cash | Financial Crooks

On January 14 I decided to see if my T5s were available yet for my ING Direct (now Tangerine) bank accounts. They were so I printed them out and added them to my ever-growing pile of tax information for my 2013 return. Along the way, I learned how Tangerine.ca handles joint accounts: it’s not the way the CRA wants you to do it. I was also misinformed by Tangerine about how they would report the interest on our joint USD account. And one of my children got a T5 but another one didn’t. No wonder tax time is confusing! Here’s how to get your income tax slips for your Tangerine ~~ING Direct~~ Accounts.

Finding Your Tangerine Income Tax Receipts Including T5 s and RRSP Contribution Slips

Go to tangerine.ca
Click on the tab: I’m a Client, let me in!
Log in to your account.
From the list of links down the left side of the screen, click on My Documents.
Click on Tax Receipts.
In the Choose a Year: field, from the drop-down list select the year you’re interested in. Receipts for the past 7 years will be provided if you have banked with Tangerine for that long. If your 2013 forms are ready, it will be the first choice.
A list of your Tax Receipts will be displayed. Examples of available tax receipts may include under the heading Savings Tax Receipts “T5 – Interest earned”
- my full name as a link.
- my child’s name and my name as a link.
Under the heading RSP – RRSP contributions (First 60 Days)
- my full name as a link
- Spousal – followed by both spouse’s names
Under the heading RRSP contributions (Balance of Year)
- my full name as a link.
- Spousal – followed by both spouse’s names
(Unfortunately, I don’t have any Streetwise Funds so I don’t know how they display the tax forms for people who invest in those in a non-RRSP, non-TFSA account.)
To see a tax form, I click on the appropriate link. For example, I click on Mrs. Bet Crooks to see my T5.
The system will ask if you wish to open the form with Adobe Acrobat or whether you want to save the file.
1. Click to select the radio button beside Open with Adobe Reader.
2. Click on the OK button.
Use the icons on the document to print or save the file. (You may need to use the File, Save command to save the file depending on your version of Adobe Reader.)
When you are finished, close the document.
Click on Log Me Out to leave the ~~ING Direct~~ Tangerine website.
For increased security, clear your browser cache and close your browser session.

What’s on my T5 from Tangerine?

You may have more than one ~~Investment~~ Savings Account at ~~ING Direct~~ Tangerine, especially if you like to save money in separate accounts for vacations, home renos and a new vehicle. ~~ING Direct~~ Tangerine will add up the interest from each of those accounts and include it as a single number on your T5. If you participated in the TFSA Kickstart program, you may have been paid interest into your non-TFSA account (usually your chequing or savings account). This interest may also be included on your T5. You can double check the value if you want by adding up the amounts of interest you earned from each account. To do that, click on

Click on the name of a specific savings account.
Click on the Account Info button
UPDATE 2016 02 13: If you hover your cursor over the question mark symbol after the Current Interest Rate: XX% ? ~~In the box of information at the start of the account,~~ it will state the Interest, Previous Year ($):
Make a note of the amount.
Repeat for each account.
If you participated in the TFSA Kickstart program, you may have to check your Transaction History for your accounts to find where the interest was paid. That amount will not show on the Interest Earned in the Previous Year summary. You’ll have to find it and add it to your notes.
Add up the total and see if it matches your T5.

Mine almost did. It did not include the interest earned by my joint USD savings account.

Why Is There No Slip for my Tangerine US Dollar Account?

ING Direct (Tangerine) did not advise me on the T5 as to which bank accounts’ interest was being reported on the slip. By adding up the information for my various accounts, I discovered they had reported all of the interest I earned on my Canadian dollar accounts, but not the interest I earned on my USD account. I wasn’t sure if they didn’t report the USD interest because

the amount was less than the equivalent of $50 CAD
the account was a joint account, or
the account was in USD and they need me to calculate the amount in CAD-equivalent before reporting it on my taxes

So I phoned Tangerine to ask. I was told that because the account is a joint account, and because my husband is listed as the “primary account holder” that the interest has been included in his tax receipts. I was also told that the amount will have been converted into CAD.

I asked my husband to print his tax receipts so that I could check whether this information is correct.

It’s not.

The USD interest is not reported on his T5 either. I think it may be because

the $$ amount is too small; or
the amount is USD not CAD

Taxpayers can choose how to convert USD earnings, using the actual exchange rate on the day of each payment or using an annual average exchange rate set for this purpose by the Bank of Canada. That may be why it hasn’t been converted and included. (NOTE: Banks must issue a T5 if you make over $50 CAD in interest on an investment. They don’t have to if you make less. You do legally have to report the interest to the CRA, though, if even it’s just 50 cents.)

