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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1  
Old 06-12-2014, 09:11 AM
rockscan rockscan is offline
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Default Taxable benefits and cs

I have a question that just came up which may be moot due to FRO but thought Id ask all the same...

Partner had an interview for a position that requires travel for which the company pays expenses (mileage, hotel, food). This goes on his T4 as a taxable benefit yes? So that goes in to line 150. Hes worried how this impacts his cs.

I dont think its an issue for a couple of reasons. First, if he gets the job, the income wont bump up his taxes until 2016 since hes spent half the year on EI. Second, the ex registered with FRO so hes obligated to tell her his new income when he starts, the expected cs amounts via table, and she has to go from there. Taxes dont have any factor now since he has to tell her if his income changes (the lawyer told us this because of law regarding arrears) and they work through the FRO process. Finally, the only way cs can increase (or decrease) from this point forward is via court order or an agreement between parties through FRO. So if its a massive increase because of having his expenses paid, he can argue via the motion.

Anyone else in this situation? We'll probably ask the lawyer about it if we go back in August to get his help calculating university portions. Just thought Id see if anyone else is going through this.
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Old 06-12-2014, 09:33 AM
Cobourg Cobourg is offline
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Partner had an interview for a position that requires travel for which the company pays expenses (mileage, hotel, food). This goes on his T4 as a taxable benefit yes? So that goes in to line 150. Hes worried how this impacts his cs.

I travel for business for my employer and I do not have any of the companies expenses, related to my travel, show up on my T4 as a taxable benefit. I do have a company vehicle that has a corresponding taxable benefit, but that is a completly separate thing.

IMO because your partner is required to travel for work, this is not a "benefit" for him and should not change his taxable income for support purposes.
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Old 06-12-2014, 10:12 AM
rockscan rockscan is offline
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Ok cool! Thats helpful. He has a friend who keeps freaking him out about stuff. I told him to stop listening to his friend! Thanks Coburg!!
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Old 06-12-2014, 11:09 AM
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mcdreamy mcdreamy is offline
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I suspect your partner's friend is correct. Taxable benefits are included for the purposes of calculation of cs, and then adjusted to exclude the expenses actually incurred. As in I believe your partner would receive an allowance of $10g for mileage, but only incurs $8g. Cs would be payable on $2g.

See here, a report prepared by Scharfstein Gibbings Walen Fisher LLP and available on the law library, Saskatchewan site, for a perspective on calculation of cs payments. (When I'm researching for my own purposes, I always try to find discussion paper's prepared by law firms).

http://library.lawsociety.sk.ca/inma...der/ac5594.pdf

Also, past discussion from forum members on determining accurate calculation:

http://www.ottawadivorce.com/forum/f...purposes-3957/
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Old 06-12-2014, 11:12 AM
MS Mom MS Mom is offline
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Quote:
Originally Posted by rockscan View Post
I have a question that just came up which may be moot due to FRO but thought Id ask all the same...

Partner had an interview for a position that requires travel for which the company pays expenses (mileage, hotel, food). This goes on his T4 as a taxable benefit yes? So that goes in to line 150. Hes worried how this impacts his cs.

I dont think its an issue for a couple of reasons. First, if he gets the job, the income wont bump up his taxes until 2016 since hes spent half the year on EI. Second, the ex registered with FRO so hes obligated to tell her his new income when he starts, the expected cs amounts via table, and she has to go from there. Taxes dont have any factor now since he has to tell her if his income changes (the lawyer told us this because of law regarding arrears) and they work through the FRO process. Finally, the only way cs can increase (or decrease) from this point forward is via court order or an agreement between parties through FRO. So if its a massive increase because of having his expenses paid, he can argue via the motion.

Anyone else in this situation? We'll probably ask the lawyer about it if we go back in August to get his help calculating university portions. Just thought Id see if anyone else is going through this.

Reimbursement for expenses is not a taxable benefit that appears on T4 or any line of your income tax return. You don't even have to be an "employee" of the company to receive reimbursement for expenses.

On the T4 - taxable benefits will include personal use of a company vehicle and/or premiums for life insurance paid on behalf of the employee by the company.

The only item that may be considered taxable in what you've outlined is if the employer repays him mileage at a rate higher than CRA guidelines. The excess will be a taxable benefit.
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Old 06-12-2014, 11:29 AM
rockscan rockscan is offline
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Ok thanks. He has already asked about a fleet vehicle with a gas card. His last job did this so he paid nothing. It would only be the accommodations and food to worry about. And at that point, if it is included for some strange reason, i dont think it will be significant enough to require a new support order for fro.
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Old 06-12-2014, 11:34 AM
MS Mom MS Mom is offline
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Quote:
Originally Posted by rockscan View Post
Ok thanks. He has already asked about a fleet vehicle with a gas card. His last job did this so he paid nothing. It would only be the accommodations and food to worry about. And at that point, if it is included for some strange reason, i dont think it will be significant enough to require a new support order for fro.

Hotel expenses are not a taxable benefit. If the company doesn't pay for it outright, and he pays for it, he is reimbursed with an expense cheque. This is NOT taxable income.

He paid for something on behalf of the company, and he is being refunded for it.

No different than if he had to run out to the hardware store because the manufacturing line ran out of bolts. The bolts aren't his expense, it's the company's.
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Old 06-12-2014, 11:43 AM
DowntroddenDad DowntroddenDad is offline
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Quote:
Originally Posted by rockscan View Post
Ok thanks. He has already asked about a fleet vehicle with a gas card. His last job did this so he paid nothing. It would only be the accommodations and food to worry about. And at that point, if it is included for some strange reason, i dont think it will be significant enough to require a new support order for fro.
I've been travelling for work at 3 different companies, including a government agency. Never has any expenses related to work travel been a taxable benefit, even when I had to pay them and get reimbursed.

I am away that car allowances for when you are given an allowance for your personal car instead of a company car there are issues. I've also heard that in some circumstances our "free" parking in a paid underground parking lot may be considered a taxable benefit, but they have yet to implement it.

But direct expenses, food, gas(or mileage), hotel etc., not taxable benefits, do not show up on T4s or NOAs.
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Old 06-12-2014, 12:06 PM
Beachnana Beachnana is offline
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My husband has a travel benefit which pays for him to get to the company plane to go to the work site. It was deemed non taxable so does not show up on the line 150. We were required to get a letter from the employer to state this was a reimbursement of expect costs outlay to travel to work. Never been a problem since.
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Old 06-12-2014, 03:47 PM
Berner_Faith Berner_Faith is offline
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I occur a lot of different expenses for work, be it mileage, hotel costs, office supplies, etc. I am reimbursed for all of these expenses, but I don't make money off them so they really are not a benefit. I am reimbursed by a separate cheque.

I wouldn't worry too much about it, as most expenses are not taxable benefits.
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