CRA Says – Value your Crypto for tax purposes
February 16, 2022
Your dealings in Cryptocurrency mostly have tax implications! It can be treated as business income or capital gains depending on the individual’s circumstances.
You must declare your earnings from Crypto on your tax return and you will need to value at the fair market value your Crypto in this regard.
You need to maintain books and records – If you acquire (by mining or otherwise) or dispose of cryptocurrency, you need to keep records of your crypto transactions. This also applies to businesses that accept cryptocurrency as payment for goods and services.
January 12, 2022 - CEBA Loan Repayment Deadline Extended
The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, and the Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business, and Economic Development, announced today that the repayment deadline for Canada Emergency Business Account (CEBA) loans to qualify for partial loan forgiveness is being extended from December 31, 2022, to December 31, 2023, for all eligible borrowers in good standing.
Those who have availed of this loan need to repay by December 31, 2023, in order to qualify for the $20k forgiveness of the Total Loan Amount.
This extension will support short-term economic recovery and offer greater repayment flexibility to small businesses, many of which are facing continued challenges due to the pandemic.
If in case you are not able to reply by the deadline of December 31, 2023, the outstanding loans would subsequently convert to two-year term loans with interest of 5% per annum commencing on January 1, 2024, with the loans fully due by December 31, 2025.
Ontario supports for Small businesses, Jan 07, 2022
January 07, 2022
The Ontario government announced its support for small businesses due to the recent locked-down due to the spread of the Omicron variant.
“Our government understands that public health measures needed to blunt the spread of the Omicron variant are impacting the lives and livelihoods of small businesses, workers, and families across Ontario,” said Peter Bethlenfalvy, Minister of Finance. “
Eligible small businesses include:
The Ontario government is also providing electricity-rate relief to support small businesses, as well as workers and families spending more time at home while the province is in Modified Step Two. For 21 days starting at 12:01 am on Tuesday, January 18, 2022, electricity prices will be set 24 hours a day at the current off-peak rate of 8.2 cents per kilowatt-hour, which is less than half the cost of the current on-peak rate. The off-peak rate will apply automatically to residential, small businesses, and farms who pay regulated rates set by the Ontario Energy Board and get a bill from a utility and will benefit customers on both Time-of-Use and Tiered rate plans.
“We know that spending more time at home means using more electricity during the day when prices are higher, that’s why we are moving to off-peak electricity rates 24 hours per day, seven days a week,” said Todd Smith, Minister of Energy. “The off-peak rate will provide immediate savings for families, small businesses, and farms as all Ontarians work together to slow the spread of the Omicron variant.”
Tax bracket changes for BPA in 2022
Canada Revenue Agency (CRA) has increased the Basic Personal Amount (BPA) in 2022 to $14,398 from $13,808 in 2021. This amount was $13,229 in the 2020 tax year. Every year CRA increases the BPA based on inflation. This amount is adjusted and announced by CRA before the beginning of each year as your employer needs to consider this amount before preparing your paycheque. The Basic Personal Amount is the threshold and your income up to this amount is not liable for federal income tax. In other words, if you have income up to this amount in a year, you do not have to pay federal income tax. On your income tax return, you get a non-refundable tax credit which is 15% of your BPA amount. Your federal income tax payable is calculated on your total taxable income multiplied by the rates based on your slab of income. Then your federal income tax payable is reduced by 15% of your BPA amount subject to your total taxable income slab. For the tax year 2022, your BPA amount is reduced to $12,719 if your income is equal to $155,625 or more.
CRA announces maximum pensionable earnings for 2022.
The maximum pensionable earnings under the Canada Pension plan have been increased to $64,900 in 2022. This limit was $61,600 in 2021. That means either as an employee or as a self-employed you need to pay CPP in 2022 up to your earnings of $64,900.
The rate of CPP has also been increased in 2022 to 5.70% as compared to 5.45% in 2021.
The above increase will affect your taxation for the tax year 2022. However, these changes are announced by Canada Revenue Agency much before the beginning of the year as your employer needs to implement these on your pay-cheques beginning 2022.
