Tax

Question 1

HST Quartely

Answer 1

Quarterly Instalment required after 3k
Quarterly filling required after $1.5M
Penalties for late payment = prescribed rate + 4%
Penalties for late filling = 1% + 0.25%
due date one month after quarter end

Question 2

LPP

Answer 2

(Listed Personal Property)

Question 3

Capital gain

Answer 3

taxable amount is 50% of gain

Question 4

PUP

Answer 4

(personal use property)
Loss is non deductible

Question 5

Dividend

Answer 5

Taxable amount is the gross up of 15%. However, there is a credit of 9/13 of the variance between taxable amount and actual amount.

Question 6

CCA

Answer 6

Expense 1.5M for acquisition from Apr 18 2021 and available to use before 2024 for CCPC

Question 7

Employee vs Contractor

Answer 7

Control
Subcontract
Tools and equipments
Financial risk
Responsibility for investment and management
Opportunity for profit

Question 8

Sole Proprietorship vs Incorporation

Answer 8

Sole Proprietorsh
Unlimited liability
No tax deferral opportunity
Simple
Losses offset other income

Corporation
Limited liability
Tax deferral opportunity
More complex - additional books and tax returns
Losses are trapped in the corporation

Question 9

Personal tax

Answer 9

Add (salary + taxable benefits + business income + property income)
- Deductions (RRSP + childcare + spousal support + losses)
= Net income for tax purpose
- Deduction (stock options + lifetime capital gain deduction LCGD + non capital losses)
= Taxable income
Calculate federal tax
- Deduct (15% of credits in reference schedule + refundable credit + dividend credit + tax already paid)
= Tax payable / refundable

Question 10

Childcare

Answer 10

Least of the 3:
1. Amount paid
2. Limit
Under 7 - $8k
Over 7-16 - $5k
Disability - $11k
3. 2/3 income

Question 11

CPP

Answer 11

Employee CPP contribution for 2023 is 5.95% of employment income above the $3,500 basic exemption. Of this amount, 4.95% is eligible for tax credit and 1.00% is eligible for deduction to arrive at net income for tax purposes.

Question 12

Donation

Answer 12

15% on 200
29% on Donation - 200

Question 13

lifetime capital gains deduction (LCGD)

Answer 13

limit in reference book
applied only for qualified small business corporation (QSBC)

Question 14

Benefits

Answer 14

Goods: below cost taxable to employees
Automobile: taxable to employees unless reasonable per KM rate ($0.68/km)
Childcare: non taxable if within company’s premises, under compny’s adm, to all employees at no cost, available only to employees.
Rent: taxable
Education: if for work purpose, non-taxable
Travel other family: taxable
Health: non-taxable
Gifts: non-taxable up to 500 if not related to performance
Recreational facility: non-taxable to employee / non-deductible to company
party: over 150 is taxable to employees