Accounting and Taxes Thread

[Locke]

Originally Posted by DoubleF

We are all guilty until proven innocent. That's the CRA way.

This has been mentioned a few times, but I don't think it can be mentioned often enough.

If someone is accused of Murder they are Innocent until Proven Guilty.

If someone has donations or paid dues to an out-of-area Union they are Guilty until Proven Innocent.

I had someone today have all of their Work-from-home expenses from 2021 unilaterally denied because they didn't respond to CRA's request in time.

"Well, when they sent you the request for information why didn't you respond, or ask me?"

Yeah. They sent an information request by mail to an address that doesn't even exist, the client had no idea, without some heads up I'm not looking at every client's CRA account just on the off-chance, and then when this all went down I did look at their account and the information request wasn't even there.

CRA: "No! You owe us $3500!! And we took it!!"

These people are certifiably out of their minds.

[iggy_oi]

Originally Posted by Locke

If someone has donations or paid dues to an out-of-area Union they are Guilty until Proven Innocent.

Without being overly sure of what the implications are relating to the tax code I’m inclined to agree with you that this specific problem needs to be remedied expeditiously!

[Locke]

Originally Posted by iggy_oi

Without being overly sure of what the implications are relating to the tax code I’m inclined to agree with you that this specific problem needs to be remedied expeditiously!

Dude, I do the taxes for a TON of Tradesmen and what drives me crazy is them getting audited constantly because they pay Dues to various Union Halls.

"Why is an Albertan paying dues to a Sask Union Hall?"

Because he's an industrial painter or a welder or an HD Mech or a sparky or whatever, he goes where the work is. If its up North then thats what it is, if its in Sask or BC or wherever he has to pay his dues to the Local Hall if he's working for a Union shop.

Not every employer records those dues on the T4, especially smaller employers. Its hit or miss.

But man they drag those guys over the coals.

They should drag some of those Auditors out to go fix a truck in 'the middle of nowhere Northern Canada.'

And dont even get me STARTED on Northern Living Allowances.

"Gimli MB isn't a Prescribed Northern Zone ergo Claim Denied!!!"

Cool you goddamned Clowns. No kidding? Can you, oh, I dont know....read?

He doesn't live in Gimli. He lives in Gillam. Very different places.

"Well it didn't need to cost that much to get to a Hospital!"

Oh really? Tell you what, lets get your ass up to Gillam, break your leg and then lets discuss how much it 'should' cost to get you to a Hospital shall we?

[iggy_oi]

Originally Posted by Locke

Not every employer records those dues on the T4, especially smaller employers. Its hit or miss.

Those monsters

[Locke]

Originally Posted by iggy_oi

Those monsters

Unionized workplaces aren't renowned for efficiency...

[TheIronMaiden]

I love accountants. I like to think of them as members of the nights watch keeping the evil and incompetent CRA from destroying our lives.

[iggy_oi]

Originally Posted by Locke

Unionized workplaces aren't renowned for efficiency...

Their payroll and accounting departments wouldn’t be part of the Union

[Locke]

Originally Posted by TheIronMaiden

I love accountants. I like to think of them as members of the nights watch keeping the evil and incompetent CRA from destroying our lives.

My watch begins. It shall not end until my death. Please let that be soon.

[Scornfire]

This year I learned (after submitting) that out of pocket medical expenses are claimable

I love taxes

[calgarygeologist]

Does anyone know when the government will be "catching up" on carbon tax rebate payments for all us slackers who missed the deadline a few weeks ago in order to get the April rebate on the regularly scheduled day?

[Locke]

Originally Posted by Scornfire

This year I learned (after submitting) that out of pocket medical expenses are claimable

I love taxes

So long as you have enough to exceed the income threshold.

[DoubleF]

Originally Posted by Scornfire

This year I learned (after submitting) that out of pocket medical expenses are claimable

I love taxes

Medical expenses can be its own ecosystem of crazy. Certain expenses claimable in one province but not another, claimable in certain situations but not others etc.

Many people also don't realize the out of pocket premiums for these health plans are claimable. "Previous people never told me! They did it wrong!"

