Tax Tips: Second Quarter 2020

We provide tax tips on available benefits, CRA policies, and more.

2ND QUARTER 2020 TAX TIPS

Overview

Starting a Business and Not Getting Paid: Can I collect EI?

• In a Federal Court of Appeal case, the Court conducted a judicial review of the denial of the taxpayer’s EI benefits.

Tips: Reporting Issues

• Tips received by servers and other individuals in the service industry are taxable.
• Since tips do not show up on T4 slips, some taxpayers are under the false understanding that they are either not taxable, or only partially taxable.

Real Estate Sales: Taxable or not?

• When a sale on “account of capital” involves the sale of a principal residence, the tax may be reduced or eliminated by using the principal residence exemption.

Contributions of Goods or Services to an NPO: Tax Implications

• CRA considered whether a deduction was available to suppliers who contributed in-kind goods or services to an NPO with the expectation that they would benefit from word of mouth advertising and promotion.

Working From Home During COVID-19: Home Office Expenses

• For home office expenses to be deductible against employment income, the employee must be required by contract to incur such expenses, and one of two conditions must be met.

Business Use of the Home: Eligible Expenses

• A French Tax Court of Canada case reviewed various deductions claimed against the taxpayer’s business income derived from engineering and arbitration services related to the business use of his home.

Uncollectable Accounts: Making Them Valuable

• As many businesses are struggling to collect outstanding amounts, it may be worthwhile to identify any receivables which have previously been included in income that can be written off as bad debts.