Tax Lec 5

Death Benefits

Inclusion section for death benefits for a deceased employee’s surviving spouse or common-law partner as defined in ITA 248(l): 1st $10,000 is tax-free and is not a death benefit, the rest is taxable

Payments/Withdrawals from deferred income plans

Payments out of the following plans are included in other income when received (and do not get any preferential tax treatment; i.e., they do not get the dividend tax credit, capital gains treatment, or foreign tax credits).

Scholarships, Prizes and Research Grants

CPP Contributions on Self-employed earnings

Moving Expenses

Child Care Expenses

EI Benefits

Include amounts received in income, and deduct any required repayments.

Spousal and Child Support

RESP and CESG

Registered Disability Savings Plans (RDSP)

TFSA

Tax Planning with TFSA and RRSP note

o   Consider earning non-preferentially taxed income in TFSAs and RRSPs (e.g., foreign dividends, interest) and preferentially taxed income personally/ outside of registered plans (e.g., Canadian public company dividends, capital gains) for maximum tax advantage

Earned income fro child-care and earned income for RRSP