Canada Personal Income Tax Rate 2021
| Federal tax rates for 2021 | |
| Tax rate | Taxable income bracket |
| 15.0% | $0 to $49,020 |
| 20.5% | $49,021 to $98,040 |
| 26.0% | $98,041 to $151,978 |
| 29.0% | $151,979 to $216,511 |
| 33.0% | Over $216,511 |
| Ontario tax rates for 2021 | |
| Tax rate | Taxable income bracket |
| 5.05% | $0 to $45,142 |
| 9.15% | $45,143 to $90,287 |
| 11.16% | $90,288 to $150,000 |
| 12.16% | $150,001 to $220,000 |
| 13.16% | Over $220,000 |
| Quebec tax rates for 2021 | |
| Tax rate | Taxable income bracket |
| 15.00% | $0 to $45,105 |
| 20.00% | $45,106 to $90,200 |
| 24.00% | $90,201 to $109,755 |
| 25.75% | Over $109,755 |
During Small Business Week 2021, CRA reaffirms its commitment to small businesses.
Ottawa, Ontario October 18, 2021
CRA acknowledges the pandemic’s impacts on small businesses, and CRA says we’re here to help.
The CRA offers a free virtual meeting with a Liaison Officer. Owners of small businesses and self-employed individuals can visit them virtually to understand their business tax and GST/HST obligations. The virtual meeting with CRA will be 100% confidential. CRA will not share the information you choose to discuss with a liaison officer with other areas of the CRA or anyone else. These personalized virtual sessions have been implemented to support, guide, and help owners of small businesses and self-employed individuals, ease the stress of filing during an already chaotic year.
A No-resident of Canada can incorporate in Ontario, July 05 2021
July 5, 2021 – Ontario has removed the requirement of a Canadian resident Director in order to incorporate in Ontario. Before this, at least 25% of the Board of Directors must be residents of Canada if they want to incorporate in Canada. This opens the gate for foreign investors to invest in Ontario.
Tax 20201 - CRA - a revised Disability Tax Credit Form T2201
On September 23, 2021, CRA has refined the application process to the Disability Tax Credit (DTC) application. The key changes are:
The newly enacted earlier this year the Disability Tax Credit Promoters Restriction Act will limit the amount “promoters” can charge for preparing DTC claims to $100. The new Disability Tax Credit Promoters Restriction Act will come into effect on November 15, 2021.
Effective October 18, 2021 CRA – Authorize a representative requires confirmation
The CRA is announcing a new verification process to authorize a representative using Represent a client beginning October 18, 2021. As per the new process, called Confirm my Representative, the client, individual or businesses, will require to confirm who has access to their tax information by signing in to My Account or My Business Account. Once a tax professional has made a request to be authorized or to increase the authorization level through Represent a client, the client must verify the request online within ten business days to be accepted.
New Electronic Disability Tax Credit Certificate, Tax 2020
No more paper filing!
CRA announces that now you can submit your disability tax credit certificate, Form T2201 online either through your “My Account” with CRA or call your accountant to submit the form through “Represent a Client”.
It is secured, fast processing, and easier than before!
100% CCA on your Motor Vehicle even costs you above $30K, Effective March 18, 2019
You can claim a 100% tax write-off for your vehicle used in your business. Conditions that apply:
It can be a new or used vehicle.
2020 Personal income tax rates
When filing your personal income return for 2020, you calculate your federal income tax and provincial income tax on your net taxable income, as per the following rate.
Federal income tax:
15.00% on $0 to $48,535; 20.05% on $48,536 to $97,069; 26.00% on $97.070 to $150,,473; 29.00% on $150,474 to $214,368; and 33.00% on $214,369 and above….
Ontario income tax:
5.05% on $0 to $44,740; 9.15% on $44741 to $89,482; 11.16% on $89,483 to $150,000; 12.16% on $150,001 to $220,000; and 13.16% on $220,001 and above
Quebec income tax:
15% on $0 to $44,545; 20% on $44,546 to $89,080; 24% on $89,081 to $108,390; and 25.75% on $108,391 and above
COVID-19 Tax Relief and COVID-19 Related Tax Benefits, Tax 2020
The following Employer-provided benefits, which are generally considered a taxable benefit and added as taxable income to the employee’s employment income, have been considered by CRA as not to be taxable during the COVID-19 pandemic.
Reimbursements, Allowances, and Benefits during COVID-19
– Commuting Costs
– Employer-provided parking
– Computer and home office equipment
– Meal costs
– Cell phone and internet service plans
Commuting costs
Any employer reimbursements or a reasonable allowance for additional commuting during the COVID-19 pandemic if these benefits are not the employees’ normal commuting costs.
Employer-provided parking
It will not be considered a taxable benefit if the employer-provided normal parking space is closed due to the COVID-19 pandemic.
Computer and home office equipment
Employer-provided Computer and home office equipment up to the value of $500.00 will not be a taxable benefit if the benefits provided due to COVID-19 and even if the employee does not have to return these pieces of equipment.
