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No doubt, filing tax returns under the Canadian tax system is not as easy as it should be due to its complexity and, countless calculations particularly for tax payers in the lower income bracket. more complex and therefore, adds to the cost of filing tax returns. There is an extensive list of tax credits, deductions, and other tax expenditures which makes this system complicated. However, we at 20-Dollar Tax are on a mission to help clients file their taxes by providing them the best quality services through our professional experience and expertise. We are effective and efficient at what we have to offer to our clients.

Canadian tax system is complicated but not any more complicated than other countries around the world with similar economic size and model. Tax system are designed to include a wide range of scenarios and then represent current economic and political conditions and the future plans of the country. If you combine everything, you will get a very complicated system.

Canadian tax system is complex but the good new is that there is a lot of help and ruling available to made simple and effective decisions.

Eligible Dependant can be your parent or grandparent, sons, daughters, brothers, sisters by blood, marriage or adoption. If the dependant is not the parent or grandparent, the dependant must be under the age of 18 at the end of the year or 18 years of age or older with an impairment in physical or mental functions.

Eligible dependant: One claim per household. You cannot split the amount with another taxpayer for the same dependant.

An individual who is single, separated, divorced, widowed and supporting a dependent.

Dependent must be living with you in a home you maintain. Support payments do not qualify for the claim. Tax credit is reduced by dependent’s net income. Dependent’s net income must be less than basic personal amount plus $2295 if dependent is physically or mentally impaired.

Filing your tax returns yourself can be a little stressful at times. As professionals, we are not only filing your tax returns but also helping you plan your future. Professionals Accountants constantly review latest rules and guidelines released by CRA to guide their clients. Professional accountants can prevent errors in the return filing Professionals provide you with the peace of mind.

A professional accountant is bounded by professional code of ethics and therefore it will be in their best interest as well as your best interest that your taxes are filed accurately and in compliance with the law.

Our knowledge of the subject matter and our client-first attitude make us stand out in the competition.

According to CRA, the tax payer can go back up to 10 years to file tax returns. If you do not file your tax returns by the deadline each assessment year, you will be entitled to penalty as well as compound interest on unpaid taxes and also you might not receive the benefits you are entitled to even if you don’t owe the CRA any money. Late tax filing penalty is 5% of the tax year’s balance owing + 1% interest on balance owing each month your tax return is late up to maximum of 12 months. If the tax payer filed tax returns late in the past 3 years or if the tax payer fails to file taxes second time, these penalties will increase to 10% of balance owing PLUS 2% interest on balance owing for each month the return is late up to maximum of 20 months. It is always advisable to file the tax returns every year by the deadline even if the tax payer does not owe any money to the CRA.

You can claim the amount spent on Air Filter, Cleaner, Purifier if medically required*

It is generally preferred for the spouse with lower net income to claim the medical expenses as long as they have enough tax payable to offset it.

If you have received Canada Emergency Response Benefit (CERB) payments last year, know that it is a taxable benefit. You may have to pay tax on them.

For your current year’s RRSP contributions, you can contribute up to your current year’s contribution limit plus any previously accumulated amount.

You can claim some expenses such as snacks for passengers, USB chargers/cables, or even separate cell phones for Uber.

QuickBooks and Xero are the two most common soft wares. They are easily available; they have a lot of features and apps that can get linked the software and they are cloud based which means you can access them from any where. Their down side is that they may not fit your business need without making some compromises or work around.

It depends on your source of income, nature of income and personal situation. In a very general speaking, ensure you have your T4 slip, if you have day care expenses, donations or medical expenses, ensure you have proper receipts. You can down load an income tax check list from our web site for more detail’s items.

For income tax purposes, you should keep all the receipts and documents for the income and expenses you are claiming. According to CRA, a bank statements does not substitute for a receipt regardless of how clearly the transactions is showing.

Tax should never be paid on an estimate. It is the responsibility of the tax payer to calculate their taxable income and report it to the CRA and the taxable income must be backed by invoices and receipts. If you prior year’s tax liability was over $3,000, you are required to make regular installment payments. These installment payments are an estimate for your current year’s tax liability but income tax act and CRA provides a guideline to calculate these estimated installment payments. A wrong estimate may create an interest.

