return? This is what I have been doing but wanted to double check.
Tawcan.com - quest for joyful life and financial independence

Le Barbu

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 45
  • Location: Lévis, Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #559 on: April 05, 2016, 06:17:24 PM »
On union and professional fees. If my work reimburses me, I assume I can't claim this on my tax return? This is what I have been doing but wanted to double check.

Short answer? You are right

If done properly, there is a way to do it that leave very few traces and makes it difficult for CRA to find out. To each his own but its the kind of thing I do and if I got caugth someday, I will just pay back.
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption of its own habitat"

-MMM

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #560 on: April 06, 2016, 06:59:52 AM »
One of my coworker asked me this one because he knows I got a MMM forum acces to that famous CPA CB

His wife is from USA and she is now a permanent resident of Canada since November 2015

She receive a disability payment from the USA government and they are wondering if they have to include this in their Canadian tax report. On the other side of the border, the US governement told her they dont want anything (probably because the ammount is pretty small?)

Any clue?

Hey Le Barbu -

Famous? Haha. I'll take it!

In terms of Canada - Yes, she needs to report this income. She should also receive partial credit for the paid amount under the Canada-US Treaty, and also a credit on foreign tax payable.

In terms of the US - I'm certain she needs to file there as well. I have not once ever heard the IRS say "don't worry about filing your income tax this year". It's a requirement of all US Citizens to file, no matter where they live.

Hope this helps your colleague!

CPA CB

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #561 on: April 06, 2016, 07:05:10 AM »
On union and professional fees. If my work reimburses me, I assume I can't claim this on my tax return? This is what I have been doing but wanted to double check.

Short answer? You are right

If done properly, there is a way to do it that leave very few traces and makes it difficult for CRA to find out. To each his own but its the kind of thing I do and if I got caugth someday, I will just pay back.

It's not deductible - but many people will still claim it (not in practice, just generally).

There's a risk they'll find it, and you'll have to pay it back. This isn't really a significant risk. The bigger problem is that your returns may get flagged for further review and they will go through your last three years with microscope (and likely 2016 and 2017 if that's the case).

Cheers,

CPA CB

RidinTheAsama

  • Stubble
  • **
  • Posts: 111
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #562 on: April 06, 2016, 01:33:18 PM »
I just saw this other thread about US tax incentives for bike-commuting
http://forum.mrmoneymustache.com/reader-recommendations/how-to-get-a-tax-break-by-biking-to-work/?topicseen

Do we have anything similar in Canada?
I found this PBO review of a proposal to create something similar
http://www.pbo-dpb.gc.ca/web/default/files/files/files/Publications/Costing_C-466_EN.pdf

But couldn't find any confirmation that it ever came into existence.

Thanks!

Tawcan

  • 5 O'Clock Shadow
  • *
  • Posts: 25
  • Location: Vancouver, Canada
    • Tawcan
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #563 on: April 06, 2016, 03:17:47 PM »
On union and professional fees. If my work reimburses me, I assume I can't claim this on my tax return? This is what I have been doing but wanted to double check.

Short answer? You are right

If done properly, there is a way to do it that leave very few traces and makes it difficult for CRA to find out. To each his own but its the kind of thing I do and if I got caugth someday, I will just pay back.

It's not deductible - but many people will still claim it (not in practice, just generally).

There's a risk they'll find it, and you'll have to pay it back. This isn't really a significant risk. The bigger problem is that your returns may get flagged for further review and they will go through your last three years with microscope (and likely 2016 and 2017 if that's the case).

Cheers,

CPA CB

I see, better off just not claiming it as a reduction then. Thanks for your feedback.
Tawcan.com - quest for joyful life and financial independence

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #564 on: April 06, 2016, 03:48:22 PM »
I just saw this other thread about US tax incentives for bike-commuting
http://forum.mrmoneymustache.com/reader-recommendations/how-to-get-a-tax-break-by-biking-to-work/?topicseen

Do we have anything similar in Canada?
I found this PBO review of a proposal to create something similar
http://www.pbo-dpb.gc.ca/web/default/files/files/files/Publications/Costing_C-466_EN.pdf

But couldn't find any confirmation that it ever came into existence.

