Ask Clint.
Real questions from Canadians, answered by Clint.
Clint is a certified community expert on one of Canada’s larger public finance forums, where people bring the money questions they are too embarrassed or too confused to ask anywhere else. These are real exchanges, reproduced with the questions as they were asked and names changed to protect privacy. Tax rules change and every situation is different, so nothing here is advice for your circumstances, and any dollar figure or rate was current when Clint answered, not necessarily today.
Asked
Why is the net income on the T4 higher than the total on all pay stubs for the year?
Clint’s answer
If there is a number in box 40 and you subtract box 40 from box 14, does the number match the gross pay to date on the last paystub?
If so... taxable benefits have been added to the gross income on the T4. T4 will not have a net income number.
Asked
Filling out my taxes and now on to T5. This is a Type 2 claim (combined account with spouse). The T5 is under my husband's sin number, so I am claiming it under his name. Can I split it 50% (Enter percentage of slip to claim on your spouse's tax return (if applicable)) or is that already taken into account when putting the recipient type in?
Clint’s answer
Great question!
Technically the income on this should be split at the prorated amount each of you have invested.
For example if you deposited $25,000 and your husband deposited $75,000, and the investment made $1,000, you would claim $250 and your husband would claim $750 if you're going by the book.
Asked
Hi there! I got a T5 for what must be my savings account. I never have before. Is this new? We have to claim the tiny amount of interest from that now?
Clint’s answer
Not new... All interest is taxable. The reason you may have never received one is the interest rates were so low you hadn't reached the $50 threshold that most banks wait for the account to earn in a taxation year before they issue a T5.
Asked
I recently started a job in care work, and I'm thinking about asking for extra taxes to be deducted from my wages so I don't end up owing any taxes. How much would you recommend I have them deduct each month? Is $70 too much? Also, if I overpay, will I get a tax refund? I just want to avoid owing taxes at the end of the year and having to find the money to pay. I'd rather pay a bit more now to ensure I don't have to pay anything later on. I would appreciate suggestions.
Clint’s answer
When one files their taxes and assuming they were prepared correctly, if they have overpaid, they will get that money back.
There isn't enough info here to advise on taking more taxes off, but there are many comments on what can happen if you have multiple jobs.
Here is how the payroll software works. Every pay period, whether it be weekly, biweekly, semi monthly, monthly, or whatever the scheme is there will be a calculation of how much you earned in that pay period, how much you earned prior to that pay period, and where this pay period sits in the calendar year... It can only use the info it has in the system and then calculate a reasonable prediction on what you will owe in taxes, cpp, and EI for the year based on the pay in that period and the trend previous to it. It will not have info on other sources of income and how much you have paid in taxes, cpp, and EI.
Because we are taxed marginally in Canada, we must pay higher taxes as a percentage in higher margins.
This means that if, for example, you have two jobs that make $25,000 per year, both payroll software will calculate taxes, cpp, and EI as if you made $25,000/year, and you will likely end up owing because your tax rate will be higher than $25,000.
Perhaps you take an extra $70 off, perhaps you take an extra $30 off. There isn't enough info here to give a solid answer for you.
Also, receiving money in a tax refund at the end of the year is not always directly related to being over taxed. Maybe you have the BC renter's credit of $400. For this credit, if you paid the exact amount of tax that you were supposed to, but you qualify for the full refundable portion of this credit, you would receive $400 back from the taxes you paid. There are many refundable credits like this that are not a result of overpaying.
I hope this helps you to attain an answer that works for you.
Asked
I just got $26k of backpay from my employer. My typical salary is $128k, however I have been on mat leave in 2025 so my salary for this year will be about 33k. The 26k backpay was taxed at my normal tax rate for my full salary.
Because my income was much lower this year, should my 26k backpay have been taxed at a lower rate, and if so will I get it back when I file my taxes?
Thank you.
Clint’s answer
You haven't measured out and calculated your tax yet...
Once you file your taxes for the entire year, the government will keep what they are owed, and you will either get a refund (which is the most likely based on the information you have provided), or you will have to make up the difference if you owe any.
Most Payroll calculators will deduct taxes, EI and CPP based on what they might predict as your income for the year based on past salary periods and how much time is left in the year. They will assume that all pay moving forward will be the exact amount you are getting on the current pay period.
Hope this helps make sense of it for you.
Asked
My 16 year recently got her first job. I am a single mom and am wondering if I need to claim her income on my taxes and if it will make a big difference because I claim her as a dependent.
Thank you in advance for any insight
Clint’s answer
She should file her own taxes, but may not be required to if she earns under the basic amount in 2025. $16,129.
However, yes, you should claim the income she makes if you are claiming her as an eligible dependant. It will impact the amount you pay in taxes.
If you have any younger children you may want to consider claiming them as the eligible dependant if they are not earning income.
Asked
Teenager started working (15). How do taxes work for them. Do they pay taxes. ? Do they have to do the income tax stuff ? Does it count against family income when we do ours? Can I still write off overnight summer camps for that tax deduction For childcare as kid under 16? Any other info?
Clint’s answer
Yes, they would likely have taxes deducted off of their cheque, but the chances of the CRA keeping those tax payments after the teenager files taxes for that year are statistically low.
This answers the first two questions. Yes they are eligible to pay taxes, and yes they should file their income tax. It does count against family income which will only impact the CCB. And yes you can still use applicable camps.
Update, October 2026: A teenager's own income does not affect the Canada child benefit. The CCB is based on adjusted family net income, which counts only the parents' net income.
