Davidow & Nelson Blog

New Relief Procedures: U.S. EXPATRIATES

On September 6, 2019, the IRS announced Relief Procedures for Certain Former Citizens, a new process to facilitate eligible individuals in becoming compliant with their U.S. tax obligations, in conjunction with renouncing their U.S. citizenship (IR-2019-151). There was no announced specified termination date; however, a closing date will be announced in the future.Eligible individuals will… Read more »

Costs and Rebates: FEDERAL CARBON TAX

On December 16, 2019, the Department of Finance announced the climate action incentive payment amounts for 2020. These payments are associated with the provinces that are subject to the federal backstop legislation. The following amounts may be claimed on the 2019 personal tax returns: Category Ontario Manitoba Saskatchewan Alberta Single adult/first adult in a couple… Read more »

Loss of the Small Business Deduction?: MOBILE HOMES, RV PARKS, CAMPGROUNDS

In an August 29, 2019 Tax Court of Canada case, at issue was whether the taxpayer who operated a mobile home/RV park was eligible to claim the small business deduction for the 2012-2014 years. CRA argued that the taxpayer primarily earned its income from the rental of seasonal and extended seasonal campsites and the storage… Read more »

The 20 Hours Test: TAX ON SPLIT INCOME

The tax on split income (TOSI) can subject various income sources, with taxable private corporation dividends being the most common, to personal tax at the highest marginal rate. One of the exceptions from TOSI occurs when the income recipient is actively engaged in the business. An individual will be deemed to be actively engaged in… Read more »

Do they Trigger Payroll Audits?: CPP/EI RULINGS

In a June 7, 2019 Technical Interpretation, CRA commented on whether a CPP/EI ruling triggers follow-up assessing and review. These rulings often determine whether a worker is a contractor or employee, and therefore whether EI and/or CPP should be submitted to CRA. They also often consider whether an employee that is a family member of… Read more »

Shareholder-Employees: TRAVEL EXPENSES

For an employee to deduct travel or motor vehicle expenses against employment income, the employee must be normally required to work away from the employer’s place of business, be required to pay the travel expense under the contract of employment, and have a signed and completed T2200. Also, the employee cannot receive an allowance excluded… Read more »

Costs of an Assistant: EMPLOYMENT EXPENSES

A November 5, 2019 Tax Court of Canada case reviewed the deductibility of employment expenses by a manager overseeing the Canadian sales force and operations of a multinational manufacturer of dental instruments and products. The taxpayer’s employer had no Canadian office, and she travelled extensively to meet with sales representatives, dealers and customers throughout Canada.Expense… Read more »

Total Kilometres Driven: MOTOR VEHICLE EXPENSES

In a September 17, 2019 Tax Court of Canada case, at issue was the deductibility of vehicle expenses, and in particular, the portion of total vehicle use that was for employment purposes. While initially challenged by CRA, the Court eventually accepted the credit card statements as support for the amounts expended. The taxpayer held and… Read more »

Step-Child: ADOPTION EXPENSES

In a June 20, 2019 Technical Interpretation, CRA was asked whether a taxpayer legally adopting the child of his or her common-law partner would be eligible to claim the costs under the adoption expense tax credit ($16,255 @ 15% for 2019). CRA opined that the credit could be claimed by the adoptive parent, but not… Read more »

TAX TICKLERS… some quick points to consider…

The amount of income an individual can earn without paying tax (basic personal amount) will begin increasing in 2020. In the first year, it will rise to $13,229 (from $12,069 in 2019), and will reach $15,000 in 2023. The benefit will begin to be phased out when an individual has earnings of approximately $150,000. The… Read more »