Well... not wrong. But certainly not advantageous to a situation.

[kipperiggy]

Originally Posted by DoubleF

I guess that's true too. My mistake. Some of it is just dumb policy revisions that the bank doesn't communicate to their front line staff. It would have been better to say, "Ask someone else or ask that person to ask someone else until they find someone who knows how to do it." People do this for other arrangements. The only unique wrinkle here is that it goes to the CRA and must go to a specific account.

But yeah, clueless front line employees. Normal. Bank confirmations for instance is one of those infuriating ones.

"We don't do confirmations anymore. All confirmations must be done by confirmation.com".

Not true. We just need to talk to the right department. The client should pay $50CAD or whatever it is for your confirmation department to fill it in. Not like $200USD+ on confirmations.com.

Similar stuff is constantly happening for POA and executors. "Sorry, we cannot allow your authority without that person's permission."

What logical part of the person being incapable or dead do you not understand?

I don't want to needlessly rip into some of these front line employees who don't know too much, but sometimes, please ask around before stonewalling.

People just want the quickest way out of doing additional work.

Confirmation.com is the biggest rip-off.

[bigtmac19]

Originally Posted by Locke

First of all....its important to note that my Intern left me. I helped him get a job at Deloitte *spits on floor*

And secondly...my office doesnt have a basement.

We Accountants largely dont hold people against their will. Theres experienced Professionals that you can pay to do that. They have Wells and all of the other assorted equipment, its just their core specialty. You have to leave people to do what they do best.

And then when they're attempting to write off copious amounts of rope, duct tape and tarps its just best not to ask too many questions. Lest you be on the other side of said rope and duct tape and firmly ensconced in said tarps.

Look its a whole thing.

Deloitte- double spits on floor

[Brupal]

My accountant reached out to me looking for the ACB of a mere 33 shares that got sold in my managed brokerage account. Naturally I contacted my top tier full service brokerage firm for the information and this is the reply I get:

I have been trying to find this ACB for Brookfield Infrastructure for you.

The following is the response that we received from our back office regarding the ACB:

“Due to the complexity of LPU's and the tax elections that the client may or may not have filed, we are not able to track an accurate book value; therefore, the book values are suppressed on the Summary of Security Dispositions and clients are responsible for calculating the correct cost when filing their tax return.”


I can’t wait for the day when CRA completes our taxes based on all of the information that they collect and the taxpayer simply signs off on that figure or provides evidence of extra deductions if they exist. Quibbling over a potential $100 gain that would cost more than that to track down seems ridiculous. Or maybe I’m out of line and should take my lumps over details beyond my control.

[bizaro86]

Originally Posted by Brupal

My accountant reached out to me looking for the ACB of a mere 33 shares that got sold in my managed brokerage account. Naturally I contacted my top tier full service brokerage firm for the information and this is the reply I get:

I have been trying to find this ACB for Brookfield Infrastructure for you.

The following is the response that we received from our back office regarding the ACB:

“Due to the complexity of LPU's and the tax elections that the client may or may not have filed, we are not able to track an accurate book value; therefore, the book values are suppressed on the Summary of Security Dispositions and clients are responsible for calculating the correct cost when filing their tax return.”


I can’t wait for the day when CRA completes our taxes based on all of the information that they collect and the taxpayer simply signs off on that figure or provides evidence of extra deductions if they exist. Quibbling over a potential $100 gain that would cost more than that to track down seems ridiculous. Or maybe I’m out of line and should take my lumps over details beyond my control.

I would honestly switch advisors over that. They should be able to provide that.

[DoubleF]

Originally Posted by Brupal

My accountant reached out to me looking for the ACB of a mere 33 shares that got sold in my managed brokerage account. Naturally I contacted my top tier full service brokerage firm for the information and this is the reply I get:

I have been trying to find this ACB for Brookfield Infrastructure for you.

The following is the response that we received from our back office regarding the ACB:

“Due to the complexity of LPU's and the tax elections that the client may or may not have filed, we are not able to track an accurate book value; therefore, the book values are suppressed on the Summary of Security Dispositions and clients are responsible for calculating the correct cost when filing their tax return.”