Asked
My son turned 18 last January, can I claim him on my taxes for all of 2023
Clint’s answer
You may be entitled to certain benefits, like CCB until they are 18, but claiming children as a dependent on taxes is no longer a thing unless you are a single parent, and even at that you can only claim 1 child, and only one parent can claim the child...
I believe for dependant purposes, it's the age of the child on Dec 31, for the tax year you are filing for.
Asked
I am curious how it all works. Our daughter is 17 (18 this month) and has been working most of 2023. So we claim her or does she do her own taxes.
Clint’s answer
She files her own taxes, and, if she were a dependant you would report her income on your return.
Asked
if parent is paying university tuition and expenses for kid, are there any tax deductions for either tuition or room and board?
Clint’s answer
Students can transfer up to $5,000 federal and $5,000 provincial educational credits in the year in which they received the credits.
Medical expenses can be deducted if the student is also a dependant.
Room and board is not a deductible expense, however moving costs would be if the move was 40km closer to the school or institution than the original address.
Asked
This seems like a question I should be able to answer myself, but I'm finding it confusing. How do childcare tax deductions work? Is there a maximum amount? I'm looking at employing a full time nanny for my gaggle of children and it's pretty expensive, but it's tax deductible... I just don't understand how that works.
Clint’s answer
There are quite a few answers one could give based on the question, "how does it work?" For any topic. I'll try to cover your specifics. Yes there is a max depending on the age, and if the child has a disability ($5,000 for children over 6, $8,000 for children under 6, and $11,000 for children with a disability). You must be working or studying while care is paid for, and if the care is being provided in your home you may have to pay CPP and EI as you could be considered an employer. Also, whoever you pay to care for your children is supposed to be a Canadian resident.
Update, October 2026: The age cut-off is 7, not 6. The yearly limit is $8,000 for a child under 7 at the end of the year, $5,000 for an older eligible child, and $11,000 for a child who qualifies for the disability tax credit.
Asked
How do you decide if you're going to file taxes together with your spouse or separately? Last year was the first year we filed after getting married and our accountant decided to file separately. Trying to do it ourselves this year and wondering about the advantages/disadvantages. Thanks for any insight.
Clint’s answer
Taxes are filed as their own thing whether married, common law, or single. Certain credits can take a hit when you declare you are a couple in your tax forms.
For instance, if one of you had a child prior to a marriage and were declaring as a single parent you would get an eligible dependant credit. Married couples do not get this credit.
Asked
If I get Canadian veterans medical insurance, can I claim the fees on my taxes?
Clint’s answer
Medical deductions can include premiums on extended health care and dental, yes.
Remember to keep receipts for all medical costs, and be sure to claim the portion of these that you pay out of pocket.
Your medical deductions will need to breach a ceiling of 3% of your taxable income or $2,833 if you're earning $94.5k or over before they start impacting your taxes.
Hope this helps
Update, October 2026: The 3% is of net income (line 23600), not taxable income, and you use whichever is lower: 3% or the fixed amount, which was $2,834 for 2025 and is $2,890 for 2026.
Asked
Question about taxes.
Single mom whose daughter got braces Feb 2023 and I pay for them every month. Can I claim that expense when I do my taxes? Think I forgot last year or didn't think I could claim but want to know if i can claim this year. I usually only claim by health and dental premiums and chiro appts which last year were roughly $1,700 but if I added the orthodontic expenses it would add $3,300 a year. Is there a max you can claim?
Clint’s answer
Yes!!! You can claim medical expenses for your dependents on your taxes!
Here is how it works...
The lowest earning supporter within the same family can deduct medical expenses from taxable income. It starts to have an impact once the expenses out of pocket and after the insurance reimbursements have reached 3% of that lowest taxpayer's earnings. Example: $50,000 per year equates to $1,500 in expenses before they start to make an impact.
Also, they are deductible on a rolling calendar year as opposed to the static Jan 1 - Dec 31 calendar year. This means if you have a large expense in the later part of the year and another one in the earlier part of the next year you can couple them together so you would not have to reach that 3% threshold twice.
There is a little more to it than this, but I am confident some research would get you to where you need to be.
Oh! Also, the premiums you pay (if you pay any) for that extra insurance are deductible too.
Update, October 2026: Medical expenses are a non-refundable tax credit, not a deduction from taxable income. The 3% is of net income (line 23600), and it is capped at a fixed amount ($2,834 for 2025, $2,890 for 2026), so whichever is lower applies.
Asked
Has anyone claimed mileage and meals for travelling over 40kms for medical appointments? Just wondering how I go about this on my taxes. Thank you!
Clint’s answer
If you look up the prescribed rate on the CRA site for km travelled in the year you are speaking of, you can use this...
Input it into your medical claims portion of your tax package once you have added the amount up.
Be sure to have a log, your address you travelled from, and the medical professional's location you went to, and the dates in it in case they ask...
They love to request for the sources of truth on the medical expense stuff!
Asked
My city does not offer the services that my daughter needs (speech, OT). We are driving 175kms regularly so that she can access these services. Can I claim the gas as medical expenses on my income tax?
Clint’s answer
Hi Jess. In short, yes you can.
There is a bit of a method to how medical expenses are deducted, but the mileage can be added to the medical expenses at the prescribed rate per km that can be found on the CRA site.
Asked
hi Rave to anyone who can help me a Tax filing question.I did not make any medical and dental claims for 2022 last year,can i claim 2 years on my return this year?I'm a newby at this and would like to do it myself..thanks!