Meal costs
Employer-provided overtime meal or allowances or subsidized meal due to the COVID-19 pandemic will not be added to the employee taxable benefit.
Cell phone and internet service plans
Employer reimbursements of these expenses related to your employment are not taxable benefits.
Increased RRSP Limit 2021
In 2021 your RRSP limit has been increased from $27,230 to $27,830. That means you can contribute $600 more in 2021 as compared to 2020.
This limit is based on that you can contribute 18% of your income reported on your T1 but capped based on the above amount.
– Your TFSA limit remains the same as 2020.
– You can think of optimizing between your RRSP and TFSA.
COVID19 - Home office Expenses/Deduction for tax year 2020 and 20201
CPA Canada gave an idea to CRA the simplified method of claiming home office expenses.
On December 15, 2020, CRA released:
You can claim Home Office Expenses without T2200 at a flat rate of $2 for each day you worked from home due to COVID-19 up to a maximum of $400 if you are an eligible employee.
An eligible employee – who worked from home for more than 50% of the time in at least four consecutive weeks in 2020.
However, you may be able to claim more under the “detailed method.” You need T2200S to be signed by your employer. Under this option, you can prorate actual home expenses and claim for the space used as an office in your home. This method is more attractive to those who are renting their house as the rent is an eligible home expense. As per CRA mortgage interest is a non-eligible expense in this situation.
On December 16, 2021
The above tax deduction has been extended to tax the year 2021 with an increased limit of $500.00 as announced by Trudeau government in their Fall Economic Statement.
In normal situations, you usually work from home and your employment contract requires that you pay for that (for example commission agents with partly on salary), the above scenario is not applicable to you and you, as usual, get us the T2200 Declaration of employment signed by your employer.
Just to remind you that if you continue to satisfy the following two conditions.
New Canada Training Credit - Tax 2020
Budget 2019 proposed to establish a new Canada Training Benefit, which is a new refundable tax credit that allows eligible workers to receive $250 per year towards their training amount limit, up to a lifetime limit of $5,000, to help fund future eligible tuition and fees.
CEBA loan amount has been increased, Effective December 2020
Canada Emergency Business Account (CEBA) Loan Amount
In March 2020, the Government of Canada announced the $40K interest fee loan, and you do not pay $10K.
Effective December 4, 2020, the loan amount was increased to $60K. Only have to pay $10k of this expended amount.
Notes:
Effective October 2020 Ontario allows a Real Estate Sales Person to Incorporate
PERC ( Personal Real Estate Corporation) allows a real estate agent/broker to earn their business income through a corporation. Several provinces, including British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, Nova Scotia, and most recently in Ontario, allow PRECs.
2020 CERB benefits are taxable benefit.
Please note your CERB $2,000.00 per 4 weeks, paid to you by the Government of Canada for 16 weeks, was a taxable benefit on which taxes were not deducted. If you had income in addition to your CERB, you might have tax owing. Get in touch with your tax professional to find out more.
7 Top U.S. tax changes 2021 tax year, filing season 2022
7 most important tax changes in the tax year 2021, filing season 2022:
1. Increase in Child Tax Credit and Advance Monthly Payments
2. Expansion of the $300 charitable contribution deduction for joint filers
3. Your unemployment benefit received in 2021 is taxable as opposed to it was made tax free by Congress in 2020
4. Forgiven Loan received under the Paycheck Protection Program are tax-exempt
5. Threshold for medical deduction under the itemized deduction has been permanently lowered to 7.5% of AGI Vs. 10% in the prior year
6. Increase in Standard Deduction amount (Details posted before in the below news). This is basically an inflation adjustment
7. Expansion of the Earned Income Credit for 2021 and future years
Marked the deadlines for 2021 U.S. Backup withholding taxes
What is backup withholding?
The person or business paying the taxpayer doesn’t generally withhold taxes from certain payments. They don’t do this because it’s assumed the taxpayer will report and pay taxes on this income when they file their federal tax return. There are, however, situations when the payer is required to withhold a certain percentage of tax to make sure the IRS receives the tax due on this income.
Backup withholding can apply to most kinds of payments reported on Forms 1099 and W-2G, including:
Form 945, Annual Return of Withheld Federal Income Tax
Businesses and other payers must report backup withholding and any other federal income tax withheld from nonpayroll payments on Form 945. The deadline for filing Form 945 for tax year 2021 is Monday, January 31, 2022. However, if the payer made deposits on time and in full, the deadline is Thursday, February 10, 2022.
Information returns
The information returns listed below are used to report backup withholding for tax year 2021. They’re generally due to the IRS on, Monday, February 28, 2022, for paper filers and Thursday, March 31, 2022 for electronic filers.
