Tips & Advice

This article is timely, with the end of the year in sight.

A Registered Retirement Income Fund (RRIF) is a retirement income vehicle in Canada, designed to provide a steady income stream to retirees by converting savings from a Registered Retirement Savings Plan (RRSP) into taxable income. Here's how it works:

The Canada Small Business Financing Program (CSBFP) is a federal initiative that helps small businesses obtain financing to start, expand, modernize, or improve their operations. Administered by Innovation, Science and Economic Development Canada (ISED), the program encourages lending institutions to provide loans to small businesses by sharing the risk with the government.

When a Tax-Free Savings Account (TFSA) holder passes away, the handling of the account depends on whether the account has a named successor holder or a designated beneficiary. Here’s a breakdown of the main scenarios:

When advances or loans are made to shareholders this should be recorded in a general ledger account set up for this purpose. If a loan is made for which the interest would be tax deductible for the shareholder, it is important to track this loan separately from other advances or loans.

In Canada, capital gains are taxed when you sell an investment or property for more than its purchase price. However, there are several strategies to reduce or avoid capital gains tax. Here’s how you can manage it:

In Canada, a Personal Services Business (PSB) is a type of business that the Canada Revenue Agency (CRA) designates under certain conditions. The rules governing PSBs are stringent, and the tax treatment of a PSB is less favorable compared to other types of corporations. Here’s an overview of what constitutes a PSB and its implications:

The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are value-added taxes in Canada that most consumers pay on goods and services. To alleviate the financial burden these taxes might place on individuals with lower or modest incomes, the Canadian government provides a refundable tax credit known as the GST/HST credit.

Deciding whether a sole proprietor should incorporate in Canada depends on various factors, including tax considerations, liability protection, business growth plans, and administrative responsibilities. Here are some key points to help make that decision:

An up-to-date business balance sheet is a critical financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists the company's assets, liabilities, and shareholders' equity. Here are several scenarios where having an up-to-date balance sheet is particularly beneficial:

For small businesses in Canada, simplicity and efficiency are key when choosing an accounting procedure.

In Canada, income from selling goods on eBay, or similar platforms such as Kijiji, Etsy, or Amazon, can be taxable, depending on the nature and frequency of the sales. Here are the key factors to consider:

Tax instalments are payments you make throughout the year to cover the taxes you normally pay in one lump sum on April 30th of the following year. You pay these instalments during the year while you are earning the income, similar to how an employer deducts tax directly from each pay period.

The Canada Revenue Agency (CRA) allows businesses to deduct certain entertainment expenses from their taxable income. However, there are specific rules and limitations on what can be deducted. Here is an overview:

Certified Professional Bookkeepers (CPB), bookkeepers in general, and accountants may overlap in their tasks, yet they possess distinct skill sets. Here's what you need to know:

Are There Tax Benefits for Couples in Canada?

Curious about the tax advantages that come with getting married or living in a common law relationship? In Canada, there are indeed significant tax perks for couples. The following will begin to outline them.

Are There Tax Benefits for Couples in Canada?

Curious about the tax advantages that come with getting married or living in a common law relationship? In Canada, there are indeed significant tax perks for couples. The following will begin to outline them.

Filing your personal Canadian income tax return can also help you qualify for various government benefits. Here are some examples:

here are five more benefits of filing your personal Canadian income tax return:

Filing your personal Canadian income tax return offers several benefits, including:

The deadline for filing 2023 tax returns and payments is Tuesday, April 30, 2024. Typically, personal income tax returns, excluding those with self-employment income, are due by April 30th, along with any outstanding payments. Late filings or payments may incur penalties and interest charges.

What documentation should you include with your return and which records should you maintain? If filing electronically, retain all receipts and documents as the CRA may request them later. For paper filings, the information provided will specify necessary attachments like certificates, forms, schedules, or receipts. It's advisable to retain all receipts and documents for at least six years post-filing to accommodate potential CRA reviews.

The choice between a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP) depends on various factors, including your financial goals, current income, and retirement plans. Here are some key considerations for both:

How to maximize tax refunds as a student in Canada

Maximizing your tax refunds as a student in Canada involves understanding the tax credits and deductions available to you and ensuring you claim them correctly on your tax return. Here are some tips to help you maximize your tax refunds:

We have compiled a list of Tax Changes and adjustments that are anticipated to affect most Canadians in 2024.

The details here offer estimates for elevated payroll taxes, mandatory contributions to the Canada Pension Plan and Employment Insurance. It also covers increases in carbon taxes plus the effect of the possible Digital Services Tax.

As tax laws and regulations change, it's crucial to consult with a tax professional or check the latest resources for the most up-to-date information.

Here are some common steps individuals may take at the end of the tax year:

During the holiday season, scammers often take advantage of the festive atmosphere and people's increased online activities. Christmas scams can take various forms, but some common tactics include:

Avoiding online scams in Canada (or anywhere else) involves being vigilant, informed, and taking proactive measures to protect your personal and financial information. Here are some tips to help you avoid online scams:

Effective record-keeping is crucial for the success of any small business. Proper records not only help you track your financial performance but also ensure compliance with tax regulations and provide valuable insights for making informed business decisions. Here are some best practices for record-keeping in a small business:

Minimizing taxes for a deceased taxpayer's estate in Canada involves careful planning and following specific strategies. The goal is to reduce the tax liability of the estate and maximize the assets passed on to beneficiaries. Here are some steps to consider:

In Canada, gifting a capital property is considered a disposition for tax purposes. When you gift a capital property to someone, it is treated as if you have sold the property at its fair market value (FMV) at the time of the gift. This means that you may be subject to capital gains tax on any accrued gains in the property's value up to the date of the gift, even though you didn't receive any cash in return.