Clint’s answer
Medical expenses can be claimed on what is called a rolling calendar year. You can claim taxes in any 365 day period, 366 if a leap year is involved. This means you can claim from Jan 2, 2022 to Jan 1, 2023 to capture those expenses...
The reason for this is because there is a ceiling you must break through in order to have your claims start counting. The lesser of 3% of your net income or $2,635 must be reached in qualified medical expenses before you see an effect on your taxes payable. This is the reason for the rolling calendar.
It's because there are times when a major medical event may occur in someone's life that can span a typical calendar year and it would be a major hardship to have to reach that ceiling twice for the same medical event, such as a traumatic accident requiring multiple surgeries and rehab, or cancer treatment. Does this help answer your question?
Asked
I bought a house a year ago and it is killing me financially. The neighbours threatened to sue me into redoing a retaining wall (that was structurally fine but not aesthetically pleasing), my six year old roof leaked and the company wouldn't fix it and now my crawl is flooding.
I want to sell the lemon but I'm hoping to get back some of the cost of the repairs. Who do I need to talk to about the implications of the flipping tax or if it might even be applicable?
(Please do not tell me about the real estate market or your opinion about whether or not I'll recoup the costs. Just looking for advice on who to talk to about the flipping tax.)
Clint’s answer
Firstly... I'm so sorry to hear this kind of stress.
Selling before a year can have federal and, if you bought in BC, provincial flipping tax implications.
Selling after a year and before 2 if you live in BC can have provincial flipping implications.
But, to be taxed, one needs to have a realized gain on the investment after real estate fees, property tax costs, legal fees, and maybe capital repairs to roofs or retaining walls.
If you feel like you are going to profit from the purchase and sale, and you'd like to discuss further please feel free to reach out.
First step might be consulting a realtor to see what the place might sell for to get your answer on profit or loss.
Capital and non Capital losses can be carried forward into future years to help reduce taxes as well, and this might also be worth a discussion with a tax professional.
Asked
Can someone help estimate capital gains for me.
Purchased property in BC for 240k ,
22 yrs ago.
Would likely sell for 1 to 1.1million is my guess
Has always been a rental house.
Done about 80k in improvements since 2008
And income is approx 100 to 120k a year.
I've ran numbers from online calculators and read a bunch of articles.
Cannot get a grasp on what it would be, to decide if worth it to sell.
Or hold onto till retirement when income is lower to save tax.
( landlording not as " fun" these days, iykyk!!)
GPT’s answer:
You're asking a really good and important question. I'll walk you through how the numbers work in Canada (specifically BC), then give you a rough estimate so you can see whether selling now vs. waiting for retirement makes sense.
1. Starting point: purchase and improvements
Original purchase price (2003): $240,000
Improvements since 2008: $80,000 (these increase your "adjusted cost base")
Adjusted cost base (ACB): $240,000 + $80,000 = $320,000
2. Potential sale price
Low estimate: $1,000,000
High estimate: $1,100,000
For simplicity, let's use $1,050,000 as a mid-range estimate.
3. Capital gain before exemptions
Sale price: $1,050,000
Minus ACB: $320,000
Capital gain = $730,000
4. Taxable portion
In Canada, 50% of the capital gain is taxable.
$730,000 × 50% = $365,000 taxable gain
5. Adding to your income
You mentioned you earn $100k-$120k/year from other sources. If you sold today:
Total taxable income = ~$100,000 (your job/business income) + $365,000 (capital gains inclusion)
= ~$465,000 taxable income for that year
That puts you into the top BC tax bracket (combined federal + provincial = ~53.5%).
6. Rough tax estimate (if sold today)
About $365,000 × 53% = ~$194,000 tax bill (give or take $10k-20k depending on deductions, credits, exact sale price).
So, after selling:
Net proceeds ≈ $1,050,000 - $194,000 = ~$856,000 (before realtor/legal fees).
7. If you wait until retirement
Let's say in retirement your taxable income drops to $40,000/year.
Add taxable capital gain $365,000 → total $405,000.
In that case, your average tax rate would be much lower (closer to ~40%).
That could drop your tax bill to about $145,000 instead of $194,000 , a difference of roughly $50,000 saved just by waiting until lower-income years.
8. Other considerations
Realtor/legal fees: usually ~4-5% of sale price in BC. On $1.05M, that's ~$40-50k.
Principal residence exemption: Doesn't apply here since you said it's always been a rental.
Depreciation/CCA: If you ever claimed capital cost allowance on your taxes, some of that will be "recaptured" as income when you sell (adds tax). If you didn't, you don't have to worry about this.
Holding risk vs. benefit: If property keeps appreciating, deferring tax could mean a larger gain later (but also higher tax bill). If the market dips, waiting could reduce the benefit.
Summary: Selling now could cost you ~$190k in tax.
Selling in retirement could reduce that to ~$140k, saving ~$50k.
So it may be worth holding until your income is lower, unless the hassle of landlording outweighs the tax savings.
Would you like me to also run a scenario where you sell now but spread the gain over a few years using a "capital gains reserve" (if you take payments from the buyer instead of all at once)? That can sometimes reduce the tax hit too.
Clint’s answer
The GPT is a great answer, nice and detailed with a great breakdown.
The end result is a little off, though.
Tax brackets are marginal, and in this scenario it appears GPT decided to use a straight tax rate at the highest bracket, which doesn't actually start until after $250K.
Also, any realty fees, staging, or costs going into selling have not been mentioned.
The hypothetical retirement with the inaccurate taxation is going to be way off as a comparison, which makes for a monkey wrench in decision making when there are thousands of dollars of separation.
