﻿1 00:00:04,240 --> 00:00:12,200
Hello, my name is Ira Smith, president of Ira Smith Trustee & Receiver Inc.
2
3 00:00:12,840 --> 00:00:20,840
First, the Ira Smith Team hopes that you and your entire family are remaining safe,
4 00:00:21,040 --> 00:00:25,560
healthy and secure during this coronavirus pandemic.
5 00:00:25,760 --> 00:00:32,400
I want to assure you that Ira Smith Trustee & Receiver Inc. is fully operational.
6 00:00:32,600 --> 00:00:39,960
Both Brandon Smith and myself are holding all meetings by telephone or video chat.
7 00:00:40,160 --> 00:00:43,120
So if you have any questions at all about
8 00:00:43,320 --> 00:00:49,640
today's Brandon's Blog or anything else, give us a phone call, shoot us a message.
9
10 00:00:53,040 --> 00:00:57,440
Today's Brandon's Blog is about the topic
11
12 00:01:02,160 --> 00:01:04,600
I hope you can watch until the end of this
13 00:01:04,800 --> 00:01:10,640
video because I know you will get value from it.
14 00:01:19,880 --> 00:01:22,720
There are a lot of people
15 00:01:22,920 --> 00:01:30,760
now whose tax returns are being done, who may be in for a nasty surprise.
16 00:01:31,640 --> 00:01:39,640
What can people do if they don't have enough money to pay their income tax?
17 00:01:40,440 --> 00:01:42,840
Brandon goes through the history
18 00:01:43,040 --> 00:01:49,600
of the Canada Emergency Response Benefit (CERB)
19 00:01:49,800 --> 00:01:52,360
and asks the question, is it taxable?
20
21 00:01:54,480 --> 00:01:56,360
And the answer is yes.
22 00:01:56,560 --> 00:01:59,320
The government will issue
23 00:01:59,520 --> 00:02:07,800
what's called the T4e slip to everyone who received CERB payments.
24
25 00:02:11,560 --> 00:02:15,800
under this program is $12,000.
26 00:02:16,000 --> 00:02:20,680
Brandon then goes through the time where the federal government tried to stick it
27 00:02:20,880 --> 00:02:26,440
to self-employed people because it was not well explained and even
28 00:02:26,640 --> 00:02:32,600
Canada Revenue Agency people didn't fully understand whether the five thousand
29 00:02:32,800 --> 00:02:37,920
dollar threshold was gross income or net income from a business.
30 00:02:38,120 --> 00:02:40,320
But thankfully, the government has backed
31 00:02:40,520 --> 00:02:46,480
off that and is just going to rely on the taxation system.
32 00:02:46,680
--> 00:02:48,960 Brandon then talks about
33 00:02:49,160 --> 00:02:54,160
that it is taxable and that when CERB payments were being
34 00:02:54,360 --> 00:02:57,440
made, the government did not deduct tax
35 00:02:57,640 --> 00:03:02,600
at source, they wanted to get the money out as quickly as possible.
36 00:03:02,800 --> 00:03:07,520
And therefore, they didn't do any deductions at source,
37 00:03:07,720 --> 00:03:14,560
people used the money for food, for rent, for mortgage payments and more than likely
38 00:03:14,760 --> 00:03:18,640
didn't hold anything back to pay their income tax.
39 00:03:18,840 --> 00:03:22,400
And now they're at a point where,
40 00:03:22,600 --> 00:03:27,960
when they prepare their tax returns, they will see how much they owe.
41 00:03:28,160 --> 00:03:32,200
Now, if your only income in all of 2020
42 00:03:32,400 --> 00:03:38,040
was $12,000 of CERB payments, it's not going to be that horrendous.
43 00:03:38,240 --> 00:03:44,360
But if you had other income as well, it could be problematic.
44 00:03:44,560 --> 00:03:47,840
The only real tax planning you could have done
45 00:03:48,040 --> 00:03:53,240
is contributed to an RRSP to get an extra deduction.
46 00:03:54,120 --> 00:04:03,400
People who needed CERB probably didn't have excess money to invest into an RRSP.
47 00:04:03,880 --> 00:04:11,880
So what can you do? First, speak to your tax adviser, perhaps working with them
48 00:04:12,080 --> 00:04:19,160
you can lay out a realistic timetable to make the required total payment over
49 00:04:19,360 --> 00:04:23,200
a few months, and you can include a current dated cheque,
50 00:04:23,400 --> 00:04:29,480
plus the balance in post-dated checks when you file your tax return.
51 00:04:29,680 --> 00:04:32,440
Otherwise, the only other thing you can
52 00:04:32,640 --> 00:04:38,880
really do, because Canada Revenue Agency is going to be looking to try to collect
53 00:04:39,080 --> 00:04:44,560
every dollar possible as quickly as possible and have already started CERB
54 00:04:44,760 --> 00:04:49,800
audits to see who may have received it mistakenly.
55 00:04:50,000 --> 00:04:56,080
The only other thing you can really do is speak to a licensed insolvency trustee.
56 00:04:56,280 --> 00:05:00,680
If you're back to full time employment and have steady income,
57 00:05:00,880 --> 00:05:06,760
perhaps a consumer proposal will be the way to go for you if you cannot pay
58 00:05:06,960 --> 00:05:11,120
off your tax bill in a reasonably short period of time
59 00:05:11,320 --> 00:05:16,080
satisfactory to the tax collector at CRA.
60 00:05:16,280 --> 00:05:18,480
If a consumer proposal doesn't work
61 00:05:18,680 --> 00:05:25,760
for you, then perhaps bankruptcy is your only other option.
62 00:05:26,680 --> 00:05:30,080
So I hope you have found this is CERB taxable
63 00:05:30,280 --> 00:05:37,400
Brandon's Blog informative, I invite you to read the entire blog below.
64 00:05:37,600 --> 00:05:40,840
Again, the Ira Smith Team hopes that you
65 00:05:41,040 --> 00:05:48,280
and your family are safe, healthy and secure during this coronavirus pandemic.
66 00:05:48,480 --> 00:05:51,400
The Ira Smith Team is fully operational.
67
68 00:05:54,400 --> 00:06:01,680
are available at any time by telephone, email, video chat to answer any questions you
69 00:06:01,880 --> 00:06:06,880
may have about this Brandon's Blog or anything else at all.