From business operations point of view, cash flow management means balancing your cash inflow with cash out flow or in other words striking a balance between payables and receivables. Some common techniques include encouraging payment on delivery, sending invoices on time, sending reminders where necessary, always monitor credit limits, use factoring services where possible.

Employees vs independent contractor is an important classification and misclassification can put you or your company at odd with CRA. There is no definition in the act for employee or contractor and there fore it is the matter of fact. CRA base their classification around control. If in doubt, it is always good to sort if out.

You are obligated by law to report you true income to CRA. You are obligated to pay the tax owing to CRA on time and you are obligated to file a tax return with CRA on time.

Personal tax system follows cash bases of accounting and Corporation tax system follows accrual bases. For a company, the bonus is recorded as an expense when it is announced and for person receiving the bonus, it is recorded when actually paid.

In the most general sense, if an individual is holding shares in a corporation or in a business, the disposition of those shares is reported as capital gain or loss.

There is not correct answer as it depends on your personal situation but in a most general sense an optimal combination must be established. Keep in mind that you should only opt for salary if you are working in the company.

Yes, you can put your spouse as an employee provided your spouse is actively working in your business. Actively could be full time, parttime or on call but there must be a role that you spouse is playing. CRA does look at related party payrolls with interest.

Yes, you can as long as you are actively involved in the business. Not all shareholder can be the employees, there must be a role and you should be able to preform the duties of that role.

Yes, you can pay your spouse for their services to the corporation. You must ensure that those services are business related and if the services cost over $30,000 in a year, your spouse must be registered for HST.

Yes, you can bill for your time spent in the company as consulting charges, management fee charges. You must ensure that there are agreements between you and the corporation and there are invoices backing the expense claim.

Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict critaria must be meet with involve a minimum contribution time.

Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be meet with involve a minimum contribution time.

Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be meet with involve a minimum contribution time.

Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be meet with involve a minimum contribution time.

Yes, any one with earned income can contribute to RRSP. Some exception applies.

Third party contribution are acceptable by financial institution provided the taxpayer has given authorization.

Yes, rental income is considered earned income for the purpose of RRSP contributions.

Yes, you can contribution to your RRSP if you have a personal business income.

Your current year’s contribution limit is 18% of prior years earned income to a maximum of current years contribution limit ($27,830 for 2021) plus your unused contribution room from previous year net of your pension adjustment. The ideal starting point should be your prior year’s notice of assessment. If you don’t have your notice of assessment, you would contact CRA or your accountant.

Your contribution reduces your RRSP deduction limit.

If you have not contributed into your RRSP to the maximum allowed, the remained room is carried to the next year. If you have contributed but have not deducted on line 208 or 20800, it called unused contributions. If you have unused contributions, you must complete Schedule 7 and send it to CRA. You can either leave the unused contributions in the plan or withdraw them. Regardless of the option you pick, if you have over contributed, you will be taxed on the unused amount over the limit. If you make a withdrawal, you have to include the amount in your income and deduct as withdrawal contribution.

If you contributed more than what you should have into your RRSP, in any given period, you will have excess contributions. You will have to pay 1% tax per month on any excess contribution over $2,000 until the excess is withdrawn or fully utilized in the following year provided the available room in the following year absorbs the excess. You will not be charged 1% tax if the excess is withdrawn before the end of the month in which the contribution is made or if the excess is transferred to a group plan.

If you have excess contribution and you have to pay 1% tax on excess, you must complete T1-OVP and send it to CRA along with RRSP transaction detail statement confirming the dates of contribution and withdrawals. The excess tax can cause penalties and interest if not paid on time which is 90 days after the end of the calendar year.

CRA may waive the tax upon receiving the request from the tax payer on form RC2503 if the two conditions are met. First condition is that the excess was made due a to reasonable error and second condition is that the taxpayer has taken a reasonable step to eliminate the excess contribution.

If you have contributed to an RRSP plan, you should receive a receipt with your name as a contributor and the amounts of the contributions. You don’t need to submit this receipt to CRA unless you are asked by CRA to submit them. The contribution amounts are included on line 20800 (Previously 208).