Unit 3 Flashcards
Bonuses tax inclusion
Include when paid
OR when declared but >3 years until they receive
Leased employer vehicle
Standby charge = 2/3 x (lease payments - portion made for insuring against loss or damages)
Reduced standby (business is >50%) = ((personal km/(1667x months available)) x regular standby)
Operating cost = 0.33 x personal km
Reduced operating cost, lesser of:
= personal km x 0.33
= 1/2 reduced standby charge
Employer owned vehicle
Standby = 2% x full cost x months available
Reduced standby (business is >50%) = ((personal km/(1667x months available)) x regular standby)
Operating cost = 0.33 x personal km
Reduced operating cost, lesser of:
= personal km x 0.33
= 1/2 reduced standby charge
Group insurance premiums for healthcare
NOt taxable (deduct)
Group insurance benefit received
Taxable
Non-group insurance premium paid by employer
Taxable
Non-group benefit received
Not taxable (deduct)
Allowances
Generally taxable, Travel and vehicle allowances are only taxable is unreasonable
Reimbursement
Not taxable unless it is only for personal expenses
Vehicle allowances are not reasonable if
- not based on km
- employee receives allowance and reimbursement
- over the CRA limit (0.68 for <5000km)
Auto operating costs does not include:
interest, CCA, lease costs, parking
Employee loan not for home purchase
= (prescirbed rate for the quarter - interest rate paid) x (#days loan outsanding / 365) x amount of loan outstanding
LESS: any interest paid by taxpayer
Employee loan for home purchase
= (lesser of prescirbed rate when came into effect or rate in the quarter - interest rate paid) x (#days loan outsanding / 365) x amount of loan outstanding
LESS: any interest paid by taxpayer
** calculate based on the days in the quarter)
Stock options benefit - IN THE MONEY
FV of stock on grant date is GREATER than the exercise price
- CCPC can still claim the deduction if it was held for >2 year
CCPC stock options benefit
@ selling date
- TCG
- Stock option benefit
- Stock option deduction
Public company stock options benefit
@ exercise date
- Stock option benefit
- Stock option deduction (only if FV at grant was LESS than ex price)
@ selling date
- TCG
Commission earning expense
- Advertising
- 50% meals
- transportation
- operating costs for vehicle
- lease costs for vehicle
- parking at clients
- Home expense :property tax, insurance
- CCA on vehicle
T2200 employee deductions
- Can not claim commission expenses too
- 50% meals
- transportation costs
- Operating costs for vehicle
- lease costs for vehicle
-CCA on vehicle
Regular employee WFH expenses
- utilities
- home internet access fees
- repairs and maintenance
- rent
- long distance phone calls (not prorated)
(only commissioned employees are allowed to deduct property taxes and insurance)
Lease costs for employee vehicle
Lesser of:
= (($950 plus tax x days leased)/30) - agg lease costs in all years - CRA rate on refundable deposits over $1000 - Total reimbursement since inception
OR
= (( Total lease payments x 36,000+GST) / 0.85(100/85)x36000) - CRA rate on refundable - Total reimbursements
Spousal support deductible if:
- periodic
- for maintenance of recipient
- made while living apart
- required per written agreement
- recipient has discretionary use
OAS clawback
Lesser of:
OAS benefits received in the year
OR:
Net income before pension recovery
Less: Threshold (86,912)
———-
= Excess x 15%
Annuities
= (Amount paid to acquire the annuity / total payments to be received) x annuity payment per year
EI clawback
30% the least of:
EI benefits included in income
NI4TP in excess of $76,875
