Davidow & Nelson Blog

Personal Tax Deductions: EMPLOYEES WORKING FROM HOME DURING COVID-19

Due to the COVID-19 pandemic, many employees worked from home during a portion of 2020. On December 15, 2020, CRA released guidance on two new options available for employees claiming expenses related to working from home on their personal tax return. While this will clearly impact an employee’s personal tax filing, it should also be… Read more »

More COVID-19 Support: CANADA EMERGENCY RENT SUBSIDY

The Canada Emergency Rent Subsidy (CERS) provides a federal subsidization of expenses associated with both commercial rental payments and property ownership. The program commenced on September 27, 2020 and is scheduled to continue until June 2021. The CERS program parallels the Canada Emergency Wage Subsidy (CEWS) program in that it is largely based on the… Read more »

Public Listing of Applicants: CANADA EMERGENCY WAGE SUBSIDY

On December 21, 2020, CRA launched the Canada Emergency Wage Subsidy (CEWS) Employer Search, which allows users to search a listing of 340,000 CEWS applicants. The results, which are updated daily, display the legal name, operating/trade name, or business number of corporations (other types of entities are not listed) that have been approved for the… Read more »

Rollover to a Child or Grandchild’s RDSP: RRIF/RRSP ON DEATH

Normally we think about rolling RRIFs and RRSPs to the surviving spouse upon death, however, there are other options. One such option is to roll it on a tax-deferred basis to a child or grandchild’s Registered Disability Savings Plan (RDSP). A June 26, 2020 Technical Interpretation discussed the ability to roll funds from a deceased… Read more »

IRS Starting Compliance Work: U.S. TRANSITION TAX

In general, U.S. shareholders were required to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States. This tax could apply to a U.S. citizen, resident or Green Card holders who own an interest in a private Canadian corporation. This… Read more »

Directors can be Personally Liable: UNREMITTED GST/HST OR SOURCE DEDUCTIONS

Directors can be personally liable for employee source deductions (both the employer and employee’s portion of CPP and EI, and income tax withheld) and GST/HST unless they exercise due diligence to prevent failure of the corporation to remit these amounts on a timely basis. As many businesses are struggling with cashflow, it may be attractive… Read more »

Statute-Barred Periods: UNREPORTED INCOME

In a June 10, 2020 French Court of Quebec case, the taxpayer had been assessed with unreported income of $68,162, $66,192 and $31,540 for 2004, 2005 and 2006, respectively, all beyond the normal reassessment period (generally 3 years). The amounts were computed using the cash flow analysis method, meaning that cash received was considered taxable… Read more »

The Cost Could Be Very High: COMMINGLING OF PERSONAL EXPENSES IN THE BUSINESS

In a July 23, 2020 Tax Court of Canada case, at issue were a number of expenses claimed by the taxpayers (a corporation and its sole individual shareholder) in respect of the business of selling financial products and providing financial planning advice. CRA denied various expenses spanning 2007 and 2008 and assessed many of them… Read more »

Moving, Medical and More!: REASONABLE MEAL ALLOWANCES

On September 3, 2020, CRA announced that, effective January 1, 2020, the rates allowable under the simplified method related to travel for medical expenses, moving expenses, and the northern residents deduction, as well as meal claims for transport employees, increased to $23 from $17 per meal, for a total of $69/day. This is also the… Read more »

TAX TICKLERS… some quick points to consider…

-In 2021, four special payments to recipients of the Canada Child Benefit, totaling up to $1,200 per child under age six, will be made. -The Canada Emergency Wage Subsidy has been extended to June 2021. Details are still pending for periods after March 2021. – CRA has required Coinsquare, a cryptocurrency trading platform, to provide… Read more »