T2125 on Wealthsimple Tax (formerly Simple Tax)
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- Опубликовано: 1 июн 2024
- Sit with me as I put my T2125 totals into Wealth Simple Tax for personal taxes! This is the second video of two in my mini-series on "How I do my T2125". Find the first video, which shows how I prepared my T2125 spreadsheet totals here: • How I Do My T2125 Stat...
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Thank you so much, Naomi. I started my small business last year and try to file my return this month, I found your videos on youtube which is practical and really helped me a lot! I truly appreciate your simple and clear explanations!
I'm so glad you found this helpful! I wish you wild success in your new business!
@@NaomiWilkins Thanks! I have a question and would like to ask your opinion - the business I have is a direct sale/multilevel marketing of a company's health product and I make money only on a commission basis, so the first year (especially covid time) is hard, the purchase of these products mainly went to myself 50%(to try and get results in order to convince the customers to buy); many free samples to give away20%, and sales at my purchase price 30% (I don't make money from buyers directly). so my cost is much greater than the commission and sales I made last year. I basically recorded all these in the COGS section, but I also heard people saying the samples and use for myself should go to the 'advertising' and 'supply' section. do you think it is necessary to separate these costs into different sections? many thanks!
@@linlsunrise Cost of Goods Sold are costs related directly to the sale of a product. If the products you purchased you did not sell, (and they're not sealed and in inventory for sale at a later date) then they would not be cost of goods sold. So I agree that free samples would be more related to advertising. The ones you resold at cost, I could see them being COGS. I'm not a tax professional, so I cannot give advice on your situation, but those productions you used for yourself may have some personal use allocation percentage, I'm not sure. But the business portion of the expense, I can see that going to supplies.
Hi Naomi! Thank you so much for this video! Really helped with my taxes! The way you explain seems like everything is super fun and easy to do (even with all the tension in my case as a 1st year as a self-employed!!)
Thank you for such a lovely comment! I'm so glad you found it helpful!
Wonderful content!!! Keep growing!
Thank you! I'm so glad you found this helpful!
Hi Naomi, I hope you are doing great. I have to come back to you for a wealthsimple question of filing T5013, just in case you have some inputs and experience on this. I have capital gain and rental loss from T5013 and they are well populated to corresponding lines on T1 federal form. but they are not going onto provicial form at all which is TP1 in my case. Is it wealthsimple tax good tool for T5013? any advise? Based on wealthsimple tax agent, the software is supposed to do the provincial part, which appreantly it doesn't...many thanks!
Will appreciate if you can do video on filing personal tax return using simple tax.
Thank you so much for kind help. Could I just simply use the FMV as 2020 opening to calculate CCA? You mentioned to put the FMV in the additions section of the T2125. I am not able to find the additions section for vehicle (only see additions section for equipment, other properties) , could you tell where is the additions section located in T2125?
Hi NanDe! The additions section is for all capital asset additions, vehicle and non-vehicle :). A vehicle is either a class 10 or a 10.1. Find out which class it is from CRA's page here: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties.html
Hope this helps!
Your explanation is very clear and helpful. I just stated bookkeeping and taxation. Do you have training video for taxation? Thanks
Hi there! I'm glad you found this helpful! No, I do not have a training video for taxation. My deep knowledge is with bookkeeping, not with taxes. But here's a great course from some tax pros I follow: members.videotax.com/courses/newbies-to-ninjas-Personal-Tax
Hi Naomi, Thank you so much for the great video. I have a question, I bought a car years ago, but just started my business last year. How could I calculate the opening of vehicle depreciation?
Hi NanDe! If you bought a vehicle for personal use before starting the business, and started using it in your business in your current tax year, then CRA considers this a change in use. You need to determine what the "Capital Cost" is for business purposes at the moment of this change in use. That is to say, you need to determine what the "Fair Market Value" is of the vehicle when you started using it for business, and that is the amount to put in the additions section of the T2125. You can do this by looking up your vehicle at either www.kbb.ca/ or www.canadianblackbook.com/. Print out the final result for your records if ever reviewed by CRA how you determined the Fair Market Value. If the FMV is greater than the amount you purchased the vehicle for, contact a tax professional, as then there could be implications. Find out more detail on CRA's website: www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002/t4002-6.html#tocch4d and scroll down to the section about "Changing from Personal to Business Use". Hope this helps!
Thank you for the video Naomi. I'm still confused about a few items and hope you're able to answer 🙂 For CCA of car, if it's purchased the same year, there's a 1/2 yr rule? Just say car is $10k. Would I put in $5k instead in the addition box?
Also, if I'm not planning to claim CCA for an asset that year, do I still have to enter them? Thanks!
Hi Candy! If you are using a tax program, it will do the half year rule for you, so you put the full amount of the addition in. On Wealthsimpletax, the best place to add the vehicle asset is in the motor vehicle expenses section, as then it will also do the %biz vs personal use calculation on the CCA too. But you should look to see if the vehicle is a class 10 or 10.1 asset. There is more information on that here: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-22900-other-employment-expenses/capital-cost-allowance/classes-depreciable-properties.html
You can put the addition in even if you're not claiming the CCA, as you can specify 0.00 in the "CCA claimed" column. But, I am not a tax professional, so, I am not sure of the best course of action for your scenario.