If we are reading that your income is $100-120k per year, then as GPT states add whatever the gain in the end might be to it and use the tax calculators to get your answer.
Anything over about $255,000 will be taxed at the highest rate.
You also may have room in your RRSPs to help reduce the pain and spread out the income in later years where you would be paying less tax overall because you'd be in a lower bracket...
These are big money decisions that might be well suited to have a good look at and make a longer-term plan after sussing out the entire portfolio and personal goals/situations.
Asked
Everyone discusses capital gains when making $ but what happens with a loss? How does a loss in purchasing a condo work? Lived in it for ~2 years and have been renting out since then? Bought condo in Edmonton in 2005/06. After the 2008 recession, value plummeted. Want to sell when value approaches my mortgage at least. How is does a loss work? Many thanks!
Clint’s answer
Hi there!
A capital loss can be applied against a capital gain for tax deduction purposes.
You can carry it back for 3 years upon the realized loss after selling your condo, or carry the loss forward indefinitely until you have a capital gain to offset it with
Asked
I have owned my home since 1998, I used it as a rental from 2011-2023, and moved back in to it Jan 2024...I am told I have to pay capital gains tax for the years it was a rental even though I'm not selling, is this true? And how does that work? Is there a percentage based on my income?
Clint’s answer
Yes, the CRA would like for you to pay capital gains on this property when you sell it.
There are some elections that can be made prior to changing the use of the residence, and if you have done this you may be able to claim it as a principal residence for up to four years while it was a rented property as long as your case fits the criteria.
Won't get too deep into the woods here, but there are definitely some things you may want to have in your records when it comes time to report.
Appraisals are fairly important so you have values to support any claims made upon filing your taxes.
Having filed a form called a 2091 change in use would be a good idea for your 2024 tax filing.
Best to consult an accountant if it's not us to ensure you are complying with laws and not paying any more tax than you are obligated to by the law.
Hope this helps!
Asked
Figured I'd ask here before asking an accountant.
If you decide to no longer rent your investment property but move into it and turn it into your primary residence, do you pay capital gains during that tax year when it stopped being an investment or do you pay if and when you eventually sell the place?
I only ever remember seeing a question while finally taxes about if an investment was sold.
Clint’s answer
Hi Maria. No capital gains paid until you sell, however, you are obligated to declare the change in use.
And I would strongly advise you get an appraisal at the time of the change.
Once you dispose or sell the property you will pay capital gains on the increase in value during the time it was a rental property, but not when it was your principal residence. This is why the appraisal is recommended.
Fill out the form I have linked a copy to in a comment below, and file it with CRA.
Asked
Just checking a rumour I heard!! Have the government come up with a new rule that even if it's your principal residence - if you make more than $500,000 profit from buying price to selling price you now get taxed? If so how much tax would you be charged Thank you
Clint’s answer
There is not a new rule, but there is a change to capital gains tax. Although the capital gains inclusion rate has gone up some starting this year, your principal residence is not subject to capital gains tax at this juncture
Update, October 2026: the proposed increase to the capital gains inclusion rate was cancelled in 2025 and never took effect. The principal residence exemption is unchanged.
Asked
We rented our suite for a few months last year, for the first time. We purchased a new microwave, washer and dryer, and blinds. If/when we claim that rental income on our taxes can we also claim those appliances and our garbage removal - and anything else?
Clint’s answer
There are two broad types of stand-alone expenses with rental properties.
1. Capital expenses 2. Operational Expenses.
Capital expenses are when one incurs cost through items that have a life-span of more than a year. The items you have listed are defined best as capital expenses and would fit into Class 8 of where one would depreciate them over time. Class 8 is a 20% depreciation.
Other items that one might deduct in operational expenses would be utility/garbage removal, annual insurance, mortgage interest, Hydro, Heat, maintenance and repair, property taxes, plus perhaps more...
Also, if you used your vehicle for the purposes of serving or servicing the suite you could potentially deduct some operational expenses for it, plus depreciation.
Asked
Can rental income be divided to 1%/ 99% to lessen the total tax owed? My partner and I are technically 1% / 99% percentage ownership as when we bought he was a first time home owner. My income was a lot higher than his this year so it seems to offset what I would owe if I put it in turbotax like this. Thanks.
Clint’s answer
Your program will allow you to, your CRA agent who audits you will not allow you to split the value of the property and subsequently the rental income or loss like this unless the original contract and title of the property is divided this way before the tax year... There are rules against tax planning after the fact... Because we don't pay taxes every time we get our rent revenue, it kind of feels like we can dodge and weave our way through when we balance our personal taxes at the end of the tax year to report our income and expenses, but there are rules stating we are not allowed, and taking a risk like this is not normally advised because it could come to roost when the sale of the property is made, and the hurt the CRA can put one through on the property ownership (factual and beneficial) can be very costly...
Asked
If I rent a home to my ex / the father of my child for significantly less than market value (between $600-$1000 per month less than fair market value), do I have to claim rental income? I would not be claiming expenses either, just trying to cover costs like insurance and property taxes.
Clint’s answer
There are many great arguments from many great people as to why they shouldn't claim income and track expenses, but in the end the rules are made and if there are exceptions they are generally very specifically laid out...
Claim the honest revenue, claim the honest expenses and you won't land in hot water.
One thing the CRA will not agree with is cancelling out income with expenses if they are left in the dark having people "do the math for them". Like the math teacher in school wanted, we have to show our work.
Also, if they leave it up to judgement on a case by case basis, there would be no standard, and the standard states you've got to report your income, and prove the expenses used to deduct the income when asked to do so.
