This week on Canadian Tax Podcast, we cover:
- A tax payer with an $8mil tax bill;
- 800,000 Canadians locked out of MyAccount;
- New guidance on incorrect CERB T4A’s
- Listener questions on CEBA, accrual/forex for self employed, and Subcontractor expenses on the T2125;
(Show notes below)
Thanks for listening. If you have any questions you’d like answered, send them to questions@canadtiantaxpodcast.ca, or find us on Twitter.
Usual Disclaimer: This information is for general information purposes only, and deals with complicated and time-sensitive info that may not apply to your situation. Tax rules are always changing, and this information may not be current. Tax is complicated, this information is not tax advice, and don’t rely on this info to make tax decisions – Hire someone to help you. See the full disclaimer at www.canadiantaxpodcast.ca/disclaimer
Show Notes:
[INTRO]:
“This is the Canadian Tax Podcast, Episode # 003, hosted by me, Cameron Ware. Good morning”
[NEWS SECTION]
- “Happy Monday, it is the week of March 15th. We’ll start with some news stories.
[ITEM 1] – CBC $8mil tax bill
- CBC article from today March 15th;
- Taxpayer back in 2018 had an $8mil tax bill.
- Assumed it was fake. Froze her account
- Just log into MyAccount and look up what was filed
- This is why you have accountants. We can look this stuff up and tell you exactly what is happening, and if you need to be worried.
- https://www.cbc.ca/radio/costofliving/remember-that-year-you-made-17-000-but-got-assessed-8-million-in-taxes-1.5945901/check-your-paperwork-or-you-may-wind-up-with-an-8m-tax-bill-like-this-barista-1.5947325
[ITEM 2] – CANADIANS LOCKED OUT
- CRA locked out 800k Canadians again
- Same data breach that happened back in Feb.
- Should be fixed by March 22nd
- How to regain access: Quick fix is log in using banking credentials.
- https://www.canada.ca/en/revenue-agency/corporate/security/revoked-userid.html
[ITEM 3] – New guidance – incorrect cerb t4a’s
- Last week discussed issues with the incorrect CERB T4a’s.
- Guessed that there would be new guidance from CRA in the next week or so
- https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2021/questions-about-your-t4a-what-you-need-know.html
- Wait until Apr 30th deadline. Don’t late-file.
- Alternatively pay any tax balances owing so you have a refund (watch T1135)
QUESTIONS
- CEBA Loan
- $32 billion in funds advanced
- How to account for debt forgiveness
- Technical interpretation 2020-0861461E5
- you need to include the forgivable portion as income in the year of receipt.
- Alternatively, decrease expenses by same amount.
- Gets wonky, because loan shows as $40k, while CRA shows net $30k. Sch 1 adjust / income inclusion
- Self-Employed Accrual/Forex
- Taxpayer works as a consultant in the US
- Says “[read]”
- Easiest way to think of “accrual” stuff is “It’s based when you did the work, not when you get paid.”
- Forex. Textbook is spot rate on day of.
- Alternative is average rate
- Subcontractor expenses:
- Taxpayer who is self employed.
- Read “[ ]”
- On the T2125 there’s a Line 9270 “other expenses”
- You can add as many things here as you want. CRA *might* review them, as they get entered into the CRA’s systems as a lump number.
- You’ll enter “subcontractor” expense;
OUTRO
And with that we will wrap things up. Like always, if you have any questions, send them to questions@canadiantaxpodcast.ca, or find us on twitter.
This is Canadian Tax Podcast, thanks for listening.
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