Declaring Interest from Joint Accounts to the CRA

One thing to remember is that the CRA expects you to report the interest on joint accounts properly. The amount is supposed to be split and reported by each person holding funds in the account “in the ratio that they contributed the funds to the account.” So if my mother and I held a joint account but all of the money in the account came from her, she would have to report 100% of the interest. If I had contributed one-quarter of the money to the account, she would report 75% of the interest and I would report 25%.

Why Is There Only a T5 for One of my Children?

~~ING Direct~~ Tangerine will only issue a T5 if the interest earned by the account is at least $50. So if one of your children earns, say $50.01 in interest and the other earns only $49.99 you will only get a T5 for one of the children. NOTE: Legally in almost all cases because of income attribution you must claim the interest for both children on your taxes filed with the CRA whether you get a T5 or not!

Why am I Being Issued a T5 for My Child’s Bank Interest?

In almost all cases, due to attribution rules, parents must pay taxes on interest earned by children under 18.

My Conclusions

Always check whether you received more interest than was reported on your T5s. Check for

a child’s account earning less than $50
a small account earning less than $50
a US dollar account

Always split the interest earned on a joint account according to the CRA rules, not according to the T5.

Related Reading

Join In
Did you find anything quirky when printing your tax receipts for your ~~ING Direct~~ Tangerine accounts? Please share your experiences with a comment.

My children have some Canada Premium Savings Bonds that were given to them when they were very young. Some of the bonds matured last month, so it’s past time to get the money out. Which left me with the question: how can my kids cash out their Canada Savings Bonds?

Who Pays Tax on the Interest Earned by CSBs, the Giver Or the Child?

I’d better clarify the income tax issues caused by the gift of bonds.

First of all, income tax has to be paid on the interest the bonds earn each year even if the income is not received until the bonds mature.

Second, if your children are given bonds by their

parents
grandparents
aunts
uncles
or other non-arms length relative

even if they do *not* live in the same household
then the person who gave the children the bonds has to pay the income tax each year on the interest earned the previous year.

What If the Child Didn’t Get a T5 for the Interest?

T5’s are issued only when the interest earned is more than $50 for a year.
That does *not* mean no tax is owed if there is no T5!

You can phone the Canada Savings Bond office at any time and ask what the interest earned the previous year was. You will need to know the name of the bond holder and their SIN, or they can help you with the calculation if you know the series number of the bonds and the face values. The CSB office can be reached at 1 800 575 5151.

Who Pays the Tax After the Bonds Have Matured?

If your child is 18 or older, they can start to declare the annual interest on their own income tax form in April. They will have to pay tax on the interest if they have a high income. Most teens don’t and will not have to pay any tax.

After the Bond Matures and Is Cashed Out Who Pays the Tax on Re-investing the Money?

It’s trickier if your child is still under 18 at the time the bond matures.

Any new interest earned by the principal (the face value of the bond) when it is re-invested must be declared on an income tax return by the person who gave the bond to the child.

But interest (or other income) can also be earned on the interest already paid on the bond. Any interest earned on the original interest is, in theory, taxed in the hands of the child. The minor would have to file an income tax report in April and report the interest (or other income). Because the minor likely has no or little other income, the child would not usually have to actually pay tax on that interest (or other income.)

How does one know which interest is which? Well, you’d better keep very careful, very accurate records, because the government can demand to see them. Like all tax records, you’d have to keep the information for about 7 years.

For simplicity, often the original giver or the parent just keeps reporting all of the income until the child turns 18.

I would like to get some clearer information on how this income attribution works before I change how we file our taxes.

How Can My Children Cash Their Canada Savings Bonds? Can The Bank Place a Hold on the Money?

In the meantime, we need to get the matured Premium bonds cashed as they are not earning anything anymore.

Before heading to the bank, I called the Canada Savings Bond office to clarify the rules.

I already knew from their website that if the child is too young to cash the bonds by signing, the parent, with proof of guardianship, can cash them on the child’s behalf. You’d need proof that the child is the person named on the bond and proof of your relationship to the child.

(This is one example of where a “bricks and mortar” bank can be handy: at our bank, they’ve seen our children banking with me for a very long time. The kids even get special treats on some holidays from the tellers. There’s much less suspicion when we try to prove our relationship after they’ve watched the same child for years interrupting and pulling on your sleeve saying “Mummy, mummy, mummy!”)

I phoned, though, to clarify whether the bank is allowed to put a hold on the money after the bond is cashed.

Somewhat to my surprise, yes, they are. Apparently there have been instances where people have reported a bond certificate as lost and cashed it, then found the bond certificate and tried to cash it again. So the bank is within its rights to require you to deposit the money from the matured bond and to place a hold on that money until the bond clears.

A Reminder to Parents to Teach Their Children Cursive

As we head off to the bank, I’d just like to remind parents that despite the new curriculum in many jurisdictions, it’s worth your child learning some cursive. Banks still expect a signature on monetary documents. The sooner your children can learn to make the same scrawl the same way for their name, the easier they will find banking.

At least until they start scanning our retinas.