Have you ever discovered that you over-contributed to either your RRSP or TFSA? Then check out the commonly asked questions below to find out what you can do about it. Also check out the information below to help you determine if a TFSA is right for you.
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income tax
If you are an investor it is important for you to know about capital gains and capital losses, and how they affect your taxes. Check out these commonly asked questions to find out more about how capital gains will affect you.
Can you explain capital gains tax?
A capital gain is the appreciation in value of a capital property, when sold from the date of purchase. Basically, if you bought a stock for $10 and you sell it for $15, you would have a $5 capital gain. A capital loss would be the opposite; a capital property that loses value when sold from the date of purchase.
Don’t we all want to know about tax deductions? It’s good to take advantage of any deductions that we possibly can. Learn more about these deductions by checking out the commonly asked tax questions below.
Are legal fees tax deductible?
Most legal fees are not tax deductible. Legal fees associated with recovering income such as spousal support or lost wages are deductible. Otherwise, legal fees are not deductible. A general rule of thumb is that if the settlement is taxable income, then the fees are deductible. If the settlement is not taxable (e.g. money from a personal injury settlement) then the legal fees are not deductible.
How will the average Canadian taxpayer benefit?
As the new government gets to work in Ottawa, the tax measures proposed in the March budget should soon be passed. Here are some of the changes you can expect to see on your tax return soon:
Children Arts Credit: Parents with children under 16 who are enrolled in artistic, cultural, recreational or developmental programs will be eligible to claim up to $500 in registration or membership fees. This includes things like scouting, credits, painting, pottery and tutoring. If a child is disabled, there is an additional $500 supplement.
Remember Brian Mulroney: The Voluntary Disclosure Program allows taxpayers to correct previous tax returns if they have failed to report income. Mr. Mulroney used this program to disclose unreported income.
Don’t wait: If the Canada Revenue Agency has already initiated action against you, it is too late to use the Voluntary Disclosure program. You have to inform the CRA first.