EMPIntro - DRAFT INCOME FROM AN OFFICE OR EMPLOYMENT F....

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Unformatted text preview: DRAFT INCOME FROM AN OFFICE OR EMPLOYMENT F. BARRY GORMAN, PHD, CA, TEP INTRODUCTION PART I EMPLOYMENT INCOME VERSUS INCOME FROM SELF-EMPLOYMENT 1. Overview 2. Control Test 3. Specific Result Test 4. Economic Reality Test 5. Integration Test 6. Entrepreneurial Test 7 Employment Contract PART II WHAT IS INCLUDED IN TAXABLE INCOME? 1. General Principles 2. Salary, Wages, and Other Remuneration (a) General Rules (b) Part-Time Employees 3. Advances 4. Employee Benefits (a) General Rule (b) Statutory Benefits (i) Board and Lodging (ii) Personal Use of Employers Automobile (iii) Payments by Employer to an Employee (iv)Group Term Life Insurance Premiums (v) Low Interest Loans (c) Other Employee Benefits (i) Personal Use of Employers Aircraft (ii) Tuition (iii) Employer Paid Professional Membership Fees (iv)Employer Sponsored Event (v) Computers Provided to Employees (vi)Taxi Expense (vii) Free Parking (viii)Technical News 40 Administrative Changes (d) IT-470 Employee Benefits (i) Holiday Trips 1 (ii) Gifts and Sales/Incentive Plan Awards (iii) Health Insurance Plan Premiums (iv)Travel Expenses of Employees Spouse (v) Reimbursement of Cost of Tools (vi)Loyalty Programs (vii) Counselling Services (e) Excluded Benefits (i) Statutory (ii) IT-470 Non-Taxable Privileges (f) Allowances (i) General Rule (ii) Statutory Exemptions (g) Other Forms of Income from Office or Employment PART III DEDUCTIONS FROM OFFICE OR EMPLOYMENT INCOME 1. General Rule 2. Registered Pension Plan Contributions (a) Annual Pension Deduction Amount (i) Defined Benefit Plans (ii) Defined Contribution Plans (b) Amounts Transferred Between Retirement Plans 3. Deductions Based on Direct Expenditures (a) Legal Fees Incurred to Collect or Establish a Right to Back Wages or Salary (b) Travel Expenses (c) Motor Vehicle Operating Expenses (d) Annual Professional Membership Dues (e) Office Rent and Home Office Expenses (f) Assistants Salary (g) Supplies (h) Union Dues or Fees Paid to an Association of Public Servants (i) Motor Vehicle Interest and Capital Cost Allowance (j) Aircraft Expenses (k) Meals (l) Reimbursement of Previously Taxed Employment Income (m) Capital Equipment Acquired by an Employee for Employment Purposes 4. Employers Certification 5. Occupation-Related Deductions (a) Salespersons (b) Artists and Musicians (c) Apprentice Mechanics 2 INTRODUCTION As employment is their principal income source, the taxation of net employment income is the aspect of taxation most familiar to Canadian taxpayers. Preparation of their individual T1 return is rarely difficult. Income is evidenced by an information slip from the payer, virtually all deductions are itemized on the tax form, and tax payments have been deducted at source. So straightforward is the average employees tax affairs that reference to anything other than the General Income Tax and Benefit Guide is rarely required. Even for taxpayers with more complicated tax affairs, the taxation of employment income is relatively less complicated than the taxation of non-employment...
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This note was uploaded on 01/07/2012 for the course ACCT 4453 taught by Professor Gorman during the Spring '11 term at Dalhousie.

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EMPIntro - DRAFT INCOME FROM AN OFFICE OR EMPLOYMENT F....

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