What to do when you don't have a T4 to file your taxes?

Many a times when you want to file your taxes but you do not have your T4 to file taxes. The question is what to do?

Option 1:

The answer is to call Canada revenue Agency on 1-800-959-8281 and the CRA will provide all information about the number of slips that are accumulated for you.

In fact, CRA can also let you know, whether you have other tax slips like T2202A, T4A, T5 (investment Income) etc.

Option 2:

If you are registered with CRA and have a "My Account" Log in, you can check yourself to find out the above information.

Hope this is useful!

Spousal RRSP

When a taxpayer contributes to Registered Retirement Savings Plan (RRSP) in the name of his/her spouse, it is regarded as spousal RRSP. When the RRSP Receipt is issued, the taxpayer’s name should appear as a contributor and his/her spouse should be named as annuitant. Annuitant is the one who is entitled to receive the income from such RRSP investments.

Spousal RRSP has following tax implications:

·         Taxpayer contributing into Spousal RRSP is entitled to a tax deduction on his/her tax return

·         Spousal RRSP reduces the RRSP limit of the contributing taxpayer

·         If the spouse withdraws from RRSP funds on or before three years from the date of its deposit, it is treated as an income of the taxpayer who invested and not the withdrawing spouse

·         After investing into Spousal RRSP, the RRSP issuer generally takes instructions from the spouse and not the taxpayer

Tax Consequences Of Over Contributing Into Your RRSP

Over contributing into your RRSP (Registered Retirement Savings Plan) is not a good idea from a tax point of view. Your limit of RRSP is usually mentioned on your latest Notice of Assessment from the  Canada Revenue Agency (CRA). When you over contribute into your RRSP, it has following tax consequences:

·         Tax deduction for contributing to your RRSP will be only up to the limit mentioned by CRA

·         If your over contribution exceeds limit by $2,000, you may be liable for an over contribution penalty @ 1% per month plus interest and penal consequences

If however, over contribution is done and you have a home buyer plan repayment or Life Long Learning Plan repayment, you should designate the over contributed amount in order to avoid such penal consequences

The Last for RRSP Contribution for 2015 is February 29, 2016

How Do You Remunerate Yourself From Your Own Private Corporation?

Many a times the owners of a private corporation have the dilemma of how to remunerate themselves from their corporation. There are several ways of doing so, popular methods being: dividends or salary.

Extracting funds from your corporation by way of dividend or salary have its own advantages and disadvantages. The following factors should be helpful in deciding:

• Salary is considered as an earned income for several tax rules such as RRSP (Registered Retirement Savings Plan), Child Care etc. Creation of an RRSP limit next year will create an opportunity for tax sheltering their income while providing for their retirement. When you take out salary from the corporation, it is already a tax deductible expense
• When Salary is paid it is considered as an eligible income for the purposes of child care expenses deduction on your personal tax return
• Remuneration via salary is helpful if you have your own personal mortgage coming up for renewal in the near future. This is because lenders consider salary income more stable as compared to dividend income
• Dividends on the other hand do not involve the extra cost of paying CPP (Canada Pension Plan) contributions to CRA (Canada Revenue Agency). Paying salary involves CPP contributions from both the employer and employee
• Dividends do not involve any withholding taxes and therefore are very easy to administer
• If a family member is a shareholder in the corporation, but not actively participating in its functioning, dividends are a more obvious choice because they can not be questioned by CRA, whereas salary payments must meet the criteria of reasonableness     

As you can see, there is no clear answer to the opening question. However salary deductions are a more popular choice among young entrepreneurs/owners. This is due to benefits for RRSP contributions for the future, and child care expenditure deductions.

My Introduction

My Brief Introduction:

Let me introduce myself as a dedicated Tax Specialist. I am a CPA from Michigan (USA), a Chartered Accountant and a General Lawyer from India apart from being a Licensed Life Insurance Advisor. My career and practice has been focused and built in the area of taxation as I have also been teaching Individual Tax and Corporate Taxes with Humber College since 2006 and practising since 2006 in Toronto. Tax has always been a favourite subject of mine.

I was prompted to create a blog for the simple reason that everyone is not aware about the tax credits and deductions and as a result pay lot of taxes and there is a great scope for improvement here. Remember, tax saved is money earned! There are lots of tax and financial planners, tax lawyers and other professionals that are available but they charge a lot of fees, and therefore pragmatic and matured tax advice comes at a great price. This is my honest attempt to advise and educate readers.

I am based at Toronto, owner of a corporation called Taxguru Financial Solutions Inc. which is engaged in rendering Taxation and Financial services to the specific needs of clients. I deal in the following areas of practice: 

• Tax preparation, planning and filing of both individual and corporate tax returns for clients,
• Implementation of tax strategies, 
• Incorporation services and dissolution of corporations,
• Filing of Elections, GST/HST Returns with CRA and 
• Handling of Post Assessment Inquiry and Audits for clients etc.
• Tax Planning through Life Insurance Policies,both individual and corporate