Why file a tax return if you have no taxable income for 2016?
You might be eligible for the federal GST/HST Credit and the BC Sales Tax Credit. An individual is required to apply for the GST/HST Credit annually by filing a personal income tax return. Low-income seniors can also re-apply for the Guaranteed Income Supplement by filing an annual personal income tax return. In addition, you will be able to recover any money owing to you for the year, such as an overpayment of income taxes, Canada Pension Plan contributions (CPP), or Employment Insurance premiums.
Even if you have no taxable income, you might still be required to file a tax return and pay CPP if your net self-employed income is in excess of $3,500. You might also want to report your taxable income on a tax return in order to build your RRSP contribution room and become eligible for greater RRSP deductions in a future year.
If you are a student with excess tuition and education amounts in the year, you will want to file a tax return so that you can use the amounts for credits in another year. Also, if you have a business loss, you must file a return in order to establish your right to claim the loss in other years.
Finally, if your tax return was filed more than three years after the end of a particular taxation year, the Canada Revenue Agency might not issue a tax refund related to that return.
There are two convenient ways to file your personal income tax and benefit return with the Canada Revenue Agency (CRA).
NETFILE allows you to file your personal income tax return directly with the CRA using the Internet. The tax return must be prepared using a commercial tax preparation software package or a Web application certified by the CRA to meet their system requirements.
EFILE is an automated system that lets registered electronic filing service providers complete and send your tax return to the CRA electronically. To use this service, you must take your documents to a tax preparation service provider.
You can mail a paper tax return to your tax centre using the envelope included in the income tax package mailed to you by the CRA. Use the mail-in label if you have one, and make note of the tax centre address for future reference.
The general deadline for filing personal income tax returns and paying any taxes owing is April 30th of the following year. Since April 30, 2017 is a Sunday, your return will be considered on time if the CRA receives it on or it is postmarked on or before May 1, 2017.
However, if you are self-employed, the filing deadline for you (and your spouse or common-law partner) is extended to June15th of the following year.
If you are a non-resident of Canada filing a non-resident tax return in respect of rents received in Canada, the filing deadline is June 30th where a Form NR6 was filed, otherwise the return is due within 2 years from the end of the year in which the rental income is received.
Just remember, any taxes you owe are still due by April 30th, so make sure you pay your taxes by that date to avoid arrears interest charges. If you owe taxes and your return is filed late, you will be assessed a penalty and interest on the unpaid balance of tax due.
If you find the deadline is fast approaching and you still haven’t received receipts or information slips for some items, file your return anyway with a cheque for the estimated tax owing and an explanation. You are responsible for making any necessary adjustment to your tax return promptly when the documents become available. Failure to do so might result in additional penalties for filing your tax return with incomplete and incorrect information.
When Canada Revenue Agency (CRA) sends you an assessment notice showing additional taxes payable, review it carefully: your arithmetic might have been wrong or you might have claimed a deduction to which you weren’t entitled. Alternatively, Canada Revenue Agency might have incorrectly denied a deduction or credit to which you were entitled.
If your return was prepared for you, advise the preparer of any changes in the assessment.
If you prepared your own return and don’t understand the information on your notice, contact your local CRA tax services office immediately for a full explanation.
If the assessment is not in your favour and you aren’t satisfied with the Canada Revenue Agency’s explanation, you might want to consult a professional advisor and consider filing a Notice of Objection with the Canada Revenue Agency to dispute the assessment. Keep in mind individuals have until the later of (i) one year after the date of the filing deadline for the return and (ii) 90 days after the date the CRA sent the Notice of Assessment to file the objection.
Even if there are no additional taxes payable on your Notice of Assessment, you should still review it to ensure the information such as RRSP deduction limits, unused RRSP contributions, Home Buyers' Plan and Lifelong Learning Plan repayment requirements, taxable refund interest, or losses available for carry forward, is correct.
If you realize you made a mistake on your income tax return after filing, it is easy to request a change to your income tax return without having to re-file another return for that year.
You send a form T1-ADJ to Canada Revenue Agency (CRA) request a change to your income tax return for any of the 10 previous calendar years. For example, a request made in 2016 must relate to the 2006 or later taxation years. However before you file the adjustment request for a year you will first need to wait to receive your Notice of Assessment from the CRA for that year.
The T1 adjustment request can be made online by logging on to “My Account” or by mail. The CRA often processes adjustment requests made electronically faster than adjustment requests made by mail.
