Canadian tax brackets are portions of Taxpayer’s income in Canada which get taxed at different rates. The following is a breakdown of the Canadian Federal tax rates for 2019: 15% on the first $47,630 of taxable income Income earned between…
The Canada Pension Plan (“CPP”) are government payments representing a replacement of income where disability, retirement, or death are involved. It is also one of the three levels of Canada’s retirement income system. CPP is responsible for paying retirement funds and…
The Canada Pension Plan (CPP) operates throughout Canada, except in Quebec, where the Quebec Pension Plan (QPP) exists, aiming to provide contributors and families with partial replacement of earnings in the case of retirement, disability, or death. With very few…
The Working Income Tax Benefit (“WITB”) is a refundable tax credit intended to provide tax relief for eligible working low-income individuals. Because it is a benefit / credit, taxpayers may be entitled to the Working Income Tax Benefit even if…
While health care in Canada is publicly funded, there are various out-of-pocket medical expenses that taxpayers incur on a daily basis. Examples include over-the-counter medications, eyeglasses, vitamins and other items not covered by provincial or private health insurance. What many…
What is Rental Income? Rental income is any income earned for allowing others the use of a specific space. This includes houses, apartments, individual rooms, office space, or any other real or moveable property. Do You Have to Pay…
A wage garnishment is when a creditor seizes some, or all of your earnings to pay off your amount owing. It is often used by the Canada Revenue Agency (“CRA”) to collect outstanding balances owed to them. Garnishments are not…
The CRA Reassessment Period is the amount of time the Canada Revenue Agency is allowed to adjust a personal, corporate, GST/HST, or payroll return. Each of these returns have different CRA Reassessment Periods, and the Canada Revenue Agency may even…
What is CRA Tax Evasion? The Canada Revenue Agency states that an individual or business engages in tax evasion when they intentionally ignore Canada’s tax laws. More specifically, it is the willful decision to suppress or avoid disclosing income required to…
The Difference Between a CRA Audit, and a CRA Review The Canada Revenue Agency (“CRA”) has two options when looking at reassessing or adjusting tax returns. First, “tax reviews”, which are not formal audits, but rather a process that promotes…
What is a Taxable Benefit? A taxable benefit is a benefit that a taxpayer receives, typically paid for by a corporation, that is more related to personal choices than business expenses. If this is the case, then the taxable benefit…
The Tuition Tax Credit The tuition tax credit (“TTC”) is a non-refundable tax credit that helps Canadian students who are currently attending, or recently finished attending post-secondary education. The cost of post-secondary education represents a financial detriment to many Canadian students and…
A Principal Residence audit occurs when the Canada Revenue Agency audits a taxpayer for the sale of one, or multiple properties where no taxes are paid. No taxes are paid because the taxpayer is claiming the Principal Residence Exemption, which…
It’s no secret that Vancouver is one of Canada’s hottest real estate markets, and that other large urban centres in British Columbia have enjoyed similar popularity in investment patterns. A limited supply of housing, however, has caused issues with accessibility….
The Disability Tax Credit The disability tax credit (DTC) is a non-refundable tax credit that helps Canadians with disabilities pay for their out of pocket expenses. The credit is intended to provide greater tax equity by allowing relief for disability…
What is Director’s Liability? In Canada, corporations are considered to be separate legal entities with their own assets and liabilities. It is a basic principle that employees, officers, and directors are not personally responsible for the debts incurred by their…
Section 160: Paying Other People’s Taxes As explained previously (here), section 160 of the Income Tax Act, and its counterpart, section 325 of the Excise Tax Act, can be used by the Canada Revenue Agency to attach tax liability to…
GST/HST Audits after already being Audited Subject to exceptions, Canadians running businesses are expected to collect and remit GST/HST to the government on most of their sales. Sometimes, though, they may not even know that they were running a business…
The informal procedure at the Tax Court of Canada is similar to the Small Claims Court offered throughout Canada. Essentially, if you are disputing less than $25,000 per tax assessment, you may choose the informal procedure. What is the…
In 2017, the Federal Government announced its intention to make sweeping changes towards small business taxation in Canada. The government initially targeted hallmarks of tax planning strategies for small and medium-sized business owners under the ostensibly stated goal of bringing…
Under the Canada Revenue Agency’s Voluntary Disclosures Program, taxpayers can come forward to disclose past non-compliance, whether that be non-filing, over-claimed expenses, offshore reporting, or any of an almost limitless number of errors and omissions on Canadian taxes. We help Canadians…
Throughout 2017, the Trudeau government’s proposed changes to Canadian business taxation often dominated headlines. However, their gradual rollout and ponderous process resulted in something of a slow burn of coverage, which, however much Canadians discussed it, cannot hold a candle…
