Tax Cheat Sheet
Luk’s Tax Cheat Sheet
Types of Income and Net Income:
Segment A: Employment Income, Business Income, Property Income, Other (alimony)
Segment B: Taxable capital gains less allowable capital losses either + or zero
Segment C: Other deductions ie. RRSP contribution, moving expense, etc.
Segment D: Employment, business or property loss; allowable business investment loss
Employment Test:
Control Test: An employer has the right to tell an employee what to do, when, and how
Ownership of Tools: Employer normally provides tools to an employee
Profit/Loss Test: Employer assumes all risk of profit or loss on job
Integration: Employees are usually integral whereas contractors are accessories
Taxable Benefits:
Board and Lodging
Low-rent housing
Automobiles
Near-Cash gifts
Non-Cash gifts/awards greater than $500
Group term life insurance policies
Holidays
Premiums for medical care insurance
Interest-Free loans
Financial counselling
Reimbursement for day care (unless on-site)
Fitness, gym or health club membership
Public Transit Passes
Automobiles:
If the employer purchases the vehicle: Employment use <50%: Standby Charge: cost of the car x 2% x # of months Operating Charge: total personal km x $0.27
Employment use >50% Standby Charge: cost of the car x 2% x #of months x Operating Charge: lessor of: 50% of standby charge OR total personal km x $0.27
If the employer leases the vehicle: Employment use <50% Standby Charge: monthly lease x x # of months Operating Charge: total personal km x $0.27
Employment use >50% Standby Charge: monthly lease x x # of months x Operating Charge: lessor of: 50% of standby charge OR total personal km x $0.27
Employee Loans:
Taxable benefit = loan amount x prescribed rate - loan amount x interest paid
Tax cost = taxable benefit x tax rate
Effective rate = (tax cost + loan amount x interest paid) / loan amount x 100%
Relocation Expense:
Reimbursement for costs of financing = taxable
Types of Income and Net Income:
Segment A: Employment Income, Business Income, Property Income, Other (alimony)
Segment B: Taxable capital gains less allowable capital losses either + or zero
Segment C: Other deductions ie. RRSP contribution, moving expense, etc.
Segment D: Employment, business or property loss; allowable business investment loss
Employment Test:
Control Test: An employer has the right to tell an employee what to do, when, and how
Ownership of Tools: Employer normally provides tools to an employee
Profit/Loss Test: Employer assumes all risk of profit or loss on job
Integration: Employees are usually integral whereas contractors are accessories
Taxable Benefits:
Board and Lodging
Low-rent housing
Automobiles
Near-Cash gifts
Non-Cash gifts/awards greater than $500
Group term life insurance policies
Holidays
Premiums for medical care insurance
Interest-Free loans
Financial counselling
Reimbursement for day care (unless on-site)
Fitness, gym or health club membership
Public Transit Passes
Automobiles:
If the employer purchases the vehicle: Employment use <50%: Standby Charge: cost of the car x 2% x # of months Operating Charge: total personal km x $0.27
Employment use >50% Standby Charge: cost of the car x 2% x #of months x Operating Charge: lessor of: 50% of standby charge OR total personal km x $0.27
If the employer leases the vehicle: Employment use <50% Standby Charge: monthly lease x x # of months Operating Charge: total personal km x $0.27
Employment use >50% Standby Charge: monthly lease x x # of months x Operating Charge: lessor of: 50% of standby charge OR total personal km x $0.27
Employee Loans:
Taxable benefit = loan amount x prescribed rate - loan amount x interest paid
Tax cost = taxable benefit x tax rate
Effective rate = (tax cost + loan amount x interest paid) / loan amount x 100%
Relocation Expense:
Reimbursement for costs of financing = taxable