In some situations, adjustment requests can be quite complex so you might wish to consult a Chartered Professional Accountant before submitting the adjustment request to the CRA.
If you failed to report any income on your 2013, 2014, or 2015 return, and you miss or forget to report any income on your 2016 return, you may be subject to a penalty for the repeated failure.
The penalties for repeated failures to report income for 2016 and subsequent years apply where the unreported income exceeds $500. The penalty itself is equal to the lesser of 10% of the unreported income or 50% of the additional income taxes payable on the unreported income.
With the myriad of T-slips issued these days, it’s easy to miss or forget one or two slips, especially when the slips are issued at different times during the year. The CRA receives copies of all T-slips, and through a matching system endeavours to match each T-slip to a tax return to make sure all income is reported; this means a failure to report income will probably be caught by the CRA.
The best defence against the penalty for the failure to report income is to be vigilant about reporting your income, making sure to obtain any T-slips that you think might be outstanding and report the income from those slips. You can call the CRA, or log in to their My Account service, to verify the T-slips you should be reporting on your income tax return.
There are other potential penalties for failing to report income that may apply, and there are also Voluntary Disclosure and Taxpayer Relief measures in place that might allow you to avoid such penalties by making a voluntary disclosure of the omitted income. For assistance, contact a Chartered Professional Accountant.
There are relief measures in place for taxpayers unable to comply with a particular income tax filing requirement. Under the Canada Revenue Agency’s (CRA) guidelines for taxpayer relief, the CRA may grant relief from penalties and interest where the following types of situations exist and led to your inability to satisfy the tax obligations or requirements:
The Canada Revenue Agency will consider factors such as:
Your request for taxpayer relief has to be made within 10 years. For example, a request for taxpayer relief filed during the 2017 year can only deal with an issue related to 2007 or later years.
While powerful, the taxpayer relief measures are inherently subjective, requiring the CRA to exercise judgement. Policies and guidelines followed by the CRA may change from time to time. If you believe you have a basis for making a claim under the taxpayer relief provisions, contact a Chartered Professional Accountant for assistance.
If you run your own business, you are required to retain books and records that relate to a specific taxation year for a minimum of six years after the end of that year. If a particular year is under appeal, books and records for that year should be kept until the appeal is resolved and the time for any further appeal has expired. If a return has been filed late, the records must be kept for six years from the actual filing date.
Records include minutes of meetings, accounting records, and source documents such as invoices, receipts, cheques, bank statements, etc. The books and records must be sufficient for the Canada Revenue Agency (CRA) to confirm revenue, expenses and taxes paid. They must also be stored at a location in Canada unless CRA grants permission to hold them outside Canada.
If you use a computerized record-keeping system, there is a requirement to maintain an electronic backup and there are penalties for failure to do so. In addition, any paper records that you retain must be legible in the future. This means that you may need to copy certain receipts and invoices on paper that will not fade. Also, it is important to keep the detailed original invoices, not just the credit card slip and the monthly credit card statement, to document the nature and amount of the expenses.
As records over six years old might contain information that is still relevant for tax purposes, you might wish to consult a Chartered Professional Accountant or the CRA prior to destroying your records. As well, you might need permission from other government departments before you may destroy records related to those departments’ activities.
For more information, refer to the CRA Information Circular 78-10R5.
You can claim a tax credit for medical expenses in certain circumstances. For 2016, the tax credit is available only on the portion of the medical expenses that exceeds the lesser of 3% of your net income and $2,237 for federal tax purposes, and $2,085 for BC tax purposes.
In general, medical expenses include payments to private health insurance plans, fees to optometrists, opticians, dentists, medical doctors and chiropractors, and the cost of prescription eyeglasses, contact lenses, medical lab tests, hospital services and treatments, prescription medicines, and medical devices such as artificial limbs and dentures (this not an exhaustive list of eligible expenses). Medical expenses also include reasonable renovation costs to an existing residence, and incremental construction costs to make a new principal residence, to accommodate a disabled person, provided such costs would not normally be incurred by persons who are not disabled, and would not be expected to increase the value of the property. Eligible medical expenses may include reasonable travel costs to obtain medical services not available where you live. You may not claim the specific portion of any medical expenses that have been reimbursed by a medical plan.
Cosmetic procedures which are purely aimed at enhancing one’s appearance, including related expenses such as travel, which were incurred after March 4, 2010, are not eligible medical expenses.
