Personal income tax is based on the income earned by individuals. The government determines the amount of tax based on that income. How much a person earns from the viewpoint of the government can be based on a variety of factors. The Canadian Revenue Agency recognizes six categories of income sources:

  • Other income (including employment and wages)
  • Capital gains
  • Eligible dividends (from large Canadian corporations),
  • Ineligible dividends (from small Canadian corporations),
  • General corporate income
  • Small business corporate income

*Income such as lottery winnings, inheritance, gifts, life insurance payouts, child benefit payments, school scholarships and GST/HST credit will not be taxed.

If you need help determining what is or is not taxable, Dely & Associates can help you.

A sole proprietorship refers to an individual who takes full ownership of a business. This means that all earnings and profit goes solely to that owner, and the owner can make all business related decisions. A sole proprietor is taxed on the profit from his/her business.

A partnership is two or more owners of a business. In this case, profits, liability, and decisions are split equally or determined by the owners. Taxes are determined by the respective incomes of the owners.

Corporations are owned by numerous shareholders. Decisions of a corporation are made by its shareholders and elected directors. The corporation is an entity on its own and is only liable as such. For tax purposes, corporations are taxed separately than a sole proprietorship or partnership.

Residential rental properties can refer to a series of homes, townhouses or an apartment building that is purchased by an investor and inhabited by tenants that pay a set amount based on a lease or any other type of agreement.

A commercial rental property is zoned specifically for profit generation. These rental properties are leased by various business owners.
If you own and rent out a residential or commercial property, you may be subject to HST and income tax. To determine what your property qualifies as, Dely & Associates can help you out.

Canada Revenue Agency allows individuals to claim employment expenses if certain requirements are met. Expenses incurred on a personal vehicle, cell phone, or for other supplies used directly for work may be eligible expenses if your employment contract requires you to pay for these and if you were not reimbursed by your employer.

If your employment contract requires you to work from home, you may be entitled to deduct a portion of your home utilities, such as hydro and internet.

To claim any employment or work-from-home expenses, your employer will need to sign a declaration outlining what you are required to pay for in relation to your employment.

If you want to know if you’re entitled to these benefits or are not receiving them, contact Dely & Associates.

An audit from the CRA means that the CRA needs to request more information about your tax obligations. This can vary from one or two small issues, or a large-scale investigation of your personal business or finances. If the CRA disagrees with the accuracy of your tax return, they may send a proposal letter which outlines their plans to reassess you. If you disagree with the reassessment, you can also appeal to the Tax Court of Canada to settle the dispute.

If you need assistance providing information from an audit or proposal letter, or providing an appeal, companies such as Dely & Associates can help provide you with the needed information.

A deemed disposition is a term used when a person is considered to have disposed of a property, even though a sale of that property has not taken place. This can happen when an individual passes away or when there has been a change-in-use of a property. For example, an owner that changes the use of their home from a living space to a rental property has a deemed disposition as there has been a change to what the property is used for. Depending on the situation, CRA may require you to pay income tax when a deemed disposition occurs.

A capital gain occurs when there is a sale of property, other than what you have deemed to be your principal residence. To determine the capital gain, several factors are taken into consideration, such as, the original cost base and any renovations made to the property over the course of ownership. Often, half of a capital gain is taxable. The amount owing because of a capital gain is dependant on other sources of income, deductions, and credits.

Dely & Associates can help you plan for a deemed disposition and capital gains.

In specific circumstances, the CRA is able to waive tax penalties and interest, accept late, amended or revoked income tax elections, or provide income tax refunds beyond the standard 3-year period. For the taxpayer relief to occur, the application for relief must be submitted within the 10-year time limit. The taxpayer relief provisions can be applicable if certain requirements and circumstances are met. These include extraordinary circumstances, actions of the CRA, inability to pay due to financial difficulties or other circumstances that would prevent payment on time from being possible. Keep in mind that financial difficulty can be hard to prove unless the taxpayer is unable to provide enough food for themselves or their family.

If you qualify for any of these requirements and wish to apply for taxpayer relief, Dely & Associates can help you.

Why hire Dely & Associates?

Need help with accounting services for your business? Let the experts at Dely & Associates help you.

  • To eliminate errors while saving you time, money, and stress.
  • To assist with all finance-related work.
  • To retain a trustworthy source of support.
  • To help you make better business decisions.
  • To give you guidance while planning for the future.
  • To save you tax.
  • To help you avoid audits.
  • To facilitate CRA compliance.

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