Low-income people got tax audited 5 times more!

In US, a recent analysis by Syracuse University people making $25K less got tax audited 5 times more. Main reason is that they claimed Earned Income Tax Credit (EITC) which was expanded via the pandemic relief bill. It was said that there are errors in claiming too much credits. Still, that seems very outrageous especiallyContinue reading “Low-income people got tax audited 5 times more!”

A few considerations of TFSA

If someone’s household income is in high tax bracket. They might want to minimize the interest generated in the margin account because it is not tax sheltered. It might be better to put the securities with price appreciation such as growth stocks. One day when they need to sell them, they could transfer-in-kind into TFSAContinue reading “A few considerations of TFSA”

Should you file income tax returns with only overseas income?

Someone thought he doesn’t have to file personal income tax because the income is made overseas. However, he lives in Canada permanently. Perhaps just a quick and simple sanity check question. I asked whether he use the health care system here. Natually, he does. To be fair, should he also contribute to the government coffer?Continue reading “Should you file income tax returns with only overseas income?”

Pay more tax for better services?

Today is the day! For Toronto municipal election. The voter turnout would be quite low per media reports so very unfortunately. Perhaps some people think it is not important? Public transit is on top of my mind. Toronto is famous for its traffic congestion. Crumpling infrastructure is the theme of the developed world. In Toronto,Continue reading “Pay more tax for better services?”

Common mistakes on TFSA

The name TFSA – Tax Free Saving Account can be quite misleading or confusing. Some people think that it is the same as a regular bank saving account. Moreover, certain banks only offer TFSA account with such limited function. This further confirms their misunderstanding.  In fact, TFSA can be used to hold all kind ofContinue reading “Common mistakes on TFSA”

Recent changes on personal income tax

I found two key changes for 2021 tax year while working at a tax clinic. One is Climate Action Incentive, and the other is Ontario Trillium Benefit. Many people received around $300 refund last year for CAI- Climate Action Incentive. However, they might see less refund or no refund at all this year because CAIContinue reading “Recent changes on personal income tax”

Key tax issues for foreign investments

CRA requires to complete and file this T1135 – Foreign Income Verification Statement if at any time in the year the total cost amount to the reporting taxpayer of all specified foreign property was more than $100,000 (Canadian dollars). Registered accounts such as RRSP and TFSA are exempted. What about non-registered account or so-called marginContinue reading “Key tax issues for foreign investments”

How to reduce withholding tax by your employer?

First, you can submit the form T1213 called Request to Reduce Tax Deductions at Source to CRA. One common justification to reduce tax is RRSP contribution. Many people wait for the tax refund and feel very happy about it. However, the government hold the refund for a year and don’t pay you any interest. Instead,Continue reading “How to reduce withholding tax by your employer?”