On December 13, 2017, the Department of Finance re-released its draft legislation regarding income splitting rules and provided guidance to the revised legislation. The Government’s stated objective for changing the income splitting rules is to limit the ability of owners…
In the recently announced changes to the Income Tax Act, “reasonableness” takes centre stage. Taxpayers running businesses who pay money out to their family members in the form of dividends or salary, can currently “spread” that money around, distributing it to…
In a tax context, an expense or a write-off is another word for a deduction. Canadian corporations are taxed on their profits, that is, the income that they earn less the cost of earning that income. Costs that you legitimately incur…
When Canadians think of taxes, they likely think of strict rules that come out of the Income Tax Act. Parts of the Act, however, do not really work that way, and rather turn on less clearly defined concepts, such as “reasonableness” or…
Do you have unfiled tax returns, or have you incorrectly reported income? If so, you may be eligible for the Voluntary Disclosures Program. The Voluntary Disclosures Program incentivizes taxpayers to correct previous non-compliance by offering relief from penalties, a reduction…
Realtors in Ontario have traditionally been left out in the cold when it comes to taking advantage of the tax benefits of professional corporations. Under the definition section of the Real Estate Brokers Act, real estate brokers and salespersons are required…
The Federal Government has announced that they are looking into making changes to what they perceive as unfair tax advantages provided to individuals who own their own corporations. The changes focus on three major areas: income sprinkling, holding passive investments…
Do you own a corporation? Have you updated your corporate records each year as required by the Business Corporations Act (Ontario)? Have you routinely filed information returns in accordance the Corporations Information Act when you have moved offices or changed directors?…
The Tax Court of Canada is a unique Court in Canada. It only hears tax cases, and there is no fixed location where the judges reside. Rather, Tax Court Justices come to you. When you have already been through the audit,…
You might be like thousands of Canadians who have not filed their taxes for the past few years. Whether it is just missing one year, or missing ten years, the pressure from not filing can make for some serious stress….
On April 20, 2017, a number of measures were announced by the Ontario Government in their attempt to make housing more affordable. Rent Control The Residential Tenancies Act limits the increase of rent on buildings built prior to November 1,…
While there is no legal requirement to have a shareholders agreement under law, any corporation with more than one shareholder is well advised to obtain one to safeguard against these five areas of concern. The reason for this is because of…
Professional Corporations Legislation in Ontario specifically permits certain professionals to practice their profession in a corporate form even though the professional is the sole employee of the professional corporation (PC). The Ontario Business Corporations Act (OBCA) permits a professional to practice…
When a taxpayer decides to start their own business, he or she must consider the type of business structure best suited to their individual needs. The most common forms of business arrangements are either a sole proprietorship, or a corporation….
When the Canada Revenue Agency (“CRA”) audits a taxpayer, there are many different auditing methods or techniques that may be used. One of the most widely used of these methods is the bank deposit analysis, which is normally completed as…
When the Canada Revenue Agency (“CRA”) processes a tax return, they produce a document detailing the results known as a Notice of Assessment. If you modify your filings, or if the CRA makes changes on their own, they will then issue…
There are a number of scammers contacting taxpayers around Canada and scaring them into believing they owe the Canada Revenue Agency (“CRA”) money. This tax scam has been around for years now. These scammers claim that if the amounts owing are not…
Canadians, other than non-residents of Canada for tax purposes, are taxed on their worldwide income. However, Canadians who pay taxes in another jurisdiction, may be able to claim a foreign tax credit so that double taxation does not occur. Section 126…
Replacement Property Rules – Deferring a Capital Gain Normally, if you sell a property at a higher amount than the purchase price, there will capital gains taxes payable. However, sections 44, and 44.1 of the Income Tax Act allow for…
A Registered Retirement Savings Plan (“RRSP”) is a tax deductible way of funding your retirement. Contributions made are deductible from your income, which lowers the overall amount of taxes you are going to pay that year. Withdrawals from the account…
The Lifetime Capital Gains Exemption (LCGE) is an incentive created by subsection 110.6 of the Income Tax Act. It allows taxpayers the opportunity to sell certain qualified shares or property on a tax-free basis. Depending on what is being sold, taxpayers…
A business investment loss is a capital loss from the sale of shares of a small business corporation, or it can be a debt owed to someone by a small business corporation. Capital losses may be deducted against Capital gains except…
If you have an incorporated business you are able to pay yourself in any way you would like. There are various methods of getting money out of your corporation. Some examples include: Salary; Dividends; Loans; Director Fees; Management Fees; and…