Thanks!

Correct, there is no deduction of this kind. The only thing "close" is the Public Transit one... For your regular general employee I can't foresee any circumstance where this could apply.

I don't foresee any real circumstance where this would be subsidized by the Gov't Federally as it would open a Pandora's box of other things. For example, I'm a runner, would I be able to deduct my running shoes if I run to the office then?

Just keep biking, saving money, and enjoying the outdoor time watching the rat racers stuck in traffic. That's payment enough!

Cheers

CPA CB




K-ice

  • Pencil Stache
  • ****
  • Posts: 676
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #565 on: April 07, 2016, 12:00:59 AM »
Thanks a lot for this link.

http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html

So if a single mom cashed out $15K in RRSP last year it now shows up as 2015 income.

Aside from that being one of the worst places to get money, I assume it will also hurt her for the amount of CCB she is eligible for next year, right?

I wish she could hit the UNDO button on the RRSP cash-out.

Agh Face Punch. It's a good friend & I've been trying to give her some tips. I had no idea she cashed these out. At the same time she contributed to her kids RESP because she wants to put her kids "needs" first.




Maya

  • Stubble
  • **
  • Posts: 194
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #566 on: April 09, 2016, 09:00:08 PM »
What would suggest to a 70+year old selling their business for under 100k.   RRSP room is pretty maxed out and they want to know what they should do to avoid taxes (well as much as possible). In Alberta.

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #567 on: April 10, 2016, 07:28:52 AM »
Thanks a lot for this link.

http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html

So if a single mom cashed out $15K in RRSP last year it now shows up as 2015 income.

Aside from that being one of the worst places to get money, I assume it will also hurt her for the amount of CCB she is eligible for next year, right?

I wish she could hit the UNDO button on the RRSP cash-out.

Agh Face Punch. It's a good friend & I've been trying to give her some tips. I had no idea she cashed these out. At the same time she contributed to her kids RESP because she wants to put her kids "needs" first.

That's correct, it will impact the CCB credit assuming she's over the initial bracket.

It makes no sense to withdraw RRSPs to contribute to RESPs. That is a real detriment to everyone.


CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #568 on: April 10, 2016, 07:30:11 AM »
What would suggest to a 70+year old selling their business for under 100k.   RRSP room is pretty maxed out and they want to know what they should do to avoid taxes (well as much as possible). In Alberta.

Depends really on the circumstances. The key here is to plan the sale to hit the qualified small business capital gains exemption so they pay zero tax on the sale of the business. Highly recommended they speak with an accountant as the savings potential here is significant.

Cheers

CPA CB

scrubbyfish

  • Guest
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #569 on: April 10, 2016, 11:49:25 PM »
Q: How do we know when we have all our investment tax slips?

I have a number of investment accounts, each with 3-4 holdings. But I've received only three T3s (two for CAD index, one for US index). Am I supposed to just wait some more weeks for more pieces of paper to arrive? Or do some accounts not create slips? Am I supposed to come up with the numbers for those? Or do some amounts not get submitted?

Definitely everyone has my correct address, there are no tax slips available in my online accounts, and TD's site says they mail them January through mid-March and that if I don't have them within 3 weeks of that...

And the government sent me a weird slip a while back, with a hodgepodge of names such that I don't know if they meant it for my son. I sent it back with a note, asking that if it was meant for my kid to please correct the name and send a replacement, but nothing to date.

Le Barbu

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 45
  • Location: Lévis, Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #570 on: April 11, 2016, 06:54:15 AM »
Q: How do we know when we have all our investment tax slips?

I have a number of investment accounts, each with 3-4 holdings. But I've received only three T3s (two for CAD index, one for US index). Am I supposed to just wait some more weeks for more pieces of paper to arrive? Or do some accounts not create slips? Am I supposed to come up with the numbers for those? Or do some amounts not get submitted?