You can claim a tax credit for medical expenses for any 12-month period ending in 2016. Just look for the consecutive 12-month period for which the sum of your medical expenses is the highest. Keep in mind, however, that you cannot claim medical expenses already claimed in the previous year.
You can add the medical expenses of your spouse and minor children to your own medical expenses. In addition, you can also add the medical expenses of certain other dependents subject to certain restrictions. In particular, caregivers are able to claim eligible medical expenses incurred in respect of a “dependent” relative if the caregiver pays medical or disability-related expenses of the dependent relative. For this purpose, a “dependent” relative is defined as a child who is 18 years of age or older, or a grandchild, parent, grandparent, brother, sister, uncle, aunt, niece or nephew, who is dependent on the taxpayer for support.
As either spouse can claim the medical expense credit, it would generally be more beneficial for the lower income spouse to claim the medical expense and maximize the tax credit.
If you would like more information about claiming medical expenses, seek the advice of a Chartered Professional Accountant.
You can transfer some income tax credits to your spouse or common-law partner.
The transferable credits are the age credit, disability credit, pension income credit, your own education and tuition fee credits, and the textbook tax credit.
Note that for 2017 and subsequent tax years, the education and textbook tax credits have been eliminated.
If you are able to reduce your taxes payable to zero without using all of your available credits, you might consider transferring some of these unused credits to your spouse’s return.
Don’t let your credits go to waste. Consult the advice of a Chartered Professional Accountant for more information.
If you gift an asset to someone, you are deemed to dispose of the asset at its fair market value which can result in a gain to the extent the fair market value of the asset exceeds its "The adjusted cost base (ACB) is usually the cost of a property plus any expenses to acquire it, such as commissions and legal fees.adjusted cost base" (ACB). If the gifted asset is a A capital property is an investment asset on which you expected to earn investment income.capital property to you, the resulting gain will be a capital gain (only half of the gain is taxed). The recipient of the gift is deemed to acquire the asset at its fair market value. There are some exceptions to this fair market value rule, most notably transfers of capital property to a spouse, a spousal trust, an alter ego trust, or a joint spousal trust, where the disposition is deemed to be at the particular property’s ACB unless the taxpayer elects otherwise.
If you gift an asset that has a fair market value less than its ACB, the resulting loss to you may be denied or suspended depending on the circumstances of the gift and your relationship to the recipient.
If you sell an asset to a non-arm’s length person for a price that is less than fair market value, for income tax purposes you are deemed to sell the asset at fair market value but the purchaser is deemed to buy it at the agreed price so their ACB is lower than your proceeds of sale. If you sell an asset to a non-arm's length person for a price greater than its fair market value, the purchaser is deemed to have paid fair market value, meaning the purchaser's ACB is reduced to the asset's fair market value without a compensating reduction in your proceeds of disposition. In both cases, the one-sided adjustment can be quite punitive because it results in a double tax – it pays to carefully consider and document the fair market value in all non-arm’s length sales.
If you sell an asset to an “An affiliated person could be your spouse, or certain corporations that you or your spouse control.affiliated person” at a loss (where the fair market value is less than the ACB), the loss will be suspended until that asset is sold to an “unaffiliated” person.
If you make an RRSP or TFSA contribution by transferring an investment asset to your RRSP or TFSA, you will be deemed to have disposed of the investment at its fair market value. If the fair market value of the investment exceeds its ACB, you will have a capital gain from the contribution. If the fair market value of the investment is less than its ACB, the capital loss will be denied.
If you plan to gift, sell, or transfer an asset to a non-arm’s length person or to your RRSP or TFSA, contact a Chartered Professional Accountant to help you assess the income tax implications and planning options.
The volunteer firefighters tax credit is available to volunteer firefighters who perform at least 200 hours of volunteer firefighting services for their communities during the year. Volunteer firefighting services may consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department, and participating in required training for the prevention or suppression of fires. Volunteer service hours performed by a firefighter for a fire department will be ineligible if the firefighter also provides firefighting services, other than as a volunteer, to that fire department. The credit is calculated by multiplying the lowest personal income tax rate for the year (15% in 2016) by $3,000. For 2016, the non-refundable credit is $450.
Eligible volunteer firefighters who currently receive honoraria from a government, municipal, or another public authority in respect of their duties as an emergency volunteer will be able to choose between the tax credit and continuing to be entitled to the existing tax exemption of up to $1,000 for honoraria.
