Employment Income

Question 1

Employment Income Tip

Answer 1

Assume all received from employment is taxable and nothing paid by employee is deductible except for exceptions:

Question 2

Employment Income is always on a…basis

Answer 2

Cash

Question 3

Bonuses

Answer 3

Bonus is added when paid not when granted unless if paid more than 3 years later - include when declared

Question 4

ITA 5 - Taxable Benefits

Allowances

Answer 4

Allowances - allowance where employee does not have to provide receipts
Allowance: cars - allowance not only for job duties
- gets an allowance AND reimbursement
- reimbursed more than CRA limits
Travelling Expenses - if unreasonably high/low - deduct expenses against this

Question 5

ITA 5 - Taxable Benefits

BOD, Counselling, Discounts, Flyer Points

Answer 5

BOD is included
financial counselling and income tax return preparation
Dif between price

Question 6

ITA 5 - Taxable Benefits

Gift n awards

Answer 6

Non cash and more than $500 
cash or near cash
given for performance
given to non arms length
FMV used to calc value

Question 7

ITA 5 - Taxable Benefits
Health Care
Life insurance

Answer 7

Premiums taxable

if employee beneficiary

Question 8

ITA 5 - Taxable Benefits
Health Care
Life insurance
Meals

Answer 8

Premiums taxable
if employee beneficiary of life insurance
meals offered at less cost

Question 9

ITA 5 - Taxable Benefits
Standby Charge - owns or leases
Reduced standby

Answer 9

Employers owns:
Standby + Op. Cost Benefit - reimbursement

2%(original cost x available totaldays employer owned car/30) usually 12
leases:
2/3 (year lease pmts - pmts for damages)

Reduced standby: req. to use for employment duties (50%), personal use less than 20004
(personal use)/1667*owned vehicle days/30

Question 10

ITA 5 - Taxable Benefits

Standby Charge - owns employee/employer

Answer 10

Employers owns:
Standby + Op. Cost Benefit - reimbursement
Employee owns:
op cost - reimbursements
op cost = (personal kms/total kms)*actual costs paid by employer

Question 11

Operating Cost Benefit

Answer 11

> 50% personal kms*prescribed rate
<50% lesser of: personal kms * rate
1/2(standby charge)
Costs - fuel, insurance, maintenance n registration

Question 12

ITA 8 - Deductions

Answer 12

Legal Expenses - to get money from employer