Asked
Hello! I've done some research about claiming Input Tax Credits ( ITCs) and charging GST. I'm feeling very overwhelmed with the different information & would appreciate some insight.
I have questions for small businesses/ sole proprietorships.
*Located in BC
1)If my consulting services income will be under the $30K threshold. Do I need to register as a sole proprietor if I want to charge GST on services provided?
2) My home is literally my office, can I claim ITC's (home/business expenses) during the tax year return even if I'm NOT a GST registrant?
3) If I foresee passing the 30K income, is it best to register for a GST account from the beginning to avoid owing CRA?
FYI, I will reach out to an accountant but wanted to hear from others as well!
Thank you
Clint’s answer
1. $30,000 threshold is often misunderstood as it is in a 4 consecutive quarter period, which most people understand as only Jan 1 to Dec 31. If you make $16,000 in the last two quarters of one year and then 15,000 in the next two quarters of the following year, then you are obligated to apply for and charge GST starting in the very next quarter. (July 1).
2. Not possible to claim ITCs without a GST registration. They literally go into the GST filing with the GST business number. (Some businesses do not collect GST but are registered and receive refunds for ITC)
3. Financially, it is better to register asap if the application is accepted. Some aren't, because they don't earn enough money and aren't necessarily expected to. GST is an excise tax, and businesses do not pay GST. This is why ITCs exist. It is a full refund for all GST spent on producing income for a business, and if a business isn't making $30k, the government doesn't want to give a full refund for GST. If you are not registered, you aren't getting the full refund.
Hope this helps!
Update, October 2026: On point 1, the timing is more specific. Go over $30,000 across four consecutive quarters and you stop being a small supplier at the end of the month after the quarter you crossed it in, and you have 29 days to register. Go over $30,000 in a single quarter and you charge GST on the sale that put you over.
Asked
If I am a sole proprietorship and I have a personal vehicle, can I lease that vehicle to the company? If so how does that work?
Clint’s answer
If you "are a sole proprietorship", the business taxes are calculated within your personal taxes, and not like if you owned an incorporated company that is its own entity and must file its own taxes.
Essentially leasing a vehicle for tax advantages is redundant. It would be the same as renting your house to yourself, which has no tax impact, and therefore it is a pointless exercise.
If you wanted to deduct vehicle expenses against income made within your proprietorship you would track your km driven for business purposes, as well as total km driven in the year on said vehicle. Then you would tally up your expenses (insurance, interest, fuel, licensing, maintenance and repair, depreciation etc...) and the claimable amount for deduction would be a prorated total of km driven for work/total km.
Asked
I'm going to be doing some private work for a physician, I guess it would be like contract work? Wondering how much percentage wise I would need to set aside for taxes? Is the percentage based on the actual earnings or ??
Clint’s answer
Hi Tara.
Based on the comments it looks like you have another source of income, You'll be contracting out, and there is a comment about GST in here as well.
Depending on your income, it would be wise to save 30% or more for the income tax side.
GST, the $30,000 amount is correct, however you don't have to apply for a GST number and start charging until the first quarter after earning $30,000 in a four quarter period. This is a rule that has a ton of confusion. Feel free to reach out and I can explain further.
It would also be advisable to track any and all expenses you incur while earning this income.
Vehicle expenses, cell phone, home office, supplies etc are all good things to keep record of so you can lower your tax burden. Especially that vehicle one. Fuel, insurance, repairs, and depreciation are all deductible.
Hope this helps.
Update, October 2026: The timing is more specific than this. Go over $30,000 in a single calendar quarter and you charge GST on the sale that put you over. Go over $30,000 across four consecutive quarters and you stop being a small supplier at the end of the month after the quarter you crossed it in. Either way, you then have 29 days to register.
Asked
Can I write off clothes if I add them my company logo?
Clint’s answer
If you actively work in uniform type clothing that you would not wear outside of work, this is a valid expense.
However...Clothing can be a bit of a dicey gamble if the logo is put on and not visible most of the time.
Typically most clothing with company logos are expensed as promotion and much of it is distributed to employees and clients as swag.
Asked
Question for a friend to any accountants in the community. She filed taxes last year for her employment income but didn't include self employment. She doesn't make much from that, was probably about $1400 for the whole year and she spent more than that buying inventory and equipment. I'm trying to explain to her that if she took a loss, it can go against her employment income but is it too late? Personally, I've always filed on time, including my self employment income. I know you can back file for previous years but is it worth doing that if you filed for employment but not self employment? She genuinely didn't know to do it because she took a loss.
Clint’s answer
Hi Kim. As the CRA would direct, all income should be reported, however this sounds like ultimately it would be a moot case now that the taxes have been filed. To do an adjustment that would only end up in non-capital loss carry forward deductions for future business profit, it likely wouldn't be worth the cost. As far as the rule, it would be recommended to do an adjustment, but in all likelihood, if the CRA were to be involved it would end up not being in their advantage.
One more thing.
Business losses cannot be used to reduce employment income for tax purposes in Canada unless they are directly related to the revenue to revenue already incurred. (Operating expenses, Capital Cost Allowances etc...)
Update, October 2026: The last point needs correcting. A sole proprietor's net business loss for the year is first used against their other income for that year, employment income included. Only what is left over becomes a non-capital loss to carry back or forward.
Asked
FHSA and TFSA have a contribution max, but what happens if you are investing in those accounts and your returns are greater than contribution room? Will there be penalties?
