Add Income

Use this form to add a present or planned source of income. Depending on the income source, you may continue to another form to provide additional information.

Enter employment, self-employment, pension, rental, annuity, inheritance and other income that you receive now or expect to receive in the future.

Do not enter OAS, CPP/QPP retirement benefits or U.S. Social Security here. These are handled separately by the MoneyReady App. CPP/QPP Disability income, however, should be entered here.

Do not enter withdrawals from accounts or investment income such as interest, dividends and capital gains generated by investments. The TIME MACHINE calculates those amounts separately.

Taxable income earned by a dependent should also be entered, with the dependent selected as the income owner.

Select the source that most accurately describes the income. The selection determines how the income is treated for taxes and in the TIME MACHINE.

Before adding rental income, enter the applicable property under REAL ESTATE. Before adding income from a CCPC, enter the CCPC in your PROFILE.

If you are contributing to a defined-benefit pension plan, enter the related salary income before adding the pension. A bridge benefit from a defined-benefit pension should be entered as a separate income.

Enter a unique and recognizable name for the income.

Optional. Use this field for information you may want to remember about the income.

The Owner field is shown when more than one applicable choice is available. Depending on your profile and the income source, the income may belong to you, your spouse, both spouses jointly, a dependent, or another shareholder of your CCPC.

Not every income source can be held jointly or assigned to every owner. The form will warn you if the selected combination is not allowed.

Enter when the income begins and ends. A date may be entered directly or linked to an applicable age or life event.

If the income already existed before the current year, its start may be set to the last day of the previous year. For planned income, enter a future start date.

If the income continues for life, you may leave the end at its long-term default or link it to the appropriate death event.

For a one-time amount, such as an inheritance, use the same start and end date.

Select the currency in which the income is paid. The TIME MACHINE will apply the applicable exchange rates when converting it to Canadian dollars.

Enter the gross annual income before taxes and deductions. Annualize the amount even when it is received for only part of a year. The TIME MACHINE will prorate it between the start and end dates.

For example, if you receive $1,000 per month for three months, enter $12,000 per year and set start and end dates three months apart.

For a one-time income, enter the entire amount and use the same start and end date.

Normally, enter the annual amount in today’s dollars. If the income starts in the future, the TIME MACHINE will increase it to the start date using the inflation settings below.

Alternatively, enter the amount expected at the future start date in the Amount/year in FUTURE currency field. Normally, only one of the two amount fields should be completed.

You can specify how the income changes over time using the inflation checkbox, an inflation adjustment multiplier and an additional yearly adjustment.

If Index to inflation is selected:

Yearly growth = inflation × multiplier + additional adjustment

A multiplier of 1 applies full inflation. A multiplier of 0.5 applies half of inflation. The additional adjustment may be positive, zero or negative.

If the income is not indexed, the additional yearly adjustment becomes its entire yearly growth rate.

The MoneyReady App does not model conditional indexing formulas such as “inflation minus 1% only when inflation exceeds 3%.” Enter a reasonable approximation using the available multiplier and adjustment.

This field is shown only when applicable. Select it if the employment or self-employment income provides benefits that exempt the income owner from paying Quebec prescription drug insurance premiums.

This field is shown for employment and self-employment income. If selected, you will continue to another page where you can enter the dates of each leave and the percentage of income received during it.

Pension, rental, annuity, Other and dependent income require additional information. After saving this form, you will continue to a form specific to the selected income source.

Most income is taxable, but some Other income may not be. For example, spousal support is generally taxable while child support is generally not. Enter amounts with different tax treatments as separate income entries.

If you have a CCPC, additional income sources are available for salary and dividends paid by the corporation.

Enter salary paid by the CCPC to you, your spouse or a dependent who is a shareholder. Salaries paid to employees who are not part of your household should instead be deducted from the corporation’s REVENUES and should not be entered here.

Some corporations, including professional corporations, may restrict salaries paid to shareholders who are not actively working for the corporation. The MoneyReady App does not verify whether a salary or dividend is legally permitted. Confirm the entries with your professional advisors.

Enter dividends paid to you, your spouse, dependents and other shareholders. Payments to other shareholders are required to calculate the corporation’s taxes even though they are not available for your household spending.

This income source instructs the TIME MACHINE to distribute dividends using the available CCPC notional-account balances. It uses the following order:

1. Capital dividends, limited by the CDA balance.
2. Eligible dividends that release the eRDTOH balance.
3. Non-eligible dividends that release the nRDTOH balance.
4. Eligible dividends, limited by the GRIP balance.
5. Additional non-eligible dividends.

If this income is owned jointly and the spouse of the CCPC owner is permitted to receive dividends, the dividends will be divided equally between the spouses.

This option first distributes dividends that use the available notional-account balances and then pays salary to the CCPC owner when the corporation has sufficient revenue. Its order is:

1. Capital dividends, limited by the CDA balance.
2. Eligible dividends that release the eRDTOH balance.
3. Non-eligible dividends that release the nRDTOH balance.
4. Eligible dividends, limited by the GRIP balance.
5. Salary to the CCPC owner.
6. Additional non-eligible dividends if more money is required.

Salary paid to the spouse must be entered as a separate Salary from CCPC income.

This option determines the salary remaining after the preceding dividend distributions. It does not necessarily find the ideal salary for maximizing RRSP room, CPP/QPP benefits, income splitting or the value of the estate. You may instead enter salary separately and use the Optimised Dividends option for the remaining income.

You may enter salary, eligible dividends, non-eligible dividends and capital dividends as separate income entries. Separate entries with different start and end dates can be used to control the timing of payments.

Individual dividend and salary entries cannot be jointly owned. The TIME MACHINE assumes that the shareholders hold the appropriate share classes and limits dividends according to the applicable notional-account balances.

An income from the CCPC will be paid only when the corporation has sufficient funds. The TIME MACHINE first uses corporate REVENUES and then, if necessary, withdrawals from the CCPC investment account.

The TIME MACHINE reports the income received personally and the corresponding payments made by the CCPC. It will display a warning when the corporation cannot make a requested payment.

CCPC salary and dividend rules are complicated. The MoneyReady App follows the instructions you enter but does not verify that the transactions are legally or tax compliant. Confirm your plans with your accountant and other professional advisors.

Click Save and Continue to create the income. Complete any additional form that follows until you return to the list of incomes.