This year Canada Revenue Agency (CRA) has set the deadline for tax return filing on May 2nd instead of the normal deadline on April 30th. The extension is given because April 30th is a Saturday this year. Many Canadians are now making their final effort to complete their Tax Returns this weekend to avoid penalties. I wonder how many people has to pull all-nighters to get their tax returns filed on time?
One thing interesting with Trading Income is that it was not that well understood by the accounting professionals nor many of the officers working at CRA.
For years, I have seen accountants claiming that I need to pay capital gain tax on my trading profit as oppose to paying income tax. Even more interesting, some claims that I need to pay Sales Tax on every trade I made. I am not joking here – not that many accountants have the proper knowledge about tax treatments for trading professionals.
Here is the scariest claim of all though – some CRA officials think that every trade should be slapped with a sales tax on the face value of the transaction. So, as oppose to putting a tax on the total net gain, which is very wrong already as this means different treatment for profitable trades and losing trades, the tax is to be applied to the face value of a contract. So if you are trading forex and that a trade on a 2 million dollar face value would be subjected to tax on the full 2 million dollars.
I am not sure if anyone would be profitable trading with that kind of tax burdens. Luckily we have not seen CRA attempts to interpret the laws this way. Otherwise all traders can start looking for a new career.
Over the week, I have been working hard to streamline many business processes. The goal is to free up more time so that I can get more things done. This is made possible partly because of technological change, like easier ways to setup auto payments for more types of recur billings. It is also because of companies have recognized the value of helping their clients to self-manage their business activities actually improves productivities for both their clients and these companies.
Fewer chores to take care of means better emotional balance in trading and better mood in doing research and writing. Although it takes time and effort to make it happen, reducing unnecessary repeating tasks is well worth the time and effort.
This post first appeared on Stress-Free Trader (The Lawrence Chan Blog) | Dayt, please read the originial post: here