Accounting Questions & Answers
- Q? How can I reduce probate fees?
- A: Multiple wills are now common in minimizing probate fees, when the deceased has assets which do not require a grant of authority from the court for the transfer of the assets, such as shares of a private company.
- Q? As a trucker can I claim more than the daily rate per day for meals?
- A: Yes! For meals purchased in the United States you can charge US $45.00
- Q? I earn over $60,000 a year and have no RRSP room. How can I save on taxes?
- A: There is a new donation tax shelter available. For an investment of $8,000 you will save $10,000 in taxes. There are additional benefits if you have unused capital losses. Call us for further details.
- Q? I run my husband's incorporated business out of my home. Can I charge rent to the business.
- A: Yes! There is no provision preventing a shareholder from charging a company a reasonable amount of rent for its use of space in the shareholder's home. The rent is included in income by the shareholder and expenses incurred related to that income (including mortgage interest) is deductible. Call us for further details.
- Q? Can I charge my employer more than the prescribed km. rate for use of my vehicle?
- A: Yes. The court accepted the taxpayer's estimate of the business cost per km. for 1999 and 2000. The judge noted that public servants were paid more per km. Incorporated business could justify paying higher kilometer rates to owners and / or, managers.
- Q? A tenant in my house caused a lot of damage. I now want to move back into this house as my personal residence. What about the cost of repairs?
- A: Expenses incurred to repair damage causedby a former tenant, even though the property will now be used as the personal residence of the owner, would still be deductible against the rental income. It is best you do the
repairs before you move back in.
- Q? I live five (5) months a year in the USA. Do I have to file anything with the USA government?
- A: Yes! If you add the number of days you spent in the USA in the current year to 1/3 of the days you spent in 2002 and 1/6 of the days you spent in 2001 and the total Exceeds 183 days, you must file IRS form 8840 (closer Connection statement) to avoid being treated as a USA resident for US income tax purposes.
- Q? I am a snowplow operator. In the fall, I receive money for snow plowing, over the winter. When is this income declared?
- A: A reserve in respect of services that will be rendered after the end of the year is allowed to be deducted from the revenue received during the year. This reserve would also apply to dentists, lawyers, etc. - anyone who receives money in advance of rendering the service.
- Q? I wear an artificial leg. Do I qualify for the disability tax credit?
- A: Yes. In the past, CCRA had disallowed the disability tax credit but a recent tax court of Canada case overturned CCRA's policy as the prosthetic device is not worn at all times and even when used, the ability to walk cannot be compared favorably to an able-bodied person. This ruling could also apply to other prosthetic devices.
- Q? I am a disabled student. Are there any grants to help me?
- A: Canada study grants of up to $8,000 per year are currently available to help people with disabilities pay for services and equipment, such as tutors, interpreters (oral, sign), attendant care for studies, specialized transportation to and from school, learning disabilities assessments, note takers, readers and Braillers.