Skip to content
Join our Newsletter

You can't give the taxman a wedgie

Part 2 of a series If I was ever attacked by a gang, dad said I should challenge the leader of the group to a one-on-one. He might be bigger than me, but he can't chicken out in front of his boys.
MONEYcol-ryan.04_1032018.jpg

Part 2 of a series

If I was ever attacked by a gang, dad said I should challenge the leader of the group to a one-on-one. He might be bigger than me, but he can't chicken out in front of his boys. Next, swiftly punch him in the nose before he has a chance to adjust. His eyes will water up and you will have the advantage momentarily.

At that point, step around him and kick-stomp the side of his leg at the knee with all you've got, either breaking his leg, or severely hobbling him.

Not bad in theory, but I dared not get close enough to allow this big kid any contact, so I faked an up-close rock-throw to his head and sped past him, right into the paper shack. I headed swiftly out the open window but his friends caught me outside and held me for my beating. But just as my assailant was hovering near, along came the Paper Boy himself - my perpetually-angry big brother.

I was a territorial thing. My brother routinely laid beatings on me, but seeing this stranger with murderous intent gave him a new sense of purpose. Without a word, he picked the kid up by the back of his pants and collar and shook him like a sack of fish heads. The boy beckoned toward me, eyes pleading, as if I might step in.

Uh... no.

Big brother put the boy back on his feet, as if to let him go, but instead, placed his free hand on the frightened bully's shoulder, hand pressed firmly while lifting with his other hand, which clutched the back of the boy's crisp white Sears unmentionables.

Lift and press.

This brought on a series of pig-squeals which would have made both Jack and the fair-haired boy squirm. The resulting wedgie was so intrusive that the boy's grandchildren were all later born with a tuft of bleached hair in their brow, and an inclination toward singing tenor.

My brother didn't say a word as he dropped the package to the ground. He just stepped over him and into the paper shack, grabbed his canvas bag of Vancouver Suns with one muscular arm and headed the other way.

The now-humble oppressor writhed in the dirt, in full view of everyone. In the fetal position, he clutched his apparatus, squeaking something unintelligible, while nervously glancing toward my brother to make sure he was really leaving.

The next day, and every day I felt so inclined, I marched onto the soccer field during lunch and played along with the older boys.

Nothing was said, nor needed to be.

You can pick your friends, and you can pick your battles, but you can't give the tax man a wedgie. To keep the peace, for now consider picking which of these year-end tax tips apply to you.

Interest on family loans

If you set up a spousal loan or funded a family trust with a prescribed rate loan, remember to pay the interest owing by Jan. 30, 2019. The borrower may be able to claim a deduction for the interest paid on their tax return. The lender will have an income inclusion on their tax return. The timing of the income deduction and inclusion depends on the year the interest relates to, when the interest is paid, and the method (cash versus accrual) you regularly follow in computing your income.

Declare bonuses

before year-end

If your business is incorporated, consider declaring yourself a bonus before the company year-end, but defer the actual payment up to 180 days after the corporate year-end. If your corporation's year-end is say, Dec. 31, and you declare a bonus on Dec. 31, 2018, the company will get a tax deduction for 2018 and the tax your personal tax on the bonus will be deferred a few months.

Shareholder loans

If your business is incorporated and the corporation loaned you money, ensure that the loan is repaid before the end of the corporation's tax year after the year the loan was granted to avoid having to include the value of the loan as income on your personal tax return.

Purchase assets

for your business

If you intend to purchase depreciable assets for your business (i.e., a computer, furniture, equipment, etc.), consider making this purchase before year-end. If the asset is available for use, this year-end purchase will allow your business to claim depreciation on the asset for tax purposes. Even if the asset is purchased in last fiscal day of the company year, the corporation can write off half of a year's worth of depreciation that same year.

Pay salaries before year-end

If you operate your own business, consider paying reasonable salaries to yourself and family members who work in the business, before year-end. This year-end payment constitutes earned income which increases RRSP contribution room which can be used for the following year(s).

This series contained several strategies, not all of which will apply to your particular financial circumstances. Speak with your qualified tax advisor to determine if any of these strategies are suitable for you.

Mark Ryan is an investment advisor with RBC Dominion Securities Inc. (Member-Canadian Investor Protection Fund), and these are Ryan's views, and not those of RBC Dominion Securities. This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article. Ryan can be reached at mark.ryan@rbc.com.