Non-Resident tax

Taxes in Canada for Non-Residents Earlier we discussed who pay taxes in Canada; determining residency is an important factor; to decide what income and how much income is subject to Canadian income tax. Once you determine you are Non-Resident or deemed resident for the Canadian tax purpose, next question is what income you have to report and how you report that income in your personal income tax return? What are your tax obligations in Canada towards tax system? If you leave Canada, that si...
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Medical Expense Tax Credit

Medical Expense Tax Credit Medical expense tax credit is available to individuals who incurred medical expenses for themselves, spouse or their dependents. Medical expenses can be claimed on personal tax return or spouse’s tax return. This is a non-refundable tax credit which reduces income tax liability. When both spouses have income, it is advisable to claim medical expenses on the return with the lower income. Individuals with low income who have incurred substantial amount of medical ex...
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Canada Child Benefit

Canada Child Benefit The Canada Child Benefit (CCB) was introduced in 2016 federal budget; this was a replacement of Enhanced child care benefit (UCCB) and Canada child tax benefit (CCTB). The proposal later received royal assent on June 22, 2016 under bill C-15. CCB program came in to effect from July 1, 2016 and eligible families receive monthly payments since then. Eligibilities for CCB: In order to be eligible for the Canada Child Benefit (CCB), you must meet all following conditions: ...
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NEW RULES FOR ELIGIBLE CAPITAL PROPERTY

NEW RULES FOR ELIGIBLE CAPITAL PROPERTY In 2014 federal budget, government announced first proposal of repealing Eligible Capital Property regime. Draft legislation was finally introduced in 2016 federal budget for the changes and generally takes effect on January 1, 2017. New rules are replacing Eligible Capital Property rules with Capital Cost Allowance (CCA). Eligible Capital Property: Most common examples of Eligible Capital Properties are customer lists, brands, goodwill, franchisee, ...
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Employee Vs Self-Employed

Employee Vs Self-Employed To determine whether an individual is a self-employed person or employee, following factors must be considered. Economic reality or entrepreneur test Integration or organization test Specific result test Economic reality or entrepreneur test : This factor can be further divided in to 3 sub factors. (a) Control Factor - This factor determines that if someone who is in position to give orders, instructions or direct individual; not only what needs to be d...
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Who has to pay tax in Canada?

Who has to pay tax in Canada? Anybody who is resident of Canada is subject to income tax in Canada. Key issues determining the residency of an individual: Individual's residency is very important to determine what income and how much income is subject to Canadian income tax. Generally individuals are clearly resident or non-residents for Canadian tax system. However, there are situations where further information requires, such as: Individual immigrate (arrival to Canada) to Canada.  ...
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KEY TAX PLANNING STRATEGIES FOR 2015

KEY TAX PLANNING STRATEGIES FOR 2015 There are many tax planning strategies to reduce taxes but here are a few of them: 1.    When you are on pension, you can split your pension income up to 50% of the income with your spouse and lower your overall tax bill and avoiding claw back on Old Age Security(OAS) for both or one of the spouse. In addition, both spouses can claim pension tax credit.  Pension split can be done using the CRA form T1132 – Joint Election to Split Pension Income. 2.    Ch...
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Capital Gains or Income?

Many people constantly wonder whether to have earned income for tax purpose or realize a Capital Gain!!!  Distinction between Capital Gain and Income is very important because Capital Gain is only half taxed. Capital property is where gain is only half taxed (referred to as “Taxable Capital Gain”) at one’s regular marginal income tax rate.  Not all gains are capital gains tax.  For example, if you buy and sell multiple properties during the year, your income will be considered business income...
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Reconciling 2015 (tax treatment)

Now that the year is almost over, let’s plan on having an effective tax strategy to save some money in 2015. Here are some check points to consider: First and foremost à Have you paid your installment yet? December 15th is the last installment tax deadline...if you have not done so yet, please to on or before December 2015. Investments à if you are thinking of selling your investment with losses, this is the time. Do so before 2015 so that you can confirm your settlement date. RRSPà i...
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How much can I contribute to my TFSA?

in 2009, federal government introduced Tax Free Savings Account (TFSA) for every Canadian resident who is at least 18 years of age or above. When introduced till 2012, the contribution limit was $5,000 per annum which increased to $5,500 for the years 2013 and 2014. On June 23, 2015, the limit was increased to $10,000 per annum for the year 2015 and later. Any income earned in TFSA is not taxed. If you have not made any contribution till date, you will have a cumulative limit of $41,000 till ...
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