These information returns are:
Except for Form 1099-NEC, information returns generally must be filed with the IRS on or before Monday, February 28, 2022, for paper filers and Thursday, March 31, 2022, for electronic filers. Taxpayers should review Publication 1220 for help electronically filing information returns.
1099-MISC and nonemployee compensation
There’s a different filing due date for Form 1099-MISC when reporting nonemployee compensation. When this form is used to report this in box 7 of the 1099-MISC, it’s due to the IRS by January 31. This due date applies whether the payer is submitting the form on paper or electronically.
A Form 1099-MISC has two possible due dates when filed electronically:
The payer should separate the transmission of nonemployee compensation from other payments.
Information return filing extensions
A payer can request a 30-day extension to file any of the information returns listed above by filing Form 8809, Application for Extension of Time to File Information Returns. An extension is usually granted automatically. However, the IRS does not automatically grant an extension for someone filing Form 1099-MISC reporting nonemployee compensation payments. Payers who need a 30-day extension to file this form must meet one of the criteria listed on line 7 of Form 8809.
IRS updates: 2022 tax filing season
IRS will start accepting tax returns from Monday, January 24, 2022.
The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit after comparing their 2021 advance credits and claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
2021 US Tax Return Filing Deadline
Please circle April 18 in your calendar as your personal tax return filing deadline in the United States. Usually, it is April 15, but in the year 2022 this date falls on Emancipation Day, a legal holiday observed in Washington D.C.
US - Standard mileage rates for 2022
Beginning on Jan. 1, 2022, the standard mileage rates:
The standard rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.
U.S. Federal Income Tax Brackets for 2021 (filing deadline: April 15, 2022)
| Single | Married filing jointly | |||
| Tax rate | Taxable income bracket | Tax rate | Taxable income bracket | |
| 10% | $0 to $9,950 | 10% | $0 to $19,900 | |
| 12% | $9,951 to $40,525 | 12% | $19,901 to $81,050 | |
| 22% | $40,526 to $86,375 | 22% | $81,051 to $172,750 | |
| 24% | $86,376 to $164,925 | 24% | $172,751 to $329,850 | |
| 32% | $164,926 to $209,425 | 32% | $329,851 to $418,850 | |
| 35% | $209,426 to $523,600 | 35% | $418,851 to $628,300 | |
| 37% | Over $523,600 | 37% | Over $628,300 | |
| Married filing separately | Head of household | |||
| Tax rate | Taxable income bracket | Tax rate | Taxable income bracket | |
| 10% | $0 to $9,950 | 10% | $0 to $14,200 | |
| 12% | $9,951 to $40,525 | 12% | $14,201 to $54,200 | |
| 22% | $40,526 to $86,375 | 22% | $54,201 to $86,350 | |
| 24% | $86,376 to $164,925 | 24% | $86,351 to $164,900 | |
| 32% | $164,926 to $209,425 | 32% | $164,901 to $209,400 | |
| 35% | $209,426 to $314,150 | 35% | $209,401 to $523,600 | |
| 37% | Over $314,150 | 37% | Over $523,600 | |
US tax news - 401(k) limit increased in 2022
WASHINGTON Nov 04, 2021 — Today, the IRS announces that individuals who participate in retirement savings plans such as 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan can contribute to their 401(k) plans in 2022 up to $20,500, up from $19,500 for 2021.
Standard deductions, U.S. Tax 2021
U.S. citizens or residents for tax purposes claim the standard deduction on their income tax return every year.
Due to inflation adjustment, the standard deduction amounts have been increased for 2021. Based on your filing status, the Married couples get $25,100 ($24,800 for 2020), plus $1,350 for each spouse age 65 or older ($1,300 for 2020). Singles can claim a $12,550 standard deduction ($12,400 for 2020) — $14,250 if they’re at least 65 years old ($14,050 for 2020). For the Head-of-household filers get $18,800 for their standard deduction ($18,650 for 2020), plus an additional $1,700 once they reach age 65. Blind people can tack on an extra $1,350 to their standard deduction ($1,700 if they’re unmarried and not a surviving spouse).
The foreign earned income exclusion, U.S. Tax 2021
U.S. citizens or residents for tax purposes working outside the United States have a greater amount of income exclusion in 2021. It has been increased from $107,600 for 2020 to $108,700 for 2021. The taxpayer claims the foreign earned income exclusion on Form 2555.