I can’t wait for the day when CRA completes our taxes based on all of the information that they collect and the taxpayer simply signs off on that figure or provides evidence of extra deductions if they exist. Quibbling over a potential $100 gain that would cost more than that to track down seems ridiculous. Or maybe I’m out of line and should take my lumps over details beyond my control.

The ACB of the shares wasn't on the investment statement for the month just before you sold the shares?

Ask the advisor if they can confirm what date you acquired those shares and plug in the share value on the date of acquisition. Just make sure you choose the correct ticker (BIP-A, BIP-B or BIP-C when you look it up).

Agreed with bizaro86 though. Assuming you acquired and disposed of that share while at the same brokerage, that's kind of a bull#### response. I've seen other situations where the values weren't available or accumulated dividends/interest over a fiscal year instead of a calendar year wasn't available on the regular statements, so the advisor pulled the necessary monthly statements and manually calculated the requested information.

[Cecil Terwilliger]

Random question if any of the tax experts want to chime in.

How is it determined if commission income is claimed as employment income or as self employed commissions?

If I made a base of $60k and got a T4 but made another $50k in commission, would the commission income generate a T4 or a T4A? How is it determined? Does my employer choose? If it’s T4A, then the employee would claim it a BFS commissions right? But then wouldn’t pay CPP premiums etc on it? And would be able to deduct BFS expenses?

I’m confused as to why some employers pay commissions as employment income and some pay it as self employed commissions. Especially for an employee who earns a base salary as an employee.

[chemgear]

lol

https://www.theglobeandmail.com/inve...-rules-neared/

Costs for CRA’s bare trusts rules neared $1-billion, survey of accounting firms suggests

[DoubleF]

Originally Posted by Cecil Terwilliger

Random question if any of the tax experts want to chime in.

How is it determined if commission income is claimed as employment income or as self employed commissions?

If I made a base of $60k and got a T4 but made another $50k in commission, would the commission income generate a T4 or a T4A? How is it determined? Does my employer choose? If it’s T4A, then the employee would claim it a BFS commissions right? But then wouldn’t pay CPP premiums etc on it? And would be able to deduct BFS expenses?

I’m confused as to why some employers pay commissions as employment income and some pay it as self employed commissions. Especially for an employee who earns a base salary as an employee.

I'm not sure if I fully understand your question... but I'll take a stab at it.

1. Probably the nature of the company and services/type of income they derive and essentially employee vs contractor/self employed. Limited vs full exposure to risk for those they hire to work for them. Employee in theory should never be exposed to a loss. They will always have income. Self employed earns income, but can incur a loss depending on their expenses.
2. Usually your contractual agreement with the company based on how they request the hiring of the expertise. Did they want to hire employees or hire contractors. Did you sign on as an employee or contractor? What is the agreed upon compensation arrangement?
3. Typically T4 box 42 with form T2200 and form T777 for employee or OR T4A Box 20 or Box 48 and form T2125 contractor/self employed based on #2.
4. Employed vs self employed CPP is calculated differently. T4, CPP calculated and already on the slip and max CPP is about $3,755 because you only have to do personal portion and employer pays employer portion. Self employed (ie: T2125 w/ or w/o T4A) is max $7509 because you have to pay both employer and personal portion of CPP. Calculation shows up on line 42100 essentially as a percentage factor of line 12200 and 13500.
5. T4/T777 has limited/restricted deductions. T4A/T2125 has more deductions options available. If you think limited/restrictions are ridiculous, you'd be livid seeing what is allowed for a corporation considered a PSB.
6. Commissions vs self employed is essentially employee vs contractor/self employed. Limited vs full exposure to risk. If you ask HR personnel who know some of the contracts, they'd tell you that self employed often is given a 30% ish plus top up to deal with additional stuff they do themselves because they aren't getting access to the resources of the company. Commissions for employee with base salary is essentially (but not always) like a performance bonus for working harder. Commissions exceeding a "base salary type of amount" for self employed is essentially (but not always) just putting in OT to have more take home pay.