Now that MileIQ for Canada is live, it’s easier than ever to claim the mileage deduction you deserve. Be sure you’re aware of the CRA mileage log requirements before you claim motor vehicle expenses on your taxes.
Tag Archive for CRA
What is a Director’s Liability?
As a Director of a Corporation you are responsible for ensuring the entity makes the appropriate filings and remittances of amounts held in trust to the Canada Revenue Agency such as GST/HST and payroll deductions.
Are the aggressive collection calls you have been getting from the Canada Revenue Agency (CRA) real? The short answer is NO. The calls are a scam. Please read on.
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◊ Green card holders who are holding cards close to 8 of the last 15 years need to examine their options to avoid becoming covered expatriates if they return to Canada and/or wish to give up the green card. Becoming a covered expatriate can have significant U.S. tax implications to you.
◊ CRA Form 1135 may become easier for 2015 if the aggregate cost of foreign property is not over $250K.
◊ Snowbirds need to watch their days presence in the U.S. to avoid deemed residency rules and related filing obligations! Read more
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◊ FBAR DUE DATES ALIGN WITH TAX RETURNS
The SURFACE TRANSPORTATION ACT OF 2015
Confirmation that the foregoing ACT in Section 2606(3)(11) makes reference to Regulation 1.6081-5 of the IRC which confirms that the due dates will conform to the June 15th automatic extension if one resides outside of the U.S. on April 15th. One may file IRS Form 4868 to extend the date to October 15th. The Secretary may waive penalties for first time filers with the penalties if the 4868 is not filed.
◊ Leaving Canada requires departure planning not to be left to the day before you leave.
◊ CRA has changed the rules for the charitable gifts outlined in your WILL. Read more
It is not uncommon for e-filed returns or paper filed returns that claim a credit for US tax for CRA to request verification.
US tax paid per Canadian withholding slips are not requested because the slips are issued by a Canadian entity. They are looking to US tax claimed per US reporting slips such as W2s, 1099s, 1042s or from the US 1040/1040NR tax returns. US social security tax and medicare (ie., FICA) is creditable if it relates to US source wages or services performed in the US which is evident on the W2.
Foreign tax credits claimed in respect of US computed from the US tax return based on determination of what portion of the tax payable of the return relates to US source income that is creditable is usually supportable by submitting to CRA your schedules and copy of the federal (and state where applicable) return. Recently CRA has Read more
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◊ U.S. Tax withholding for Canadians
Make sure you have the correct amount withheld from US income received. Generally amounts withheld in excess of treaty rates will not be creditable in Canada. In order to get the a refund from the IRS, you will need to file a U.S. 1040NR return and apply for an ITIN (individual taxpayer identification number) with the ITIN office.
Waiver forms such as the W8BEN should be submitted to the payor prior to the anticipated receipt of any US income to ensure the lower treaty rate (which could be 0%, 5%, 10% or 15%) in lieu of the US IRS code withholding rate of 30%. Interest, dividends, royalties, pension are usually the types of income that are overlooked. Read more
Below is a CRA confirmation of this.
Numerous immigrants to Canada or those residing in Canada but have worked for say U.S. employers have entitlements to U.S. pensions such as 401K plans and in some circumstances they have U.S. IRAs. The Income Tax Act has provisions to allow transfers including a claim for any U.S. withholding tax or for applicable early withdrawal penalties.
Examination of both the U.S. and Canadian tax provisions should be dealt with before any transfer takes place to ensure the rollover is available in Canada.
TRANSFER OF SWISS PENSION TO AN RRSP Read more
Mad As Hell And Not Going To Take It Anymore: Two Brave Women Sue Canadian Government Over Controversial FATCA Deal
Is Ottawa violating Canadians’ constitutional rights to help the U.S. collect taxes? According to two Ontario women, it is.
Two women are suing the Canadian government over a controversial deal in which Canada has agreed to share the tax information of U.S. persons who are Canadian residents with the IRS.
On its face, the deal may seem to be nothing extraordinary. In practice, however, the costs to privacy, autonomy, and Canadian sovereignty of complying with the United States’ Foreign Account Tax Compliance Act (FATCA) are sweeping. At America’s behest, Canada must share tax information even about Canadians who have never lived a day of Read more
Transfer Pricing Issues
As is the case with most major counties, Canada has rules in its tax laws aimed at preventing income from being shifted to other jurisdictions by unreasonable transfer pricing .
To date, most of the activity of the CRA and reported tax cases has focused more on inbound transfer pricing issues involving charges by multi-national corporations to Canadian subsidiaries. However, the rules can certainly be applied in connection with outbound tax planning of the type being outlined in this series .
If the CRA successfully applies these rules, they could lead to a reassessment of Read more
Many Americans hold interests in income-producing properties in Canada. In many cases, when they acquire them, they do not obtain proper advice regarding the Canadian tax implications and requirements.
This can be quite costly-in the absence of following certain procedures, an American resident earning rents from Canadian real estate can be subject to a 25% Canadian tax on GROSS rents (that is, no deduction for related expenses). This can apply even if no profit is being earned from renting the property.
As a general rule, a non-resident who earns rents for the use of Canadian real estate is subject to 25% tax on the gross rents under Part XIII of the Income Tax Act (“the Act”). This Read more
There is a big problem for Canadian residents who use U.S. LLCs- the Canada Revenue Agency (“CRA”) considers them to be corporations, even if they are considered disregarded entities (if only one shareholder) or partnerships (with two or more shareholders) for US tax purposes.
Furthermore, the CRA does not consider the LLC itself to be a resident of the US for the purposes of the Canada-U.S. Income Tax Convention (“the Treaty), since the LLC is not liable to tax (assuming it has not elected to be treated as a corporation under the US “check the box rules”).
In fact, in many cases, US LLCs that are controlled by Canadians will be considered Read more