Introduction: Understanding Deduction of Employment-Related Legal Expenses Canadian employees are generally limited in the types of expenses they can deduct to reduce their taxable income. However, specific provisions of the Income Tax Act allow for the deduction of certain legal expenses incurred by employees under particular circumstances. These deductions can provide substantial tax relief, particularly […]
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Dec
Introduction: Taxation of Testamentary Trusts A testamentary trust is created upon an individual’s death to manage the distribution of assets to beneficiaries. Under Canadian tax law, all of the deceased’s assets are deemed disposed of and reacquired at fair market value at the time of death. After debts and taxes are settled, the estate distributes […]
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Dec
Introduction: The Distinction Between Independent Contractors and Employees In Canada, the distinction between an independent contractor and an employee holds significant tax implications. Independent contractors can access a broader range of tax deductions, while employees are often limited to few or none. However, disputes often arise over this classification, as evidenced in a recent case […]
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Dec
Introduction: Navigating Tax Complexities in Family Law While family law predominantly focuses on the division of assets and financial obligations between spouses, the nuances of income tax law often play a critical role in shaping financial outcomes. Tax implications in family disputes, especially those involving spousal and child support, are often misunderstood by both family […]
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Introduction – Employment Expenses as a Condition of Employment While businesses and self-employed individuals enjoy a broad range of deductible expenses, salaried employees in Canada are limited to specific deductions. Employees can only claim expenses that they are contractually obligated to pay to perform their job duties. Examples include musicians required to maintain their own […]
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Introduction Managing rental properties can be rewarding, but it also comes with significant responsibilities, particularly in managing finances and understanding tax obligations. For landlords in Canada, it’s crucial to know which rental expenses can be claimed and how they should be reported. Below is a comprehensive guide to the types of current rental expenses and […]
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Introduction Understanding Canada’s tax system is essential for financial planning. Many Canadians are confused about their tax liabilities, especially when it comes to distinguishing between marginal tax rates and effective tax rates. This confusion sometimes leads individuals to mistakenly believe they could take home less money if a raise places them in a higher tax […]
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Introduction – Testamentary Freedom and Its Restrictions in Ontario In Spence v. BMO Trust Company, the Court of Appeal for Ontario affirmed an individual’s right to dispose of their property as they choose upon death. Similarly, the Supreme Court of Canada in Tataryn v. Tataryn Estate emphasized the significance of testamentary freedom but acknowledged its […]
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Dec
Introduction – What is a Tax Clearance Certificate? A Tax Clearance Certificate is a document issued by the Canada Revenue Agency (CRA) to the legal representative of a taxpayer. This certificate confirms that all income tax owing, including applicable interest and penalties, has been paid. Issued under subsection 159(2) of the Income Tax Act, a […]
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Dec
Introduction: Reporting Foreign Pension Income in Canada Many individuals who have had careers abroad before immigrating to Canada may be eligible to receive foreign pension income. However, Canadian residents are taxed on their worldwide income, including pensions from foreign sources. This often surprises new immigrants, especially when foreign pensions are non-taxable in the country of […]