Clint’s answer
It doesn't matter what you earn. This will not impact your taxes, nor will it impact your room for contribution in the following year. There is a comment here in trading that the CRA may deem your TFSA trading as a business. Although there is truth to this, there are many criteria that would have to be satisfied for this to occur. Examples include spending a significant amount of time daily doing frequent trades, having more than average knowledge about trading, and trading unqualified investments like foreign mutual funds. Also, if you happen to pick up a stock that pays foreign dividends you'll likely be taxed at the source and there is no foreign tax credit on TFSAs. FHSAs are not subject to the same rules, and you can also earn more than your investment without being penalized so far...
Asked
What is the deadline for RRSP or TFSA contributions for income tax purposes, does it have to be before end of December?
Clint’s answer
There is no TFSA deadline as it has no tax effect or consequence, the room for deposit in these carries forward from year to year.
RRSPs deadline for any given tax year is 60 days after the calendar year ends. (Or if it lands on a weekend, the first weekday financial institutions are open after the 60th day).
Asked
Please no judgement but last year I decided to withdraw a large sum of money from my RRSP to pay off my debt. Of course when I did this I was taxed. My question is will this impact me when I file my taxes this year? Do I claim this withdrawal as income? I'm just trying to figure out if I'll be taxed on it again so I can prepare for a bill when I file this year.
Clint’s answer
Hello. Great question.
RRSP withdrawals are taxed upon withdrawing, however it is only an estimation that usually equates to 10%. Occasionally it may be different.
Will this affect your tax return this year? Definitely.
How it does greatly depends on other income and deductions you have.
For example:
-If you have lots of other income, and you sit in a mid to high tax bracket, you will likely owe more.
-If you have withdrawn a smaller amount ($15,000 or less) and have no other income, you should get a refund.
The RRSP will be counted as taxable income and should be claimed using an issued T4RSP slip.
Update, October 2026: The tax held back depends on how much you take out at once. Outside Quebec it is 10% on up to $5,000, 20% on more than $5,000 up to $15,000, and 30% on more than $15,000.
Asked
Can someone explain to me the pros and cons of holding US stocks in my TFSA? Is there different taxes I have to pay on it? I'm wondering why I was told just to hold Canadian stocks and ETFs within it.
The US stock market is much more lively in the Canadian. Just want to have a bit more information before I make the leap.
Clint’s answer
TFSA: American or any foreign country with an organized tax system will tax income at the source. For example dividends declared and paid will be taxed at 15% as a withholding tax in the US. This includes RRSPs too, however... Any country that Canada has a tax treaty with will allow for a foreign tax credit to be applied against taxable income... The TFSA, being not a taxable gain would not qualify for this and one would have to eat the tax withholding unless they applied (and were approved) to the US to get a portion back.
RRSPs being taxable upon withdrawal would technically qualify to have the FTC credit applied.
Obviously a disadvantage for you being taxed, however the advantages might outweigh this relatively small amount of tax, diversification being one and large capital gains vs small dividends might be another, for example in a good American tech company. Capital gains in American stocks do not generally have withholding tax. Speaking to an investment advisor would be a great idea too.
Asked
A few years ago I bought a house with the Home Buyers Program (HBP) with a withdrawal from my RRSP. I planned to move there for work and live in the home and then the job offer fell through. It turned out I was able to rent the property and continue to own it while living at home. I wrote the CRA and explained the situation and they said I could continue to keep the HBP in operation without penalty.
Fast forward now to 2025. I am prepared to pay back the last of the HBP "RRSP Loan" back to myself as my spouse and I want to purchase a home. It would be our first property to buy as a principle residence but I'm concerned about the ability to use the funds in my RRSP to fund the HBP again. I need to access those funds to afford the down payment.
Question: will CRA allow me to use the HBP again, correctly this time? Is it a one and done, or are there scenarios it can be used more than once? (Such as mine). I also am assuming if yes, I couldn't have two HBP at once, thus the need/want to settle that account.
Another caveat: if I am indeed able to access the HBP funds again, should I max out my rrsp and FHSA contributions before purchasing the property, or should I transfer funds in my RRSP to my FHSA (allowed by CRA) and apply the balance I would have invested in those accounts to the down payment directly? This caveat/question two is not as important to me but it is on my mind!
Thanks friends!
Clint’s answer
According to the CRA site, the rental is of no consequence to the HBP, so having a rental should not impact the application as long as the owner or partner has not lived in any home they owned in the previous 4 year period.
However... the HBP balance must be 0 on Jan 1 in the year they intend to apply it again.
You are on the right track, and if you have the room and the funds I don't see a reason not to max the FHSA and RRSP, but just be aware of the 89 day rule where you may not get the deduction if you apply within 89 days of making the deposits.
Asked
Hello! Long time lurker here.
Pension buy back question
I want to buy back my pension time for my maternity leave, and one option is to use my RRSPs.
I have contribution room, but what are the tax implications of using your RRSP (directly) to buy back pension time? Does it get counted as a taxable withdrawal? Or penalized? It doesn't seem like this could be a tax deduction, but curious if there are negative implications to this route.
Thanks so much!
Clint’s answer
Yes, doing it this way should result in net zero taxes as long as it is done appropriately through the correct channels by the financial institutions holding the funds and receiving the funds.
The key is that they stay registered.
Some consideration might be given to the type of pension it might be, how long one has been contributing and how long one plans to continue to contribute. And maybe a bit of thought as to what the RRSP purpose might actually be for to ensure it isn't redundant saving that would be taxed heavier if it were to be withdrawn as a lump sum for any reason before or after retirement.
I might suggest looking into the option for TFSA and what the benefits of having it over an RRSP would be if I had a pension plan.
