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A Canadian payroll dependency chart

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Re: A Canadian payroll dependency chart

#271

Post by cmrdporcupine »

betaby wrote: post #265
cmrdporcupine wrote: post #187

Earlier quoted context omitted.

Honestly, I've always found CRA friendly, competent, and responsive. But, I also don't run a small business, and am just a tax payer. Though when I had a small consultancy and corporation they were also actually fine to deal with.

Do you have kids? If so, did you try to deduct extracurricular activities? I did and was audited, also 100% of my friends were audited for the kids related deductions. Anecdata of course. Also I find Canadian personal taxes are way too complicated. I can think only of Italy where allegedly personal taxes even more complex.

I used to do those deductions for my kids, yep. Never had a problem.

I seem to recall from the last 4 or 5 filings that those deductions are gone now. The only thing I had to do each year was figure out the capital gains on my RSUs (in USD, so a bit fiddly). And now this year I have nothing like that, so it's just "here's my RRSP contributions, and yes, those T4s look like mine, confirmed, ok bye"

Re: A Canadian payroll dependency chart

#272

Post by amarshall »

quink wrote: post #260
TimPC wrote: post #213

Earlier quoted context omitted.

AMT is also completely insane when it interacts with legitimate deductions and deferrals that aren't loopholes. For instance stock options from start-ups for stock that can't yet be sold.

Ah, yes, what a horrible, awful burden the... consults notes... top 0.4% of taxpayers in the richest country on the planet are being asked to live with. I'll go find a tiny violin so I may weep for them. Edit: Hang on. I was wrong, I apologise. It would be a subset of those 0.4%. Now I'll have to find an even tinier violin. Edit 2: Investopedia says "The AMT is charged when you exercise your ISOs, hold on to your sha…

Investopedia is misleading. AMT applies unless they were exercised and sold within the same tax year. AMT thus applies to the vast majority of pre-IPO ISO exercises. Many of those people are not in the top 0.4% incomes (I assume that’s what you meant). Further, this specific AMT scenario is taxing unrealizable gains, since the asset is effectively unsellable.

Re: A Canadian payroll dependency chart

#273

Post by amarshall »

phpisthebest wrote: post #231
narrator wrote: post #18

Being someone who has some experience with tax law, the cycle of tax complexity goes like this: 1. Tax law is passed. 2. Really smart CPAs and Tax Lawyers figure out ways to legally avoid paying taxes. 3. Tax people issue regulations intended to close those loopholes. 4. Administrations change and they want to win votes and tweak the economy so they lower some taxes and add tax breaks. 5. New administration comes in…

I have a problem with calling explicit exemptions, call outs, and other things as "loop holes" as if they were no intended to be used to avoid taxation. This is simply incorrect, organizations, people, and groups all lobby the government to include their pet line item as an exemption, deduction, or credit. These are not "loop holes" and a CPA or tax lawyer having the knowledge to fully utilize all of them is not " le…

Loopholes exploit ambiguity or complexity in rules in ways that betray the authors’ intent. Following this definition, there’s no need to conclude that “100% of all income belongs to the government”.

Re: A Canadian payroll dependency chart

#274

Post by ohthehugemanate »

ibejoeb wrote: post #224
akira2501 wrote: post #223

Earlier quoted context omitted.

> It's a shame that we don't have open formulas in code form published by the government. I completely disagree. Then you're just handing them a mechanism to make this as complicated as they possibly can. Taxes should be simple enough to be fully understood by the people paying them. I'm not some algorithmic tool for the government to abuse when it's failed to balance it's budgets and I should not _need_ software to…

I don't understand what you mean. You're beholden to the law regardless of whether you understand it. The government ought to be required to create a reference implementation if for no purpose other than to prove that it is indeed possible to implement.

You are speaking about different objectives. Quite apart from the basic "(how) does it work logically" which published formulas address, simplicity can be an objective in itself.

For example, Germany has one of the most complex income tax codes in the world, with an average compliance burden of 136 hours[1]. That's a hit to national competitiveness and GDP, and worth addressing in its own right.

[1] https://taxfoundation.org/blog/germany-tax-g7/

Re: A Canadian payroll dependency chart

#275

Post by amomchilov »

mmastrac wrote: post #4

It's a shame that we don't have open formulas in code form published by the government. The only way that I know how to do this reliably is using the web form provided by the CRA here: https://www.canada.ca/en/revenue-agency/services/e-services/... As you can imagine, doing this by hand is quite painful and error-prone.

The French invented their own DSL for their taxes: https://github.com/MLanguage/mlang

Re: A Canadian payroll dependency chart

#276

Post by swalberg »

I used to run a small payroll company in Canada, everything was done in Rails.