An individual claiming the credit may be required to provide written certification from the chief, or a delegated official, of the fire department, confirming the number of eligible volunteer firefighting hours performed.
Consult a Chartered Professional Accountant for more information.
You can claim all of your 2016 donations plus any donations made in any of the previous five years that have not previously been claimed, to an annual limit of 75% of your net income. The first $200 of donations are eligible for a tax credit calculated at 20.06% (federal and BC combined), and donations in excess of $200 are eligible for a tax credit calculated at 43.7% (or 47.7% in some cases) combined.
If you are married, consider claiming all of your donations on one spouse’s tax return. By claiming donations on only one spouse’s tax return, you avoid having the first $200 of donations subject to the reduced tax credit twice, saving you up to $47 of income tax.
If you are a first-time donor, the federal portion of the tax credit is enhanced by a further 25% for up to the first $1,000 of donations in the year. This “super credit” can only be claimed in respect of one taxation year from 2013 to 2017, and is usually only available in the year you make your first donation unless none of the donation has previously been claimed. You may wish to consider accelerating next year’s donations into that first year to make sure you maximize the potential super credit. This super credit is only available through the 2017 taxation year.
You don’t have to claim your donations made in 2016 in your 2016 tax return. If, for example, you have other deductions sufficient to eliminate your taxes, then there is no benefit to claiming the donations in this year. Instead, carry forward your donations; they can still be claimed in any of the next five years.
You are required to attach the official charitable donation tax receipts to your tax return if you file a paper tax return. If you file your tax return electronically, retain your donation receipts because the Canada Revenue Agency may ask for them later. Pledge slips, cancelled cheques, credit card slips, and other proofs of payment are not acceptable substitutes for an official donation receipt; however these documents may be requested by the CRA if your tax return is selected for review. If you have lost your official donation receipt, contact the charity for an official duplicate. Donations to foreign charities generally do not qualify for the charitable donations credit, but there are special rules to allow credits for donations to some US charities and certain other prescribed foreign charities.
Every receipt from a Canadian charity or athletic association must contain a statement that it is an “official receipt for income tax purposes". The receipt must also conform to the prescribed format, and include the name of the organization, its address, the registration number assigned to it by the Minister of National Revenue, the date, and the amount of the donation.
Note that the Canada Revenue Agency administratively allows a taxpayer to initially choose which spouse or common-law partner will report a donation or gift and allows for the subsequent transfer of any carry forward balances from one spouse to the other spouse.
Consult a Chartered Professional Accountant to maximize your donation tax credit.
Looking to sell some marketable securities and make a donation? You can kill two birds with one stone by donating the marketable securities directly to your charity of choice instead, and save some tax while you’re at it.
The taxable capital gain on the eligible amount of publicly traded securities donated to registered charities is nil. Meanwhile, the charitable donation credit is still based on the full fair market value of the gifted securities. Note, however, that limitations exist for donations of shares issued pursuant to a flow-through share agreement entered into after March 21, 2011.
Publicly traded securities include shares, debt obligations, or rights listed on a designated stock exchange, or units of mutual fund trusts or the capital stock of a mutual fund corporation.
Thinking of donating marketable securities? Consult a Chartered Professional Accountant to determine whether your securities qualify for the reduced capital gains inclusion rate.
If you are unable to use certain deductions or tax credits in a particular tax year, you might be able to use them in a future year. Common carry-forward items include:
An individual is generally deemed to dispose of all their capital property at fair market value immediately before their death. If the property is left to a spouse or common-law partner (or to a qualifying trust), the proceeds of the deemed disposition may be the cost amount instead of the fair market value which defers the gain.
There can be additional complexities for private company shares held at death that can result in double taxation to the estate. Tax planning may be necessary to avoid the double taxation.
Notifying Government Authorities and Financial Institutions
The executor or administrator of the estate should notify authorities, including the Canada Revenue Agency and Service Canada, and financial institutions of the death and make arrangements to stop payments or transfer them to a survivor for the following:
Obtaining a Clearance Certificate
An executor or administrator of an estate may want to obtain a clearance certificate from CRA before distributing any property under their control to the beneficiaries of the estate. Without a clearance certificate, the executor or administrator may be liable for any amount the deceased owes to the CRA.
Being an executor or administrator of an estate includes responsibility for complex tax matters. Consult a Chartered Professional Accountant for assistance.