Definitely everyone has my correct address, there are no tax slips available in my online accounts, and TD's site says they mail them January through mid-March and that if I don't have them within 3 weeks of that...

And the government sent me a weird slip a while back, with a hodgepodge of names such that I don't know if they meant it for my son. I sent it back with a note, asking that if it was meant for my kid to please correct the name and send a replacement, but nothing to date.

Usualy, T3/T5 slips are isued for taxable accounts only (not for RRSP, TFSA nor RDSP). For your registered accounts, you should only receive a contribution receip but if you already know your contributions amount, you will not learn anything new from this. Which account/contribution/holding do you think you miss a slip/receip?
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption of its own habitat"

-MMM

Posthumane

  • Bristles
  • ***
  • Posts: 304
  • Location: Alberta
    • Getting Around Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #571 on: April 11, 2016, 07:08:06 AM »
Q: How do we know when we have all our investment tax slips?

I have a number of investment accounts, each with 3-4 holdings. But I've received only three T3s (two for CAD index, one for US index). Am I supposed to just wait some more weeks for more pieces of paper to arrive? Or do some accounts not create slips? Am I supposed to come up with the numbers for those? Or do some amounts not get submitted?

Definitely everyone has my correct address, there are no tax slips available in my online accounts, and TD's site says they mail them January through mid-March and that if I don't have them within 3 weeks of that...

And the government sent me a weird slip a while back, with a hodgepodge of names such that I don't know if they meant it for my son. I sent it back with a note, asking that if it was meant for my kid to please correct the name and send a replacement, but nothing to date.

Usualy, T3/T5 slips are isued for taxable accounts only (not for RRSP, TFSA nor RDSP). For your registered accounts, you should only receive a contribution receip but if you already know your contributions amount, you will not learn anything new from this. Which account/contribution/holding do you think you miss a slip/receip?
Also, I found out that my bank won't create a tax slip for a taxable account if the amount gained is less than $50. I don't know if this is a common practice across institutions or not.

Le Barbu

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 45
  • Location: Lévis, Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #572 on: April 11, 2016, 08:19:32 AM »
Q: How do we know when we have all our investment tax slips?

I have a number of investment accounts, each with 3-4 holdings. But I've received only three T3s (two for CAD index, one for US index). Am I supposed to just wait some more weeks for more pieces of paper to arrive? Or do some accounts not create slips? Am I supposed to come up with the numbers for those? Or do some amounts not get submitted?

Definitely everyone has my correct address, there are no tax slips available in my online accounts, and TD's site says they mail them January through mid-March and that if I don't have them within 3 weeks of that...

And the government sent me a weird slip a while back, with a hodgepodge of names such that I don't know if they meant it for my son. I sent it back with a note, asking that if it was meant for my kid to please correct the name and send a replacement, but nothing to date.

Usualy, T3/T5 slips are isued for taxable accounts only (not for RRSP, TFSA nor RDSP). For your registered accounts, you should only receive a contribution receip but if you already know your contributions amount, you will not learn anything new from this. Which account/contribution/holding do you think you miss a slip/receip?
Also, I found out that my bank won't create a tax slip for a taxable account if the amount gained is less than $50. I don't know if this is a common practice across institutions or not.

I also found that some bank dont send slips by mail but they are available in you account as pdf file or equivalent
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption of its own habitat"

-MMM

scrubbyfish

  • Guest
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #573 on: April 11, 2016, 08:57:14 AM »
Which account/contribution/holding do you think you miss a slip/receip?

I don't know, that's really my question: Which ones are "missing" and which ones are just not supposed to exist? I just have three slips that say either "Cdn index" or "US index". But I don't know for what account, if those are all taxable Cdn index holdings added up, or just one, or? Are we not reporting gains on rest-of-world index? Etc. Bah. My online accounts say there are no tax slips.

Posthumane: Yes, I have found this to be so. We're apparently supposed to claim the amounts under $50 too, but institutions aren't required to send out slips for that amount so many don't. I find this frustrating in reporting bank interest income. In my case, each of the investments should be over that, though.

Le Barbu

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 45
  • Location: Lévis, Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #574 on: April 11, 2016, 10:21:52 AM »
Which account/contribution/holding do you think you miss a slip/receip?

I don't know, that's really my question: Which ones are "missing" and which ones are just not supposed to exist? I just have three slips that say either "Cdn index" or "US index". But I don't know for what account, if those are all taxable Cdn index holdings added up, or just one, or? Are we not reporting gains on rest-of-world index? Etc. Bah. My online accounts say there are no tax slips.

Posthumane: Yes, I have found this to be so. We're apparently supposed to claim the amounts under $50 too, but institutions aren't required to send out slips for that amount so many don't. I find this frustrating in reporting bank interest income. In my case, each of the investments should be over that, though.

You should know wicha account you actually have, wich holding in each and wich transactions occured through 2015. OK, lets say you got a RRSP, then the form you may need is the receip (if you contributed between Jan 1st 2015 and Feb 29th 2016). For a RESP, you dont need anything. For a RDSP, well I dont know...

Do you have a taxable account with some investments in?

You are the best (and only) one person to take care of this paper tracking task.
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption of its own habitat"

-MMM

scrubbyfish

  • Guest
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #575 on: April 11, 2016, 10:39:33 AM »
Thanks, Le Barbu.

Anyone know if there's a chart or webpage that details what types of investment accounts need what info submitted?

Le Barbu

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 45
  • Location: Lévis, Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #576 on: April 11, 2016, 12:59:33 PM »
Thanks, Le Barbu.

Anyone know if there's a chart or webpage that details what types of investment accounts need what info submitted?

Scrubby, you are so sweet!

The only accounts requiring form/slips are the taxable ones
"The real reason this blog exists, is simply to save the entire human race from destroying itself through overconsumption of its own habitat"

-MMM

Sarnia Saver

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #577 on: April 11, 2016, 04:45:42 PM »
Scrubby,

You should perhaps take a look at your brokerage/bank of choice and see if they have an all in one solution, such as a target date fund or an index mutual fund basket such as http://www.mawer.com/our-funds/fund-profiles/tax-effective-balanced-fund/ to reduce the complexity of your tax situation in your taxable accounts.  Having multiple accounts, across multiple platforms, in multiple formats can be overwhelming for a large amount of people.  Simpler is almost always best for most people.

As stated by other people, no taxable gains forms are coming for the RESP, that gets taxed in the student's hands when withdrawn, the RRSP, full withdrawal amount taxable as income, or the RDSP, uncertain on rules.  Once you have your RRSP contribution slips and the t3/t5, that should be it.
« Last Edit: April 11, 2016, 04:49:38 PM by Sarnia Saver »

lostamonkey

  • Bristles
  • ***
  • Posts: 438
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #578 on: April 11, 2016, 05:21:27 PM »
Q: How do we know when we have all our investment tax slips?

I have a number of investment accounts, each with 3-4 holdings. But I've received only three T3s (two for CAD index, one for US index). Am I supposed to just wait some more weeks for more pieces of paper to arrive? Or do some accounts not create slips? Am I supposed to come up with the numbers for those? Or do some amounts not get submitted?

Definitely everyone has my correct address, there are no tax slips available in my online accounts, and TD's site says they mail them January through mid-March and that if I don't have them within 3 weeks of that...

And the government sent me a weird slip a while back, with a hodgepodge of names such that I don't know if they meant it for my son. I sent it back with a note, asking that if it was meant for my kid to please correct the name and send a replacement, but nothing to date.

If you register for "My account" on the CRAs website, you are able to see all your T3s to confirm that you have all of them.

daverobev

  • Handlebar Stache
  • *****
  • Posts: 2442
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #579 on: April 11, 2016, 05:25:22 PM »
It is not a legal req to send a T5 if the distribution is less than $50. Some companies do it anyway, some don't. If they don't, you have to fill in the numbers yourself (usually simple).