Call it brute force but every time the rules updated I'd run scraper against the CRA calculator that would calculate payroll across a variety of provinces and pay ranges and output it as rspec. Then i could test that i was compliant and hadn't missed a rule or typoed a value.

Re: A Canadian payroll dependency chart

#277

Post by zo1 »

guhidalg wrote: post #173
j45 wrote: post #140

Earlier quoted context omitted.

Canadian mortgages are a bit different than the US. First, they renew their interest rates every 5 years over a 20-30-40 mortgage. Think of it as mandatory refinancing. Unlike the US where a homeowner can lock in a low interest rate for a very long time.

That sounds terrifying. Do people just pay them off within quickly if interest rates rise?

A lot of mortgages here in South Africa do this every three months. We have ce tral bank interest rates which are relatively stable (except recently), and mortgages are given out as a function of that rate (e.g. rate + 2.4%). After the central bank rate changes, at the next three month period they use the new rate to adjust your mortgage payments.

Re: A Canadian payroll dependency chart

#278

Post by nayuki »

betaby wrote: post #265
cmrdporcupine wrote: post #187

Earlier quoted context omitted.

Honestly, I've always found CRA friendly, competent, and responsive. But, I also don't run a small business, and am just a tax payer. Though when I had a small consultancy and corporation they were also actually fine to deal with.

Do you have kids? If so, did you try to deduct extracurricular activities? I did and was audited, also 100% of my friends were audited for the kids related deductions. Anecdata of course. Also I find Canadian personal taxes are way too complicated. I can think only of Italy where allegedly personal taxes even more complex.

You're throwing around the word "audit" far too casually. In all likeliness, you and your friends were not audited. The CRA probably asked you to submit supporting documents such as receipts and other written records to prove your claim, as you are legally required to do.

An audit is much more severe and generally involves an in-person interaction and seriously combing through all your accounts and transactions. https://www.canada.ca/en/revenue-agency/services/forms-publi... , https://www.bnnbloomberg.ca/what-s-the-difference-between-a-...

Re: A Canadian payroll dependency chart

#279

Post by nayuki »

cmrdporcupine wrote: post #52
choeger wrote: post #16

This demonstrates how any algorithm, software or not, works: Start with something desirable or necessary and add complications until you end up with a mess that can be used to yield arbitrary results, drive outsiders into madness, and summon some lesser demons if read in a chanting manner. Now what could be done about this? The obvious answer is refactoring. That's what politicians promise in election campaigns and j…

In actuality the CRA and recent federal gov'ts have done a lot to simplify taxes in Canada. It's way simpler these days. Though obviously this payroll stuff is an exception. 10-15 years ago there were piles of special exemptions carved out for all sorts of things (mostly to buy votes.) These days, if you don't have self-employment or foreign investments, etc and are just the typical paycheque-receiving wage slave, fi…

> In actuality the CRA and recent federal gov'ts have done a lot to simplify taxes in Canada.

Sorry, as much as I want to believe this, I have loads of evidence against it:

* I have PDFs of all my annual personal income tax returns. Looking at one year to the next, each year tends to add a couple of line items (as designed in the CRA form - not talking about my personal line items), and each year has a chance of adding a page or two to the overall return package.

* Line numbers got two extra zeros appended in tax year 2019. e.g. Line 121 became Line 12100.

* Ontario has had a surtax for decades instead of rolling it into the marginal rates.

* TFSA was introduced in 2009. FHSA was introduced in 2023. Need I say more?

* The Working Income Tax Benefit, introduced in 2007, now named the Canada Workers Benefit, acts like a pseudo basic personal amount. It would be better to meld this into the marginal tax rates.

* The CPP introduced an "enhancement" in 2019 as an extra line item instead of rolling it into the existing rate table. This is a disingenuous way to present a new tax, and a way to obfuscate it.

* Canada Training Credit, introduced in 2019, adds a page to the tax return.

* Ontario health premium, introduced in 2004, adds just over half a page, instead of rolling it into the marginal rates.

In light of all this, all I can see in the tax code is an ever-expanding morass of complexity that is an enormous time and brain drain on law-abiding taxpayers.

Re: A Canadian payroll dependency chart

#280

Post by nayuki »

Joel_Mckay wrote: post #236

Doing your own taxes is like doing your own dental work. You will never be able to keep up with the legal, bureaucratic, and financial changes. Whatever a local competent accounting firm charges, they will almost always recover their cost in a commercial return. If you have under 12 employees, than ADP payroll can work in some situation.

Taxes are a social construct; teeth aren't. Some taxes are simple enough that a grade schooler can do it. For example, very few people would find difficulty in applying Ontario's 13% Harmonized Sales Tax to general retail purchases. Why shouldn't we aim to have an accessible and equitable tax system that doesn't require dedicated experts ("priests") to interpret?
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