@@NaomiWilkins Thank you for your reply! What if the vehicle wasn't purchased the same year? In that case, 1/2yr rule doesn't apply. How does the program know when one purchased something?...
Hi Candy! I'm not a tax professional, so I cannot give guidance for your specific situation. But I can tell you what I did; My vehicle was an addition to the business in my first year of business, at the fair market value of the vehicle that year, that I found by looking it up on Kelly Blue Book Canada.
Hi Naomi! Thank you for your great video. I can't figure out how to claim ITCs using Wealthsimple Tax. I am able to do in Intuit TurboTax, but not clear in Wealthsimple. Can you explain please?
Hi Lyla! I'm glad you found the video helpful! Do you mean how to claim the "GST/HST Input Tax Credits", aka the GST/HST paid on business expenses? If so, those are not claimed on your T2125. If you are NOT registered to collect GST/HST with CRA, then you do not get these back, and the full amount you paid for the purchase is all expense. If you ARE registered to collect GST/HST for CRA, then you get the ITCs back when you file your GST/HST return (the amount you collected minus the amount you paid on expenses is how you 'get them back' on that return). And because you get them back, they are not considered expense, and are not included on the T2125. Hope this helps!
@@NaomiWilkins can you elaborate on line 8450? In your example, a landscaper purchases $3900 bricks but can't claim them as an expense right? So the GST you paid on the material can't be offset from ITC when you file GST reporting period. For example, if someone is registered with GST and they are in exterior renovation business and had to purchase materials such as vinyl siding for a job you wouldn't be taxing the customer twice because you are the one that purchased the material. I'm kind of confused, do you not get back or offset the GST you had to pay for the materials you purchased?
@@jvirg Hi There! I don't quite understand your question. If a landscaper purchased bricks, he can claim them as a cost. I would put that on line 8320. If the bricks cost $1,000 before tax, and the landscaper was in Ontario, where HST is 13%, they would pay $1,130 to the brick supplier. If the landscaper was registered to collect HST, and he charged $3,000 + HST to the customer, their invoice total would be $3,390. They would have $3,000 in revenue, and they would collect $390 for CRA, and send that $390 to CRA... BUT! They also deduct the HST they paid on their expenses from that amount. So in this simple example, they would subtract the $130 paid on the brick to the brick supplier from the $390 they collected, and remit the difference to CRA: $260. It is for this reason that the HST is not an expense. But the brick is. If you purchased the brick in December, and finished the landscaping in January, and that was the only thing in that happened in this example... you would get a refund of $130 in December from CRA (Get the HST you paid on business expenses and costs back), and then you would remit the $390 you collected on the January invoice to CRA when you filed January HST.
Does this help clarify at all?
@@NaomiWilkins Yes it make sense thanks! This was my first time doing it myself and I looked at what the accountant used last year and she did have it on line 8320 and the accountant I used before this one had it on line 8811? I ended up putting it on 8450 because Wealthsimple didn't give me 8320 unless there's some other way to get to that line? It's too late though I sent off and also filed GST return.
Hi Naomi, thank you so much for this helpful video. I am a freelance product designer and your information helped me a lot. I do have a question and would be grateful for your assistance. As an international student, I am only permitted to work up to 20 hours per week, and as a result, my income is insufficient to cover my tuition fees. Therefore, my sister (who resides in the U.S.) is providing me with financial support. I am curious to know if I am required to pay taxes on the money she sends me. I have attempted to search for relevant information, but unfortunately, I have not been successful. I would appreciate it if you could suggest any useful keywords or links. Thank you in advance. 🙏🙂
I'm so glad you found the video's helpful!
As far as I know, money sent by your sister is not taxable, but I am not a tax professional.
I did find these links for you that you may find helpful though!
CRA: Gifts & Inheritances listed as amounts not reported or taxed: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/amounts-that-taxed.html
Tax Tips: There is no Gift Tax in Canada: www.taxtips.ca/personaltax/when-are-gifts-and-inheritances-taxable.htm#:~:text=There%20is%20no%20%22gift%20tax,include%20this%20in%20their%20income.
Findr: Not taxed on funds from overseas as long as it's a gift: www.finder.com/ca/taxes-regulations-on-large-money-transfers-to-canada#
Hope this helps!
@@NaomiWilkins Thank you so much, Naomi. Appreciate your attention and the valuable information you provided. 🙏🙂
Do you know how to fill Income on T2125 if one is using the quick method for GST/HST?
I don't have experience with that yet... but, I was able to find the answer on Canada's website! On this link there's a note with the answer. Hope this helps! www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/completing-form-t2125/part-1-business-income.html
@@NaomiWilkins thank you 🙏
omg we have the same name :o
And isn't it a great name! :D
@@NaomiWilkins yea! Its A Rlly Nice Name :D