Since 2009, individuals 18 or older who were residents of Canada for income tax purposes can contribute amounts to a Tax Free Savings Account (TFSA). The amounts that could be contributed each year have varied, starting at $5,000 per year in 2009, rising to $5,500 for 2014, rising again to $10,000 for 2015, and then dropping back to $5,500 for 2016 and 2017.
Contributions to a TFSA are not tax deductible and the contribution room can be carried forward indefinitely. Investment income and capital gains earned in the TFSA are tax-free and you can make tax-free withdrawals from a TFSA at any time. When you make a withdrawal, the amount withdrawn will be added to your contribution room for the following year and can be re-contributed in the future.
TFSAs are generally allowed to hold the same investments as RRSPs. This includes cash, mutual funds, publicly traded securities, GICs, bonds and certain shares of small business corporations. There are substantial penalties if a TSFA holds an investment that is a “prohibited investment”.
Unlike RRSPs, TFSA contribution room is not lost when you make a withdrawal and you do not have to wind it up when you reach age 71. Your TFSA can be maintained for your entire lifetime.
The Canada Revenue Agency only tracks TFSA contribution room for eligible individuals who file personal tax returns, which means you should file a return if you are 18 or older even if you do not have any taxable income.
Complex attribution rules prevent spouses from simply splitting joint investment income between them to equalize their tax brackets. Joint investment income includes interest on joint bank accounts, investment income from joint brokerage accounts, rental income from jointly owned real estate, and capital gains from the disposition of jointly owned investments.
The attribution rules require that joint investment income be allocated between spouses based on each individual's contribution of funds to acquire the investment. Spouses with joint investments should be prepared to support their allocation of investment income by keeping track of the source of the funds used to acquire the joint investments.
There are opportunities to split investment income between spouses while not being subject to the attribution rules discussed above. Contact a Chartered Professional Accountant to help you review your tax planning strategies to potentially take advantage of income splitting with your spouse.
Generally investment administration fees or investment management fees are tax deductible if the costs are incurred to earn investment income. These fees are not tax deductible if they relate to your registered retirement savings plan (RRSP), A registered retirement income fund (RRIF) is an arrangement between you and a carrier (an insurance company, a trust company, or a bank) that CRA registers. You transfer property to the carrier from an RRSP, a PRPP, an RPP, an SPP, or from another RRIF, and the carrier makes payments to you.registered retirement income fund (RRIF), or tax free savings account (TFSA) because the investment earnings on these plans are not taxable (or they are tax-deferred). You should consider talking to your investment advisor or RRSP administrator to see if any portion of the administration fee or investment management fee you are paying on your RRSP, RRIF, or TFSA relates to your non-registered accounts, therefore, tax deductible.
If you pay administration fees or investment management fee for your RRSP, RRIF, or TFSA as charges against these particular investment accounts, consider asking your investment advisor whether you can personally pay this (instead of the fee being paid from the registered account). This will not make the fee tax deductible but it will allow your RRSP, RRIF, and TFSA to grow slightly faster. Your direct payment of the RRSP, RRIF, or TFSA administration fee or investment management fee will not be considered a contribution to either your RRSP or TFSA.
If you have a question about the deductibility of administration fees or investment management fees for your RRSP, RRIF, or TFSA, you should consult a Chartered Professional Accountant.
If you are a Canadian resident and have received income from foreign sources, you must report this income in Canadian dollars on your tax return.
To convert the foreign source income, you must use the rate of exchange that was in effect at the time the income was received or the average exchange rate for the year as published by the Bank of Canada if the amount was received at various times throughout the year.
You must report the amount of foreign income before deducting any tax that was withheld at the source. However, if you have paid tax on that same income in a foreign country, the amount of foreign tax paid might be eligible for a foreign tax credit or deduction on your Canadian income tax return.
Some foreign source income might also be exempt from tax in Canada, or in the foreign country, under international tax treaties.
There might be several tax planning opportunities, depending on the source and type of foreign income you received. To help you identify these opportunities, consult a Chartered Professional Accountant.
If you were 65 years of age or older on December 31, 2016, then you might be eligible for some additional tax breaks.
You might be eligible to claim a tax credit for being 65 years of age or older, depending on your income level. The maximum age credit is reduced once net income for the 2016 tax year exceeds $ 35,927 for federal tax purposes and $33,473 for BC tax purposes, and declines to zero when net income exceeds $83,427 for federal tax purposes and $63,453 for BC tax purposes. In 2016, the maximum combined federal and British Columbia age tax credit can reduce your taxes payable by as much as $1,296.
