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Filing Taxes Insights

December 29, 2021
Income Splitting

Tax on Income Splitting (TOSI) in Canada – 2020

No one wants to pay more taxes than they have to, that is why many Canadian taxpayers might choose to alleviate some of the tax burdens through a practice called “Income Splitting”. Canada Revenue Agency’s (CRA) definition of Income Splitting Income sprinkling – sometimes referred to as “income splitting” – is a strategy that can be used by high-income owners of private corporations to divert their income to family members with lower personal tax rates. In simple words, income splitting is the transferring of income from a high-income family member to a lower-income family member to minimize the overall tax […]
December 27, 2021

Capital Gain On Sale Of Business Assets

It is important to contact the tax office whenever the owner changes into a single owner, a partner in a partnership, or a member of the company’s board of directors. Depending on the structure of your business, changing the owner will have a different impact on your business. Depending on your partnership agreement and if your business was registered using the official names of each partner or the operating name of a provincially registered partnership, it may change the legal name or require the registration of a new company number (BN ) and the CRA program account. It is important […]
December 27, 2021

Part IV Tax

The purpose of Part IV is to prevent the deferral of dividend income tax from the portfolio through private companies or other closely controlled companies. Since companies are generally allowed to deduct dividend income when calculating their taxable income, Part IV imposes a tax on dividends received from private companies or closely controlled companies in order to remove the incentive for individuals to obtain a significant deferral of dividend income tax. Part IV of the tax is intended to approximate the tax that would be paid by the taxable person with the highest marginal rate if the individual received dividends. […]
December 27, 2021

Why Are Bonuses Taxed So High In Ontario?

The bonus becomes part of your total salary for the year. Let’s say your salary is $ 36,000, and your employer gives you a $ 500 bonus. You must now be taxed as if you were earning $ 36,500. Bonus calculations need to be changed to increase annual income. Labour insurance (EI) is an equal percentage of earnings up to an annual maximum. The Canadian Retirement Plan (CPP) equates to a percentage of earnings in excess of $3,000 up to an annual maximum. The first $3,000 of earnings are not intended for retirement. This exempt amount is spread over all […]
December 25, 2021

SRED: A Complete Guide & How to Claim it? 2022

Introduced in the 1980s, the Scientific Research & Experimental Development (SRED) is a federal tax incentive program administered by the Canada Revenue Agency (CRA), which issues over $6 billion in tax credits annually for qualified research and development work. The government of Canada supports innovation and entrepreneurship through this program. What is SRED in Canada? SRED (or SR&ED) refers to the Canadian Government’s “Scientific Research and Experimental Development” program. It is a generous incentive program that encourages and rewards businesses of all sizes and in all sectors for conducting research and development to create new or improve existing products, processes, […]
December 24, 2021
Home Office Expenses

Home Office Expenses – Comparing Employees and Self-Employed

Due to the pandemic, home office expenses have become the hot topic in taxation. Many people were required to work from home, and others started side gigs to make ends meet. Read on to find out what you can claim as home office expenses if you’re an employee or self-employed. Eligibility to claim Home Office Expenses To claim your working from home expenses you must: be working from home to fulfill your employment duties, not just carrying out minimal tasks, such as occasionally checking emails or taking calls incur additional expenses because of working from home. You can claim a […]
December 15, 2021
corporate owned real estate

Advantages and Drawbacks of Buying Property Under Company Name in Canada

Are you wondering whether you should buy an investment property through a corporation or your personal name? It’s actually more than a single-line answer. It’s a very popular question asked by real estate investors and it’s hard to have one answer to that question without analyzing the client’s circumstance individually. However, there are a few concepts that you should be aware of beforehand if you are considering purchasing a property with a corporation in Canada. What is a Corporate Real Estate? Corporate-owned real estate refers to property owned by a business that may be a form of investment or operational […]
December 13, 2021
tax deductions for doctors

Tax Deductions for Canadian Doctors, Physicians, and Surgeons

Every year, many doctors miss out on important tax savings simply because they did not know what they could claim. Two of the most common mistakes I see many doctors make is either not deducting enough business expenses on their tax returns or deducting too many expenses and thus exposing themselves to the risks of a CRA audit. Let’s talk a bit about what expenses you should claim on your taxes and what expenses you should not claim. The biggest source of deductions for many physicians would be their automobile expenses, as well as membership fees, professional fees, and potentially some overhead costs […]
December 9, 2021

Important Questions a Small Business Owner Should Ask Before Hiring an Accountant

Accountants bring order to one of the trickiest, most stressful parts of your business: finances. With a professional accountant, you can save your company money, stay compliant with governing agencies, and budget for the future. The financial performance of your company is primarily dependent on the informed decision-making of your external accountant. Therefore, you need to hire a reliable & trustworthy accountant.  As a business owner, you will be able to breathe easy knowing that your business’ finances are in skilled hands. However, before you can relax, you have to find the right accounting professional for the job. While some prefer to hire in-house, […]