The standard ceiling on the foreign housing exclusion is also increased from $15,064 to $15,218 for 2021 (although overseas workers in many high-cost locations around the world qualify for a significantly higher exclusion).
U.S. Child tax credit 2021
As enacted in March 2021, under the American Rescue Plan, it offers a dramatic, one-year increase in the child tax credit for the tax year 2021.
The amount of the credit is one of the most significant changes. For 2021, it increases from $2,000 to $3,000 for most children – but to $3,600 for children five years old and younger. The extra amount ($1,000 or $1,600) is reduced – potentially to zero – for families with higher incomes, though.
The American Rescue Plan has also made major improvements to the child and dependent care credit. However, the changes only apply to the 2021 tax year (although President Biden wants to make the enhancements permanent).
Treasury, IRS provide guidance on tax relief for deductions for food or beverages from restaurants Businesses can temporarily deduct 100% beginning Jan. 1, 2021
April 08, 2021
Beginning Jan. 1, 2021, through Dec. 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.
Where can businesses get food and beverages and claim 100%?
Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. However, restaurants do not include businesses that primarily sell pre-packaged goods, not for immediate consumption, such as grocery stores and convenience stores.
Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer.
US Personal tax filing due date extended, Tax 2020
March 17, 2021, IRS announced that the 2020 US personal income tax return 1040 filing due date has been extended to May 17, 2021, as the tough time continues. Taxpayers can also extend income tax payments irrespective of the amount due to May 17, 2021, without incurring any interest or penalty.
U.S. Travel restrictions - COVID-19, Tax 2020
US Resident Employees
Under the tax treaty between the United States and Canada, Canada will not tax a US Resident even if the employment is exercised in Canada in the following situations:
– Your employer is not a resident of Canada
– Your employer does not have a permanent establishment in Canada
Due to COVID-19, travel restrictions were placed during 2020, and many US residents who regularly exercise their employment duties in Canada must extend their stay in Canada for more than 183. As per the above test, their income is taxable in Canada.
However, CRA states that the above 183-test will not apply to the above individuals exercising their employment-related duties in Canada if their stays are mainly because of the travel restrictions.
U.S. Federal Income Tax Bracket for 2020 (filing deadline: April 15, 2021)-2
Rate for filing status – Married Filing Separately: 10% $0 – $9,875; 12% $9,876 – $40,125; 22% $40,126 – $85,525; 24% $85,526 – $163,300; 32% $163,301 – $207,350; 35% $207,351 – $518,400; 37% $518,401+
Filing status – Head of Household: 10% $0 – $14,100; 12% $14,101 – $53,700; 22% $53,701 – $85,500; 24% $85,501 – $163,300; 32% $163,301 – $207,350; 35% $207,351 – $518,400; 37% $518,401+
U.S. Federal Income Tax Bracket for 2020 (filing deadline: April 15, 2021)-1
Rate for filing as Single: 10% $0 – $9,875; 12% $9,876 – $40,125; 22% $40,126 – $85,525; 24% $85,526 – $163,300; 32% $163,301 – $207,350; 35% $207,351 – $518,400; 37% $518,401+
Filing status – Married Filing Jointly: 10% $0 – $19,750; 12% $19,751 – $80,250; 22% $80,251 – $171,050; 24% $171,051 – $326,600; 32% $326,601 – $414,700; 35% $414,701 – $622,050; 37% $622,051+
US - Standard mileage rates for 2021 update
Beginning on Jan. 1, 2021, the standard mileage rates:
• Per mile 56 cents driven for business use
• Per mile 14 cents driven for charitable organizations
The standard rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.
U.S. Corporate tax rate effective December 31, 2017
Congress approved major tax reform in the Tax Cuts and Jobs Act, signed into law on December 22, 2017. This legislation, which affects both individuals and businesses, is commonly referred to as TCJA or the 2017 tax reform legislation.
The TCJA lowers the corporate tax rate to a flat 21 percent of taxable income for tax years beginning after December 31, 2017.
U.S. Recovery Rebate Credit: 2021 individual tax filing
You will need Notice 1444, Economic Impact Payment, which shows how much of a payment you received in 2020. This amount is needed to calculate any Recovery Rebate Credit that you may be eligible for when you file your federal income tax return in 2021. People who didn’t receive an Economic Impact Payment in 2020 may qualify for the Recovery Rebate Credit when they file their 2020 taxes in 2021. Contact your tax professional to review your rebate eligibility.
Taxpayers with an Individual Tax Identification Number (ITIN) should ensure it hasn’t expired before filing a tax return in 2021.
If you miss the U.S. Economic Impact Payment? Tax 2020
Then: