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5 BULLET FRIDAYS - Tax Mechanic News, Tips, Strategies
In this edition: Doing business within your TFSA? / Can the CRA track crypto? / How to deduct your lunch expenses
Tax Mechanic
January 05, 2024
Bite size tax and finance tips to save you $$$
Canadian Western Trust Co vs. His Majesty the King
In a recent Tax Court of Canada case between Canadian Western Trust Company, acting as the trustee of the Fareed Ahamed TFSA, and His Majesty the King, the court ruled against the appellant regarding a reassessment concerning the business of trading qualified securities within their tax-free savings account. The reassessment by the Minister added $569,481 to the Appellant's income.
The central issue in this case was the interpretation of the Income Tax Act regarding tax implications for individuals engaging in the business of trading qualified securities within their TFSA.
In the end the Respondent was awarded a total amount of $95,980.38.
Conclusions: careful when conducting business within your TFSA, and don’t waste precious court time or you will end up with higher than expected court costs…
Do you have - or want to launch - an appeal in tax court against a CRA reassessment? Call us!
To Buy or Not To Buy (a company car…)
The million-dollar question, deciding between buying or leasing a vehicle requires some careful consideration such as tax benefits, business versus personal use, documentation requirements, and more.
Let’s look at the tax perspectives: leasing a company vehicle will have notable tax advantages by deducting eligible leasing costs with a monthly limit of $950 plus GST/HST, resulting in an annual deduction of up to $11,400 before taxes. This limit applies to new leases starting from January 1, 2023.
Additionally, the CRA considers vehicles costing over $36,000 before GST/HST as luxury vehicles, gradually reducing lease payments on vehicles exceeding this threshold.
When buying a vehicle, the main difference is how tax deductions are claimed through CCA or tax depreciation. The assigned CCA class depends on the purchase price, with Class 10 applying to vehicles under $36,000 and Class 10.1 to those over $36,000. Both are eligible for a 30% tax depreciation.
Read more here!
Can the CRA track your Crypto?
Cryptocurrency Anonymity – Facts and Challenges
The belief that cryptocurrency transactions are entirely anonymous is a common misconception. While they offer heightened privacy and security compared to traditional money, there are issues such as transparency, risks associated with privacy coins, and the challenges faced by authorities in tracking crypto-related activities. But don’t be fooled. Let's get into why this is the case.
Cryptocurrencies operate on blockchain technology, a decentralized ledger combining public and encrypted data. While this makes it resistant to cyberattacks, every transaction made with cryptocurrencies like Bitcoin or Ethereum is permanently recorded on the blockchain. Despite the absence of real names, addresses, or phone numbers, the sending and receiving addresses are visible. This transparency, meaning to instill trust, poses privacy risks as malicious actors can potentially uncover identities through public wallet addresses. Read more here or watch this video!
How to deduct your lunch expenses for your business
As a business owner you need to be shrewd enough to know the ins and outs on how to convert personal expenses to business expenses to take advantage of tax deductions and ease your tax burdens. One such deduction you are probably aware of is lunch expenses. But do you know the specific eligibility criteria? It’s not like you can just throw all your grocery bills in the pool of business expenses.
One criteria is necessity and reasonableness. The meal must be necessary for business purposes, such as a meeting with a client, supplier, or employee. The expense must also be reasonable, considering the nature of the business and the industry standards. Read more here!
Can the CRA track Crypto?
“Can the CRA track crypto?“ Although crypto offers a degree of secrecy, the Canadian government has the capability to trace crypto transactions. To ensure compliance, cryptocurrency exchanges are mandated to report transactions exceeding $10,000 CAD to the Canada Revenue Agency…”
Click here and watch my TikTok video to find out the rest!