Tax planning Flashcards
What is after tax interest rate?
Adjusting interest rate payable by tax deductions or tax credits if available to that type of debt
Expenses for Self employed contractors
50% meals and entertainment, professional dues, work related travel, work cell phone, internet (business use), office supplies, lease of computer/business equipment, tax preparation fee
Home office expenses (based on size of space or # of rooms): mortgage interest, utilities, property taxes, repairs and maintenance, home insurance
expenses for employee working from home (a choice to go into office or work from home but opted to wfh)
professional dues only, no home office expenses
equity ratio
= net worth / total assets
What ways can you reduce the taxable income to below SMABUD level?
- paying out bonuses and salaries
- increasing CCA
- contributions to GRSP or RPP
- Establish deductible benefit program i.e. extended health program
reasons to deduct child care expenses
- to work
- to run a business
- to go back to school (qualifying program & secondary school)
- to conduct research when grant was received
maximum annual childcare expenses:
child under age 7 - $8000
child between age 7- 16 or over 16 with disability but no DTC - $5000
any age with disability claiming DTC - $11,000
What are the deduction rates for child care expense if a lower income spouse goes back to school full time, confined to a bed or is in prison?
under age 7 - $200/week
between age 7- 16 or with disability (no DTC) - $125/week
children with disability (with DTC) - $275/week
What are the deduction rates for child care expense if a lower income spouse goes back to school part time?
child under age 7 - $200/month
child age 7-16 or disabled (no DTC) - $125/month
disabled child (with DTC) $275/month
Transfers from a non-registered account to an RSP with a capital loss, is this a taxable event?
No, capital losses are not allowed during a transfer but capital gains are a taxable event.
Personal use properties, are they allowed to have capital losses upon its sale?
no but for capital gains they are taxable.
When are taxes paid on T-Bills interest earned?
Upon its maturity
When are bonds interest taxed?
when received in the calendar year
Dividend Yield formula
annual dividends per share / current share price
Total dividend to be received formula
(par value x dividend yield ) x # of shares