I'd agree that having a single brokerage makes life easy. And single fund/ETF per category (ie one for emerging, one for developed, etc). Oh, the benefits of hindsight.

This year you should be able to connect your tax software to your 'MyAccount' CRA... account. It'll download and auto-fill a lot of stuff.

In terms of dates, T3s are due 90 days into the year (technically March 30th this year? Whatever.. I got mine on April Fool's day). T5s are due by the end of Feb I think. So you should certainly have everything you're going to get by now!

Filed ours last week. Au revoir, Family Tax Cut. You saved us a bit of cash. Au revoir, UCCB - you cost us some (well, not really, but we had to pay back a bit). Bonjour, CTB! You are much more generous, and while I think it's crazy to throw money at families earning $90k, whatever. The ONLY thing I dislike is that it's a year behind your actual circumstances - we did ok last year, so we get CTB reduced - but this year we are going to do much worse. So NEXT year we'll get a massive increase in CTB.. when we may or may not be earning more.

Well, I guess most people's salaries don't change dramatically - those that get salaries. Neither of us do, so income fluctuates wildly.
Great Canadian Rebates (cashback on credit card signups) || Tangerine Orange Key: 48322202S1 (free $50, free chequing/savings)
Ebates (US) free $10

scrubbyfish

  • Guest
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #580 on: April 11, 2016, 06:13:33 PM »
Thank you both!

My tax accountant today, too, said that all R (including RDSP) accounts, as well as TFSA, are not taxable, thus will have no slips. So, that just leaves two. Yeah, my accounts are as few as they can be for optimization. In most, I have just the Canadian Couch Potato four holdings, but one agency requires that I have a second institution, and one account requires two funds in place of the CCP ones. Agency rules for people with disabilities, unfortunately, but worth the extra work. So, all optimized, but my first tax year in them, so I didn't know why so few slips had come and whether I could proceed. Now I do, thank you :)

Peanutty

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #581 on: April 14, 2016, 11:41:45 AM »
This thread is amazing. We are getting close (I think) to FI and I'm trying to get myself up to speed on all things Canadian tax because I've been blissfully (willfully?) ignorant about most of the details until recently. I've been reading through this thread and also reading a lot on taxtips.ca.

So, question for the experts: If I live in AB, and I have an actual eligible dividend income of say, $35,000 per year. If that is my ONLY source of income - is my tax rate 0% (or technically -0.03%)? It seems too good to be true so I feel like I must be missing something. What if I had $30,000 per year of eligible dividend income and my spouse also had $30,000 per year of eligible dividend income, and those were our ONLY sources of income. 0% tax rate?? Or would the combined dividend income put us over the threshold and into the next tax bracket?

Thanks in advance (and sorry if this question is dumb!!)

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #582 on: April 14, 2016, 01:21:31 PM »
This thread is amazing. We are getting close (I think) to FI and I'm trying to get myself up to speed on all things Canadian tax because I've been blissfully (willfully?) ignorant about most of the details until recently. I've been reading through this thread and also reading a lot on taxtips.ca.

So, question for the experts: If I live in AB, and I have an actual eligible dividend income of say, $35,000 per year. If that is my ONLY source of income - is my tax rate 0% (or technically -0.03%)? It seems too good to be true so I feel like I must be missing something. What if I had $30,000 per year of eligible dividend income and my spouse also had $30,000 per year of eligible dividend income, and those were our ONLY sources of income. 0% tax rate?? Or would the combined dividend income put us over the threshold and into the next tax bracket?

Thanks in advance (and sorry if this question is dumb!!)

Hi there & welcome!

You'll go Peanutty for this response then - as long as there is no other income, you and spouse can go up to $50k (each!) in eligible dividends before you're paying personal tax.

Just want to point out that these dividends are 'net' of corporate taxes paid (which are over 30%) so you as a shareholder are not paying 'no tax' - it's just that you don't see this side of the transaction personally.

Glad you like this topic!