You might also be eligible to claim the federal pension income tax credit, calculated on the lesser of $2,000 ($1,000 for BC) and the eligible pension income you included in income for the year. The combined federal and British Columbia tax credit can reduce your taxes payable by as much as $351.
Eligible pension income includes annuities, but not lump sum payments, you receive from superannuation or registered pension plans, RRSP annuities, or payments from a registered retirement income fund (RRIF) and annuity payments out of a deferred profit sharing plan. Old Age Security and Canada Pension Plan income do not qualify for the pension credit, although US Social Security will qualify to the extent that it is taxed in Canada. The pension credit is also available to individuals under age 65 on life annuity payments from superannuation or pension plans and on certain annuity payments arising by virtue of the death of a spouse.
If you are 65 or older and your only source of pension income is from Old Age Security and Canada Pension Plan payments, but you have an RRSP, you may qualify for the Pension Income Credit by transferring a sufficient amount of RRSP funds into a RRIF or annuity to create qualifying pension income.
If you are under 65 and receiving income from a pension plan, or income from RRSP annuities, RRIFs, and certain other annuities as a result of the death of your spouse, you may also qualify for the credit.
You might also be able to file an election to split up to 50%of your eligible pension income with a spouse or common-law partner. If you were 65 or older during 2016, consult a Chartered Professional Accountant to see what tax breaks you might be eligible for.
Canadian residents are required to report their worldwide income on their Canadian income tax return. This includes pension income from foreign pension plans and US social security benefits. Under the tax treaty between Canada and the US, only 85% of US social security benefits are taxable in Canada. However, effective for the 2010 and subsequent taxation years, Canadians will be able to claim an additional deduction of 35% of US social security benefits if they have been resident in Canada and have continuously, since before 1996, received US social security benefits in each taxation year. The additional deduction can also be claimed if the benefits are paid to a taxpayer in respect of a deceased spouse or common-law partner who received benefits prior to 1996.
Some foreign pension income is eligible for pension income splitting. Generally, Canadian residents who are 65 years of age or older at the end of year can transfer up to 50% of their pension income to their spouse or common-law partner if they jointly sign and file Form T1032. Where the Canadian resident is not 65 years of age at the end of the year, only “qualified pension income” that is eligible for the $2,000 pension income credit is eligible for pension income splitting.
A Canadian resident may transfer certain payments from a foreign pension plan to an RRSP provided the amount is included in income and attributable to services rendered by the individual, or his/her spouse or common-law partner, in a period throughout which the individual, or his/her spouse or common-law partner, were not resident in Canada. The transfer should be made within 60 days following the end of the year in which the income is received, and it may be made over and above the individual’s regular RRSP contribution room.
A foreign tax credit can be claimed on the Canadian income tax return to reduce the person’s overall Canadian tax liability where the foreign pension income is taxable in the foreign country. Taxation of a foreign pension received by a resident in Canada may vary depending on the tax treaty Canada has with the payer country. If you earn foreign pension income, contact a Chartered Professional Accountant to determine whether the foreign pension income is taxable in Canada and how you can get a foreign tax credit for tax paid to another country.
If your 2016 net income exceeds $73,756, all or a portion of your 2016 Old Age Security (OAS) will be clawed back. The clawback is $0.15 for each dollar of income in excess of $ 73,756 to a maximum of the total amount of OAS received.
Each OAS payment you receive is reduced by an estimate of the clawback tax. The clawback for the period from January through June 2017 is based on your 2015 net income. The reduction in the payments for July to December 2017 is based on your net income for 2016.
This clawback is based on your individual net income, not on family income. Splitting income with other family members may help to reduce the OAS clawback.
Proper income splitting planning strategies may be implemented over several years to minimize the amount of a potential OAS clawback. If you have not planned ahead, you can still take advantage of pension income splitting with your spouse or common-law partner to reduce your individual net income. You can elect to split current eligible pension income with your spouse or common-law partner under Canada’s pension income splitting rules.
Consult a Chartered Professional Accountant to find out more.
If you are the executor or administrator of an estate, it is your responsibility to deal with the estate’s tax matters including:
Preparing and filing income tax returns of the deceased
The executor or administrator of an estate may need to file several income tax returns for the deceased including:
If the executor or administrator of an estate chooses not to file any of the optional returns for the deceased, they must report all the income that would otherwise be reported in the optional returns in the deceased’s final return.