Manage cash flow better by projecting future tax liabilities.
Unforeseen circumstances often leave owner-managers short of the cash needed to pay federal and provincial taxes. Unfortunately, many owner-managers consider unpaid tax bills to be the same as unpaid trade credit. They are not. Unpaid taxes can cause a lot of problems. Ensuring funds are available to pay obligations to the Canada Revenue Agency (CRA) should be a top priority for any business, whether incorporated or a sole proprietorship. Continue reading
Owner-managers should discuss Canada Revenue Agency (CRA) changes to employee vehicle allowances with their CPAs before announcing any changes to company policy.
To keep up with the rising costs of operating vehicles, Revenue Canada has increased the maximum tax-exempt car allowance deductible for employees to 55 cents per kilometre for the first 5,000 kilometres, and to 49 cents per kilometre for distances travelled in excess of 5,000 kilometres. Continue reading
Ensure your books are always in order for the CRA.
Owner-managers work hard in their businesses but are often overwhelmed by the reporting requirements for the Canada Revenue Agency. Few owner-managers enjoy the time spent and cost required to meet the CRA requirements, let alone the actual taxes that have to be paid; nevertheless, owner-managers must establish good business habits to ensure they stay on the right side of the tax authorities.
So, here are a few suggestions on how to make your relationship with the CRA much easier for yourself over the long run. Continue reading
The Federal Government released their budget for 2018 on February 27, 2017 and as a result, we have some clarity on a number of outstanding questions from the announcements released in July 2017 and December 2017 regarding Tax on Split Income (“TOSI”) and on passive investments within corporations. Continue reading
Develop a strategy for distributing earnings and reducing corporate income taxes.
For most owner-managers, their goal is to create personal wealth through the operation of a successful business. Unfortunately, corporate and personal tax liabilities (among other things) stand in the way. Continue reading
Operating an automobile for business and personal use has tax consequences.
Purchasing or leasing an automobile in the company name and allowing employees to drive the automobile has tax consequences that may require owner-managers to add a taxable benefit to the employee’s T4. Continue reading
The new Liberal government has proposed a few minor changes to personal income taxes for 2016 and beyond.
The election of a new government in Ottawa is often accompanied by changes to the way income is taxed. The last federal election was no exception. The changes announced in the March 2016 budget that will impact many taxpayers are as follows: Continue reading
Complete, accurate and readable records will make a CRA audit less onerous.
Regardless of whether your business is a proprietorship, a partnership or an incorporated company, the Canada Revenue Agency (CRA) requires the business to maintain financial books and records. Here are a few of the CRA’s record-keeping requirements you should know. Continue reading
Before choosing a date for your year end, think about the date that works best for your kind of business.
When entrepreneurs incorporate their businesses under their respective provincial articles of incorporation, often, little thought is given to the date for the fiscal year end. Many company founders unconsciously identify the company’s fiscal year end with the calendar year end of December 31, and therefore automatically select this date. After the articles of incorporation have been issued, the business may choose any date as year end provided the number of days of the fiscal year do not exceed 371. Conventional wisdom suggests, however, that the last day of the chosen month is the most practical date since most businesses and financial institutions process client data on a month-end basis. Setting the year end date at the end of your chosen month permits an easier cut-off and reconciliation process. Continue reading
The Federal Liberal government made some significant promises during the election. The budget released on March 22, 2016 was their chance to put some of those promises into place.
CPA Canada has provided the following comments on this 2016 Federal Budget: