ch2: Employment income and Expenses

Question 1

Step 1 - Identification

Answer 1

• first and last name
• email addr
• SIN
• DOB
• DOD
• Language
• Marital Status
• RESIDENCE INFO
• Spouse/common law info

Question 2

STeP 1 - Residence

Answer 2

• last day of year in cda
• date of departure from canada
• Date of death

residence determines province for calculating tax

If biz- pays tax in prov located even if diff from owner

Question 3

Indian act - Exempt Income

Answer 3

CRA form : T90 - Income exempt from tax under the indian act

Question 4

climate action incentive

Answer 4

• if TP loves outside CMA (census metropolitan area) get additional 10%
• now called canada carbon rebate

Question 5

specified foreign property

Answer 5

all cdn res must report income from all sources (in/out of cda)

ensures all foreign income reported

if over $100k–> fill out T1135 - FOREIGN INCOME VERIFICATION STMT

NOTE; based on COST , value doesnt matter

Question 6

FOREIGN PROPERTY: TYPE OF PROPERTY SUBJECT TO REPORTING

Answer 6

• money in foreign bank
• foreign rental property
• shares in foreign corp
• foreign mutual funds (except cdn mutual funds w fx inv)

Question 7

FOREIGN PROPERTY: Not included

Answer 7

• foreigh property for personla use not incl

RRSP that contains foreign investments more than $100k

Question 8

Foreign Propeerty: simplified method

Answer 8

• if have specified foreign property less than $250k, option to use simplified or detailed method

paart A - simplified metho

Part B - detailed method

Question 9

Penalty for failing to file T1135

Answer 9

$25/DAY MAX $2500

Question 11

Employment income

Answer 11

• reported on Line 10100
• includes income from office and emplpyment

Question 12

an office

Answer 12

any position an individual is elected to by popular vote or elected or appointed a representative - i.e judge, member of parliament

Question 13

employment income

Answer 13

INCOME FROM A SOURCE IN WHICH THERE IS EMPLPYER/EMPLOYEE RELATIONSHIP

Question 14

Employee vs Self Employed: EMPLOYEE

Answer 14

Depepnds on degree of control

employee;
- controlled and directed by employer in terms of work to be done,

• when,where,how work to be done
• received wages, salaries, tips
• benefits: vacation, sick days, health care, pension
• received T4 slip

Question 15

Employee vs Self Emplpyed: SELF EMPLOYED

Answer 15

• Depends on degree of control
• free to determine products and services they provide

select customers to be approached, hours worked, prices charged

can hire others

invoice customers to get paid

no additional pay or benefits

Question 16

t4 slips

Answer 16

must be received by last day of febuary

Question 17

t4 slip: Box 14

Answer 17

• incl all taxable remuneration received from employer
• enter on line 10100

Question 18

t4 slip: amounts reported in box 14

Answer 18

• salary/wages
• commission
• bonuses
• vacay pay
• taxable allowances and benefits
• Corporate Directors fees
• Gratuities/ Honoraria

Question 19

T4 slip: Other Information section

Answer 19

• free/ subsidized housing, meals, board and lodge
• allowances for travel in prescribed zone
• personla use of emplpyer auto
• interest free/ low interest loans
• stock option benefits
• other taxable allowances and benefits

Question 20

other info sect: non taxable allowances and benefits

Answer 20

on T4 slip for information only, not entrered on tax return:
- special work site allowances or benefits
municipal office expense allowances

Question 21

Emergency services VOLUNTEERS exemption

Answer 21

• NOT SUBJECT TO TAX ON 1ST $1000 OF INCOME FROM GOV, MUNICIPALITY, OTHER PUBLIC AUTH

T4 BOX 14 shows amount above $1000

B87: EXEMTP PORTION

Question 22

EMERG SERVICE VOL. : Vol. firefighter amt OR search and rescue vol amt

Answer 22

• may qualify for either
• if claiming either: full pmt feom authority becomes taxable
• will need to add amount from box 87 on T4 and include in icome (LINE 10100)

Question 23

CREDITS, DEDUCTIONS, AND OTHER AMOUNTS ON T4 SLIP

Answer 23

• BOX 16/17: CPP/QPP
• BOX 16A/17A: 2ND contrinutions (2024)
• box 18 :EI premiums
• Box: 20: RRSP
• Box 22: income tax
• Box 44: union dues
• box 46: charitable donations

Question 24

Other Employment Income: LINE 10400

Answer 24

-Casula labour, odd jobs
-Tips, gratuities (direct tips)
- Group sickness + accident plans– incl T4A wage loss
- Research grants
- Veterans benefits
- Medical premium benefits (paid by employer, NOT medical ins premiums )
- Group term life ins premiums
- Employee profit sharing plan (EPSP)
-Royalties from work or invention

Question 25

wage loss replacement plans

Answer 25

what are they:
-Employer funded group accident /ins plan

Conditions To qualify as wage loss replacement plan
-Plan covers more than 1 emplpyee
-Funded in whole or part by employer
-Purpose is to compensate employees for loss of income
-Benefits paid periodically, not lump sum
-Plan involves formal insurance contract/follows insurance principals

Taxation of income from plan depends on who paid premiums + degree of control employer has over plan

Question 26

rules for wage loss replacement plans