CPA CB

daverobev

  • Handlebar Stache
  • *****
  • Posts: 2442
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #583 on: April 14, 2016, 02:09:18 PM »
This thread is amazing. We are getting close (I think) to FI and I'm trying to get myself up to speed on all things Canadian tax because I've been blissfully (willfully?) ignorant about most of the details until recently. I've been reading through this thread and also reading a lot on taxtips.ca.

So, question for the experts: If I live in AB, and I have an actual eligible dividend income of say, $35,000 per year. If that is my ONLY source of income - is my tax rate 0% (or technically -0.03%)? It seems too good to be true so I feel like I must be missing something. What if I had $30,000 per year of eligible dividend income and my spouse also had $30,000 per year of eligible dividend income, and those were our ONLY sources of income. 0% tax rate?? Or would the combined dividend income put us over the threshold and into the next tax bracket?

Thanks in advance (and sorry if this question is dumb!!)

This site is good for info on stuff like that: http://www.taxtips.ca/taxrates/ab.htm

Note that you do NOT want to have 100% Canadian equity!!
Great Canadian Rebates (cashback on credit card signups) || Tangerine Orange Key: 48322202S1 (free $50, free chequing/savings)
Ebates (US) free $10

Retire-Canada

  • Magnum Stache
  • ******
  • Posts: 3611
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #584 on: April 20, 2016, 06:32:42 AM »
This site is good for info on stuff like that: http://www.taxtips.ca/taxrates/ab.htm

Note that you do NOT want to have 100% Canadian equity!!

Yes paying zero tax is attractive for a number of reasons, but if you have to take on a huge amount of portfolio performance and volatility risk to do so it's not a great idea. Canada is a tiny slice of the global economy so holding even 20% - 30% CDN equities is a significant home country bias. Going to 100% to lower your tax rate to zero is a bad trade off.

That said presumably you have investments in your RRSP accounts and likely in a TFSA as well as your non-registered accounts. You'll only have to worry about the tax rate on qualified dividends from the Non-reg accounts. You're going to pay tax on any RRSP withdrawal as income no matter how it was realized within the accounts and any withdrawals from your TFSA will not be taxed no matter what.
« Last Edit: April 20, 2016, 08:59:18 AM by Retire-Canada »

Retire-Canada

  • Magnum Stache
  • ******
  • Posts: 3611
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #585 on: April 20, 2016, 06:51:36 AM »
I've got a question I'm curious about. I filed my 2015 tax return early thinking I knew what my dividend situation was in my Non-Reg account. Turns out I was off a bit due to never having had a Non-Reg account prior to 2015. I reported $17 in qualified CDN dividends and actually had $34 once I got my tax slip from my brokerage. I had no other dividends as the rest of my $$ were in RRSP/TFSA accounts.

I have a cogent reason for why I used $17 that I could explain to CRA for the error should they ask.

I've submitted my return and got my Notice of Assessment back.

My income after business deductions [self-employed] was in the $55K - $60K range.

I'm not worried about the legal answer or the perfect answer, but rather from a practical point of view is there any compelling reason to revise my tax return to adjust it by $17 of dividends which is a difference of something like 0.03% of my after deductions income?
« Last Edit: April 20, 2016, 08:57:27 AM by Retire-Canada »

CPA CB

  • Stubble
  • **
  • Posts: 204
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #586 on: April 20, 2016, 07:17:26 AM »
I've got a question I'm curious about. I filled my 2015 tax return early thinking I knew what my dividend situation was in my Non-Reg account. Turns out I was off a bit due to never having had a Non-Reg account prior to 2015. I reported $17 in qualified CDN dividends and actually had $34 once I got my tax slip from my brokerage. I had no other dividends as the rest of my $$ were in RRSP/TFSA accounts.

I have a cogent reason for why I used $17 that I could explain to CRA for the error should they ask.

I've submitted my return and got my Notice of Assessment back.

My income after business deductions [self-employed] was in the $55K - $60K range.

