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Filing Taxes Insights

August 26, 2021

How To Calculate Modified Internal Rate Of Return (MIRR)

The five key features will help to calculate the modified internal rate of return (MIRR). Overview Key Definition Formula Example Advantages and Limitations OVERVIEW The Internal Rate of Return (IRR) has a conventional method that assumes cash flows arising from a project to be reinvested in the same project. It discounts future cash inflows to net present value. The NPV of total cash is zero when a breakeven sets against the WACC. However, it is risky to invest cash flows in the same project, so IRR has two different calculations for costs of interest rate. PROBLEMS WITH IRR APPROACH IRR […]
August 21, 2021

CHANGE IN USE OF PROPERTY

In 2016, the Canada Revenue Agency (CRA) changed its administrative policy relating to reporting the principal residence exemption. This has made reporting on the disposition or “deemed disposition” of a principal residence more important in recent years. Where a taxpayer owns real property and converts it entirely from personal to income-producing (e.g., rental) purpose or vice versa, the taxpayer is deemed to have disposed of the property at the time of conversion at its fair market value and reacquired it for the same amount.  The concept of a deemed disposition is one we have found is not well understood by […]
August 20, 2021

Three Types of Accounting and Their Importance for Your Business

People often consider accounting and finance to be the same thing. However, both are quite distinct from each other. These have not only different meanings but also different purposes. For instance, accounting relates to the methods of how a business acquires its money and how much it spends to facilitate various expenditures. Finance, on the other hand, entails the procedures of the business as to how it generates the finances and makes business decisions to establish a going concern which means long-term survival and growth of the business. Nonetheless, both accounting and finance are interdependent. Neither finance nor accounting can […]
August 19, 2021

How and Why to Politely Decline the “May We Contact Your Employer” Question

“But you already have everything that you will need….” “It will violate my privacy.” “This is not needed….” These are all the wrong ways to declining this question. It will not serve the purpose and may also lead to other questions. Finding a new job while you’re up to date makes the entire job search process a little more convenient if your current job doesn’t capture your up-to-date resume and try to jump on the boat. After all, you may not find a better job, and you may be spending another happy decade in your current company. If you are […]
August 7, 2021
income tax in canada

How much Income tax will I pay on 55000?

A tax deduction is a deduction that reduces a person’s or organization’s tax burden by reducing their taxable income. Deductions are usually the expenses incurred by a taxpayer during the year that can be claimed or deducted from gross income to find out the amount of tax due. Salary $55,000 Federal tax deduction – $5,768 Provincial tax deduction – $3,046 CPP deduction – $2,807 EI deduction – $869 Total tax – $12,490 Net pay $42,510 Deductions – $24,688 Marginal tax rate 34.3% Average tax rate 22.7% If you earn $ 55,000 a year living in Ontario, Canada, you will be […]
August 3, 2021

How to Save Taxes for the Self Employed in Canada?

Running a business is a hard mountain to climb, and naturally, you want to keep as much of what you make as possible. If you’re self-employed, you already know how stressful tax preparation and tax filing can be – keeping track of receipts, staying up to date on the Canada Revenue Agency’s tax policies, and navigating tax season. So here are some tried-and-true tax tips to help you stay on track throughout the year, maximize your deductions and lower your overall tax bill. 1. Deduct business-use-of-home expenses Anyone who is self-employed and uses their home as their place of business […]
August 1, 2021

8 Best Write-Offs for Small Business in Canada

Generally, all businesses in Canada are allowed to deduct expenses from their income, that are incurred not only to make the business operational but also to sustain that business once it is up and running. The CRA has a list of the common business expenses that you can write off. The prerequisite for any write-off is that it must be incurred to earn the business income and must be reasonable under the circumstances.  There is a lot that you can claim. It’s about portion and being reasonable. This article covers the 8 best write-offs for small businesses in Canadian Tax Law. […]
July 31, 2021

How to Become an Independent Contractor and Not an Employee?

Your tax status marks a strong impact on your Canadian Income Tax. The motivation for you to be an independent contractor and not an employee is that the independent contractors have far more write-offs and pay a far lower tax rate than employees. This allows them to retain more after-tax cash in their hands. The CRA uses specific criteria to determine your tax status as an employee or independent contractor. You can take steps to protect your status as an independent contractor if you understand them and how to implement them. So, how can you do it? Well! it all depends upon the contract between you and your customer or quote-unquote employer. The agreement must include specific clauses, so it passes the CRA’s test […]
July 31, 2021
How to Save Corporate Taxes in Canada

How to Save Corporate Taxes in Canada?

There are so many legitimate ways that you can use to save your company’s taxes. Canadian corporations have two ways to minimize the amount of income tax they have to pay; do prescribed things that earn them tax credits or take advantage of income tax deductions. This guide offers some of the top strategies to minimize your tax burden and maximize your business income. 1. Pay yourself dividends instead of salary When you pay yourself in dividends, you get paid as a shareholder (or an owner) of the corporation. Unlike a salary, which counts as personal income, dividends are considered investment income. Dividends […]
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