Asked
What is the best way to cash in RRSP's if you are starting a business?
(I'm not starting a biz - just brainstorming finance options with a friend who wants to)
Clint’s answer
Thanks, Lisa.
There are withholding taxes which are deducted at the source. This means they will be held back and remitted to the CRA prior to the recipient receiving the said amount. When it comes time to calculate and file taxes in the following year after the withdrawal, the taxpayer/recipient will either pay more, receive a refund, or break even so-to-speak.
There are personal deductions etc so these figures aren't to be taken too literally, but withdrawing anything above the thresholds (for instance if the recipient is in BC, anything above $47,937 will be subject to a 2.64% increase in every dollar received up to $95,875.)
Federal same system and the taxes to be paid will be the combination of both the BC tax and the Federal tax, so yes, eventually more than 50% of each dollar withdrawn could be owed to the government. OUCH!
Does this help?
Asked
A very close friend of mine just got an inheritance and is going to gift me some $, I think I $10K. Are there tax implications if you receive a gift of $10K? Would it be better for the amount to be $9999 or receive it in two $5K instalments? I don't want to take a hit on this!
Clint’s answer
If it is a cash gift, there will be no financial consequence.
Any cash deposits over $10k will be reported to FINTRAC to see if they would like to follow up. This is ultimately to suss out fraud and terrorism, so if neither of those apply to your situation AND it is a cash gift, and not a property gift, then the tax consequences are nil.
Congrats on the gift!
Asked
Does inheritance count towards your income? Do you have to file an inheritance in your taxes??
Long story short, I worked for a bit in 2023 before going on medical leave, then maternity leave. I received a substantial inheritance from a family member that passed away. When I find my taxes, do I include that on them?
Clint’s answer
Canada does not have inheritance tax. Probate tax prior to the inheritance is provincial and varies province to province. Estate taxes occur between the death and the inheritance, so that all the money has been taxed prior to a beneficiary receiving the inheritance.
Asked
I know you don't need to claim an inheritance on your taxes. But is that just a cash inheritance? My husband inherited farm land in Alberta, after the will went through probate, the land was transferred into his name and it was immediately sold to the farmers renting it. Do we have to claim the sale or the land or does it all fall under inheritance and nothing needs to be done regarding it on our taxes?
Clint’s answer
If the land was transferred after probate and before sale, yes, you are obliged to report the sale on your taxes. You may have a small gain or loss that would have tax effect. If there is no loss or gain, they will still want to know about it. (How would they know if you haven't reported it?). This is the logic behind it. Reporting income, losses, and transactions are done with a signature indicates that what you are saying is kind of like the truth, the whole truth, and nothing but the truth. Simply leaving things out of tax reporting because we feel there is no tax effect is a very subjective thing that would depend on what we knew and didn't know about the tax system, and the CRA is reasonable to not allow the vast array of interpretations to be included in our tax reporting when it comes to real estate and many other financial transactions.
If the property was sold prior to the estate delivering your proceeds, the estate would and should have reported the sale along with the gain or loss.
Does this help?
Asked
Not sure if you can help but here's my question. My daughter and I own a house together. If I die does she have to pay inheritance taxes?
Clint’s answer
Probate is the name for the tax that the estate is subject to when a person passes away.
If your daughter and you are both on title as "Joint Tenants" giving the other person on title "Joint right of survivorship" then the house would not pass through probate and there will be no probate tax to pay on the house.
Asked
I will be coming into a lump sum inheritance in coming months.
This is via a family trust.
My father will be selling off his portion of what his mother mother left her children and will be dividing it between his 4 canadian children, rather than waiting until he passes.. The trust is in the US.
Does anyone have knowledge of this process and if there is any taxing that happens between country's?
I'll be asking a tax specialist but thought I'd hop in here first!
Clint’s answer
Specifics will be required to deliver to your accountant/tax specialist.
Typically trusts are their own entity and will be taxed accordingly prior to any money being distributed to the trust beneficiaries or owners so any amount the trust has made will likely have already been reported and tax payments remitted up to date.
Distribution might be taxed in the US at the source, but there is no inheritance tax in Canada, so this may or may not be refundable through Foreign Tax Credits or by applying for a refund through the IRS.
Asked
I recently got an email from CRA, a Notice of Collection, for the taxes i just did in Spring. I am self employed and last year was the most i ever made, and I was not saving monthly for tax ... As a family, we were scraping by, so saving just was not an option after hubby lost job. My question is... what is the best way to arrange payments? Should I do the online form with CRA? call them? Will they lower the interest amount, knowing my situation? Will they allow me to start paying at a much later date? I will take care of it eventually, but, it will take time. It is just over $3k. I do not work in summer months, so have absolutely no income right now... we just had our mortgage renewed at an astronimical amount, which we already have no idea how we will pay next month... it went up another 900 a month... basically, we will not have a food budget...(not that we spend that on food, but these days... ) In the fall, my income will be back, so I was planning to arrange pymnts. With that said, even with my income back.. that, and my husband's income, are still not enough to cover essentials. We are striving to survive, and working hard to increase income, but as you all know, this is very difficult. Is there a better way, to pay this income tax bill? Can I negotiate a lower rate? we dont have available CC or LOC... they are maxed. this just sucks.
Clint’s answer
I'm very sorry to hear this, and it is truly a difficult situation. The CRA is going to be unrelenting in the short to mid term until the substantial debt that has been accumulated is relieved. Taxes are an inevitable part of life, however the percentage on the interest is getting to be substantial. There is a form that you can fill out and apply to have penalties and interest relief, however, the judgment on the hardships one might include in the application form are somewhat subjective, especially when the country is in a debt recovery position.