I'm not worried about the legal answer or the perfect answer, but rather from a practical point of view is there any compelling reason to revised my tax return to adjust it by $17 of dividends which is a difference of something like 0.03% of my after deductions income?

Nope - leave it be. Worst case you get re-assessed.


Retire-Canada

  • Magnum Stache
  • ******
  • Posts: 3611
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #587 on: April 20, 2016, 08:58:20 AM »
Nope - leave it be. Worst case you get re-assessed.

Thank you for the reply. That was my thought as well.

Sarnia Saver

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #588 on: April 23, 2016, 05:56:36 PM »
Thinking of having solar panels installed and enrolling in the micro-FIT program.  'Problem" is that I am in a high tax bracket and the government will take 43% of the income I receive through this program.  My wife is a SAHM and has no income.  Is it illegal to take the income from the panels in her name if the panels are installed in her name?  The home is under both of our names.  Also, are we able to do a capital depreciation on it over the 20 year life of the contract in order to have less impact to CCB via our family income?

lostamonkey

  • Bristles
  • ***
  • Posts: 438
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #589 on: April 23, 2016, 06:39:43 PM »
Wow, if you earn $50K in Alberta, have 4 kids, and have a stay at home spouse your effective tax rate is 53.5% (20.5% federal +10% provincial+23% CTB) which is pretty insane.

Sarnia Saver

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #590 on: April 24, 2016, 05:30:31 PM »
23% CTB?  Not sure what you mean.  Marginal rate for 90-140 k in Ontario is 43.4%  In Alberta the marginal rate up to 125k is 30.5%.

The CTB I'm thinking of is the Child Tax Benefit, which gives money back to you.  Our hot young Prime Minister has done away with that for 2nd half of 2016, replacing it with the Canada Child Benefit.  That situation you referred to, 50k Income, 4 kids (guessing 2 under 6), would give the family $19,000 tax free from the government.  This is actually less than the family would pay in income taxes. 

lostamonkey

  • Bristles
  • ***
  • Posts: 438
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #591 on: April 24, 2016, 06:35:50 PM »
I meant the Canada child benefit, I just used the wrong abbreviation. At that income level, you lose 23 cents in your next year's benefit payout for every additional dollar of income you earn so you have to add 23% to your effective tax rate.

daverobev

  • Handlebar Stache
  • *****
  • Posts: 2442
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #592 on: April 24, 2016, 07:55:34 PM »
I meant the Canada child benefit, I just used the wrong abbreviation. At that income level, you lose 23 cents in your next year's benefit payout for every additional dollar of income you earn so you have to add 23% to your effective tax rate.

A family with four children under six is getting $1750 a month in CTB... $21K a year. Not sure if you're complaining, because $21k seems pretty generous.
Great Canadian Rebates (cashback on credit card signups) || Tangerine Orange Key: 48322202S1 (free $50, free chequing/savings)
Ebates (US) free $10

lostamonkey

  • Bristles
  • ***
  • Posts: 438
  • Location: Canada
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #593 on: April 24, 2016, 08:24:31 PM »
I meant the Canada child benefit, I just used the wrong abbreviation. At that income level, you lose 23 cents in your next year's benefit payout for every additional dollar of income you earn so you have to add 23% to your effective tax rate.

A family with four children under six is getting $1750 a month in CTB... $21K a year. Not sure if you're complaining, because $21k seems pretty generous.

No, I already think the benefits are too generous. I just meant that at that tax rate there is a serious disincentive to work any extra overtime hours.

Sarnia Saver

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #594 on: April 24, 2016, 11:19:19 PM »
I didn't believe you but their online calc says it's true. Still a mustachian would work the OT and place the extra into an RRSP so their marginal wasn't effected by CCB.

TorontoDeveloper

  • 5 O'Clock Shadow
  • *
  • Posts: 23
  • Age: 26
  • Location: Toronto
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #595 on: April 25, 2016, 07:12:53 AM »
My now wife and I were confused about the common law rules and filed as Single in 2013 when we should have filed as Common Law. I want to correct that now, and it would result in some money being refunded to us. I've called the CRA, but the agent sounded confused, and the advice that he gave just doesn't work. (He suggesting using MyCRA "Change My Marital Status", but it won't let me make a change for 2013). Do you know how I can correct this?

Prairie Stash

  • Pencil Stache
  • ****
  • Posts: 941
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #596 on: April 25, 2016, 09:36:46 AM »
My now wife and I were confused about the common law rules and filed as Single in 2013 when we should have filed as Common Law. I want to correct that now, and it would result in some money being refunded to us. I've called the CRA, but the agent sounded confused, and the advice that he gave just doesn't work. (He suggesting using MyCRA "Change My Marital Status", but it won't let me make a change for 2013). Do you know how I can correct this?
http://www.cra-arc.gc.ca/changereturn/

You can refile your tax returns. I made a mistake and refilled for  previous year to receive an extra refund. The T-1 ADJ form is pretty simple, but I think you'll both need to file the form.

Basically redo your taxes but use common-law. Then the T-1 ADJ gets filled out with the differences and you're done, should take less than an hour. 

Prairie Stash

  • Pencil Stache
  • ****
  • Posts: 941
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #597 on: April 25, 2016, 10:40:17 AM »
I didn't believe you but their online calc says it's true. Still a mustachian would work the OT and place the extra into an RRSP so their marginal wasn't effected by CCB.
I have the same thought, but it's still a disincentive. It depends on whether the OP already maxes out the RRSP. If the RRSP is already maxed the marginal rate is then 48.46% of each additional dollar earned is lost. You can't place a full $1000 of extra earnings into a RRSP that's already maxed just 18%.

By having the high claw back there's serious thought to having a stay at home parent. A low wage second earner might lose more on claw backs and child care than would be gained from wages. Since its based on household income its a unique situation where the second earner loses benefits at a rate of 23% (17.96% if RRSP room is utilized) on top of tax rates. The take away is to plan taxes as a family unit, not just at the individual level.

On a personal level the question becomes is it better to work OT or spend time with the family? An extra hour work, assuming pay of $25/hour, at 1.5 is worth $37.50. After tax and claw back the OP gets $18.23 take home (CPP, EI are maxed out from regular earnings). A normal hour is worth $17.38 before CCB reduction, but you don't have a choice on working those so the clawbacks on CCB aren't optional. I'm in that situation, do I forgo OT or take it? Is it better to work 6 months longer or more OT over the next 4 years? The goal is to work as few hours as possible until FIRE and maximize my hours away from work.

TorontoDeveloper

  • 5 O'Clock Shadow
  • *
  • Posts: 23
  • Age: 26
  • Location: Toronto
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #598 on: April 26, 2016, 07:45:36 AM »
My now wife and I were confused about the common law rules and filed as Single in 2013 when we should have filed as Common Law. I want to correct that now, and it would result in some money being refunded to us. I've called the CRA, but the agent sounded confused, and the advice that he gave just doesn't work. (He suggesting using MyCRA "Change My Marital Status", but it won't let me make a change for 2013). Do you know how I can correct this?
http://www.cra-arc.gc.ca/changereturn/

You can refile your tax returns. I made a mistake and refilled for  previous year to receive an extra refund. The T-1 ADJ form is pretty simple, but I think you'll both need to file the form.

Basically redo your taxes but use common-law. Then the T-1 ADJ gets filled out with the differences and you're done, should take less than an hour.
Thanks Prairie Stash! We will do that this weekend.

Cannot Wait!

  • Pencil Stache
  • ****
  • Posts: 753
  • Age: 50
  • Location: Canada
  • FIREd 2016 @ 49
Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #599 on: April 27, 2016, 10:19:34 AM »
CPA CB, I think you are wonderful!
Can you weigh in on my situation please?
http://forum.mrmoneymustache.com/ask-a-mustachian/er-take-pension-now-or-later/msg1066311/#msg1066311
806228541398102 is my referral code for Questrade and 48650126S1 for Tangerine.  Hey, why not?