Edit Other Income

Use this page to review and edit all the information for an existing Other Income entry.

Other Income is for income that is not described by one of the more specific income sources. It can be treated as non-taxable income, ordinary taxable income, eligible or non-eligible dividends, or capital gains.

If this entry was created by the Quick TIME MACHINE, it may have been entered as Other Income by default. Select its actual income source whenever one of the more specific choices applies.

If you change the income source, click Save. The page will reopen with the fields required for the newly selected income type.

Leave the income source as Other Income only when none of the more specific types apply.

Do not use Other Income to duplicate income already calculated automatically by the MoneyReady App, such as income from your investments, your CCPC, or CPP/QPP and OAS benefits.

Enter a name that will make the income easy to recognize. Each income must have a unique name.

Select the person who receives and reports the income. An Other Income entry may also be Joint, in which case the income and its tax treatment are divided equally between the spouses.

The option for income paid to “Other” people applies only to appropriate dividends paid by your CCPC to shareholders other than you, your spouse or your dependants. It cannot be used as the owner of an Other Income entry.

Select how the income should be treated in the TIME MACHINE:

• Not taxable: The amount is included in cash flow but is not added to taxable income.
• Income: The amount is treated as ordinary taxable income. It is not treated as earned income and does not create RRSP contribution room.
• Eligible Dividends: The amount is treated as eligible dividend income.
• Non-Eligible Dividends: The amount is treated as non-eligible dividend income.
• Capital Gains: The amount is treated as a realized capital gain.

If the income is a salary or dividend paid by your own CCPC, use the appropriate CCPC income source instead. This allows the TIME MACHINE to apply the corresponding corporate calculations.

The start and end of the income can be entered as a date, an age or a LIFE EVENT. The resolved date that will be used is shown below each selection.

If the income began before the current year, you can generally use the last day of the previous year as its start date. The TIME MACHINE will then include it from the beginning of its simulation period.

If the income continues for life, leave the end at its default or select the appropriate death-related LIFE EVENT.

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

Select the currency in which the income amount is entered. The MoneyReady App will convert the income to Canadian dollars when required using its currency assumptions.

Enter the annual amount of the income in the selected currency. Use the annualized amount even when the income is received for only part of a year; the TIME MACHINE will prorate it according to its start and end dates.

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

For an income that starts in the future, you can enter its annual amount in today’s dollars. The MoneyReady App will increase it to the start date using the applicable inflation assumptions.

If you already know the amount that will be received in future dollars, use the OR Amount/year in FUTURE currency field instead. Use one amount field or the other, not both.

Select Index to inflation once started if the income should continue to grow with inflation after it begins.

The inflation adjustment multiplier controls how much of the inflation rate is applied:

• 1 applies the full inflation rate.
• 0.5 applies half of the inflation rate.
• 2 applies twice the inflation rate.

The additional yearly adjustment is added to the inflation-based increase. If the income is not indexed, this adjustment becomes its entire annual rate of change. Enter a negative percentage if the income is expected to decrease each year.

You can enter an optional note of up to 280 characters. The note is for your reference and does not affect the TIME MACHINE calculations.

Your changes will be validated and saved. If you changed the income source, the editor will reopen with any fields required for the new income type.