Atop of the application, one would likely have to expose all assets and accounts with income and expenses as they are also doing everything they can to gather information, and once they have it all, the judgment will be based on how the hardship is viewed.
The form is called an RC4288. Google it and download the fillable PDF form and mail it to the address indicated in the form. Alternatively, log in to your My Account and submit it electronically. (Electronic submissions are best by far)
Processing time is a while.
Hope this helps.
Asked
What happens if you choose the wrong option when paying taxes on line? Will they eventually get it sorted out on their end? I tried to call CRA today but the wait was three hours.
Clint’s answer
Many things can happen, but the most likely is that it eventually gets allocated correctly... more and more I'm losing faith in correctness with the CRA, however...
Why they have so many payment options is beyond me, especially when it can be incorrectly allocated.
It could sit in an instalment for a future year's tax, it could sit in an abyss of overpayment until you request it be refunded or reallocated.
Sometimes they will refund it unannounced.
Best to call, get the agent name and id of who you're speaking with, ask them to acknowledge the payment and date of receipt so it's on record, then ask if they can put it in the right place... Hopefully they can.
Date the convo with the agent name and id or it never happened.
Asked
Tax professionals - I just noticed that last year I did not claim my dependant on my taxes. Is there a way to refile my 2022 taxes to include claiming my dependant? If so, how do I go about this? Thanks in advance.
Clint’s answer
When you say you didn't claim your dependent, what does this mean? Married couples don't get a benefit for dependent children, but single parents are allowed one to reduce taxes payable. If you have a dependent that has a qualified and accepted disability you can claim them as well as the CCC (Canada caregiver credit). If you're eligible in one of these scenarios you can file an adjustment request.
Asked
Husband and wife filed personal taxes together end of April. Husband works a lot. Wife basically makes nothing.
Wife got her notice of assessment back right away saying nothing was owed as it should.
Husband is waiting on a 50k tax refund.
CRA is holding the money.
Husband called CRA and they said they have until August 13th to refund the money. That nothing is wrong on our part. They just have more time and we needed to wait longer.
Is this normal!?!?!?
Clint’s answer
It's not common, but it happens. They will pay interest on refunds if you're filed on time and they take an exceedingly long time to grant you your money back. After all, they have had it since 2024.
Of course you'll have to pay taxes on that interest income.
Have they stated a reason why? Usually they give you some sort of clue, and generally people know why because a $50,000 refund is not typical.
If there are large deductions, then they may be wanting proof, and if you were over taxed by that amount, you're an anomaly and they might want to verify it is correct.
Asked
Hey! gotta tax question!
I'll be moving this year and will be making income in two different countries (Canada and Ireland). Come tax time, will I need to declare my Irish income on my Canadian taxes and vice versa?
Clint’s answer
Severing ties from Canada usually means getting rid of things like your provincial ID, for example your licence. Also closing any Canadian bank accounts and having no residential address. There are forms to fill out when entering or leaving Canada that will be used to officially determine your residency in Canada. You could Google NR73, fill it out, and file it if your plan is to move permanently. Send it to the address on the form or the page you happen upon, and the response answer will tell you how you would be taxed in Canada, if you're wanting to find this out on your own.
Once you have determination of residency in Canada, there would likely be the equivalent of a form to enter Ireland, which you could google again.
If you became a non-resident of Canada, your best bet from there is to contact a good tax pro in Ireland to navigate the reciprocal agreement between tax agencies.
Asked
Clint Cole ...re capital gains tax in Canada.
Upon the sale of a house in Mexico, when the title on the house is only in one spouse's name, can the tax on capital gains be split between the spouses as it is community property? For income tax purposes, both spouses file as married. Thanks for any help you can provide or guidance on where to find this info.
Clint’s answer
Hi. It depends on the beneficial ownership of the property.
For instance, was it being rented out for income, and has that income been reported on both spouses income consistently in the past? If so, then the argument for a capital gains split is fairly solid, if not, you may have a little bit of a tough row to hoe unless both spouses can prove they split the original investment by tracking where a down payment or loan came from exactly.
Does this help answer your question?
Asked
Looking for advice regarding my husband having an approximately $5,000.00 USD in a 401k through John Hancock from his time working in the States. He was there for 3 years on a T1 visa. What is the best way to move it to Canada without major penalties? Can we request it be moved to a RRSP? Better to just leave it there until his retirement age? He's 51.
Clint’s answer
Withdrawing a 401k or any portion of one will be taxed in Canada. It's much like an RRSP in that the growth while in the investment is tax sheltered (tax free), but once it is pulled, the withdrawn amount is added to your taxable income and taxed appropriately at the marginal rate.
The strategy for withdrawing these kinds of investments is when your taxable income is at a lower marginal rate (tax bracket).
There may be some withholding tax at the source which may be applied as foreign tax credits so you get dollar for dollar back as credits when you file your taxes, but if there is more tax taken off at the source than the taxes you would have paid in Canada, you would have to apply for relief to the IRS.
As far as transferring it into another registered account in Canada, there is a multi-step process that involves the American employer's approval as I understand it. One would have to get approval from the employer to transfer the 401k as a lump sum to an Individual Retirement Account (IRA), then have the financial institution you are registering your RRSP through apply to have the funds moved from the IRA to the RRSP. This would come with fees, I’m certain, so bottom line, all things being equal, the question would come down to how badly one wanted to have their money grow in Canada vs US.
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