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Most TFSA investors prefer dividend stocks to hold in their tax-advantaged accounts. All interest, income, and gains from the account are tax-exempt. Similarly, seniors maximize their TFSAs to avoid or lessen the impact of the 15% Old Age Security (OAS) clawback. Tax-conscious Canadians use their Tax-Free Savings Accounts (TFSAs) to create non-taxable income. You can use these tax breaks to purchase stocks or investments and hold them in your tax-advantaged accounts. There are many ways you can use these tax breaks in order to boost your investment income. However, the CRA requires an employer-signed T2200S form. Individual taxpayers with higher home-office expenses to write off can use the detailed method. The maximum amount is $400 or $2 per day for 200 working days in the temporary flat rate method. There are two ways to go about the claim. This tax break is available if you spent at least 50% of your working hours at home for four consecutive weeks this year. The CRA is aware that many Canadians still work from home or are doing remote work in 2021. Also, the additional amount reduces as you go up the income tax bracket. The income up to the extent of the new BPA is non-taxable, provided net income is $151,978 or less. Thus, an individual taxpayer gets an additional tax break of $579. For the 2021 tax year, the BPA is $13,808 versus the previous year’s $13,229. The amount adjusts higher annually so people can cope with inflation. New BPAĮvery Canadian taxpayer is entitled to the claim basic personal amount (BPA) during tax seasons. Apart from early preparation, it would be best to review available tax breaks to reduce your tax payables. You don’t want to be late because the CRA charges penalties for late filing of tax returns. The Montreal Gazette invites reader questions on tax, investment and personal finance matters.If you’re a taxpayer, mark April 30, 2022, as a very important day in your calendar. Canada Revenue Agency explains it as follows: “A survivor can be named in the deceased holder’s will as a successor holder to a TFSA, if the terms of the will state that the successor holder receives all of the holder’s rights.” As it turns out, the TFSA transfer also can occur if it’s determined from the will that person would be the “successor holder” and ultimate beneficiary of the TFSA assets, even if it isn’t specified. What about wills that don’t say that specifically, for instance those that predate the creation of TFSAs, or where everything is left to the spouse?Ī: Excellent question. Q: You wrote recently that if a spouse is designated in a will as beneficiary of a deceased person’s TFSA (tax-free savings account), the assets can be transferred to their own TFSA. Otherwise, the husband could claim the exemption for his 50 per cent share because you would still be spouses. In that case, Moraitis said, the husband’s share should not qualify for the exemption and would be subject to capital gains tax. The issue for him is whether or not your separation was subject to a judicial separation or written agreement, which if applicable meant you were no longer spouses. If you are the owner of the house and live in it, you can claim the exemption on your 50 per cent, but it could have been problematic for your husband if he had bought a property on his own after the split. This is important since only one house can be the principal residence for a couple. Nick Moraitis, tax partner at accounting firm FL Fuller Landau LLP, says that under the tax act, a couple that has separated but not divorced is generally considered to still be spouses, with exceptions for the principal residence exemption.
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It is my principal residence and I understand I’ll pay no capital-gains taxes when it gets sold, but what is his tax status with regard to the house? I’m concerned a part of our children’s inheritance will go to taxes.Ī: This may not turn out too badly, though it might have been advisable to settle this sooner. We bought a house on the South Shore together in 1975, on which I paid the rest of the mortgage and assorted repairs and where I still live, while he rents an apartment in Ontario. Q: My husband and I have lived apart and in different provinces for more than three decades but never legally separated. This advertisement has not loaded yet, but your article continues below.