In Canada, gifts from an employer can be considered taxable benefits in certain circumstances. The taxation of employer-provided gifts depends on several factors, including the nature and value of the gift, the frequency of such gifts, and the specific rules set by the Canada Revenue Agency (CRA).

In Canada, gifts and inheritances are generally not taxable to the recipient. However, there are some important nuances and exceptions to consider:

As we spoke about in our last post, as your bookkeeper, we handle the day-to-day financial transactions and record-keeping. Your accountant takes a more analytical and strategic role in interpreting the data, providing financial advice, and ensuring compliance with financial regulations.

We play a distinct, yet interconnected role with your accountant in managing your company's financial affairs. Here's how we typically collaborate to ensure your financial records are accurate, compliant, and optimized.

Bookkeepers also play an important role in helping companies manage their financial records, ensuring accurate and up-to-date financial information, and providing valuable insights that can drive strategic decision-making when combined with your accountant. Some of the ways bookkeepers contribute are:

For low-income individuals in Canada, claiming the Disability Tax Credit (DTC) can provide additional financial benefits through refundable tax credits and other programs. Here are some key points to consider:

If you believe that you were eligible for the Disability Tax Credit (DTC) in previous years but did not claim it, you may be able to make a retroactive claim. Retroactive claims allow you to request adjustments to previous tax returns and potentially receive refunds for the missed credits.

As Canadians advance in age, we are pleased to offer a 3 part series on the Disability Tax Credit (DTC) in Canada.

To claim the Disability Tax Credit (DTC) in Canada, you must meet the eligibility criteria and complete the necessary steps. Here's a general overview of the process:

When considering a fuel-efficient vehicle such as a hybrid, or an alternative fuel model you should know that the Canadian Government, as well as some provinces, provide rebates. 

Once tax season is over, tax preparers, bookkeepers, and accountants head to beach resorts for 6 months of relaxation and resting on their laurels... Well, OK, not really, but here are some common things they do undertake:

First Home Savings Accounts, or FHSAs combine the concept of Tax-Free Savings Accounts and Registered Retirement Savings Plans. For people aged 18 and older, like an RRSP, contributors receive a tax deduction on contributions and TFSA-like tax-free withdrawals when using the savings to buy a home. Further, any investment gains earned in the account are tax-sheltered.

As the 2022 tax year is behind us, it is a good idea to start early and plan for 2023. Here are some suggestions on how you can save money on your Canadian income tax for this year:

The CRA will not send text messages, or instant messages (Facebook Messenger, WhatsApp) to start a conversation with you under any circumstances.  

If you receive a text or instant message purporting to be from the CRA, prompting you to click on a link or requesting information, you can safely delete it.  

The Canada Revenue Agency (CRA) might email you:

• to let you know that a new message is available on your CRA website account.
• to send you a link for a webpage, form, or publication that you requested during a call or meeting with a CRA representative.  
• to let you know about tax credits and benefits for individuals or online services such as My account.

Numbers from the Canadian Anti-Fraud Centre show that direct calls remain the number one means of solicitation for fraudsters.

Although the CRA may contact you via phone to review your income tax and benefit return, it's important to note that legitimate government employees will always identify themselves with their name, employee number, and phone number.

It’s tax time again. If you are like others, you may feel overwhelmed by the process. Sadly, scammers are aware of this and take advantage of people's fears by trying to steal money and gain unauthorized access to personal data and financial details. The Canada Revenue Agency has seen a dramatic increase in the sophistication of scam attempts, so it is essential that you learn the difference between legitimate communication and a scam from the CRA. The best way to protect yourself from potential fraud is by learning the signs.  

When preparing your taxes, a deduction that is often overlooked is carrying charges and interest expenses. These charges are costs you incur to earn income from an investment, but only expenses for non-registered accounts will qualify.

Cash is king is a common expression in business. Surprisingly though, few owners or managers take the steps needed to manage their cash flow. By ignoring it, they will sometimes find an empty bank account and nothing to pay their bills with.

Controlling your cash flow helps prepare you for slow periods and plan for needed financing. Peace of mind is also a by-product of proper planning.

Shareholder loans refer to loans made by shareholders of a corporation to the corporation. The tax implications of such loans will vary depending on the jurisdiction, but usually, they are not considered taxable income to the shareholder.

Through proper planning, simplifying the process of filing your tax returns for 2022 is easily done. By taking the time to prepare your records, you can speed up the process of receiving a refund and reduce the cost of services provided by your accountant or tax preparer to meet the tax filing deadline.  

Reducing the fees associated with the work your accountant does is possible! The great news is that savings are often quite easy to achieve for many owners. If you were only to do one thing, it would be to ensure your records are complete and organized. There are other ways to save as well.

Paying yourself as a small business owner is an important decision. Determining how you do it will be very important concerning finances and taxes.

When thinking about finances, this time of year is one of the most important. People are out in stores or shopping online, and generally, businesses hire more staff. Christmas parties will happen, with presents usually given. In spite of all the hustle and bustle, wise people will consult their accountant so that they're prepared. Here are a couple of quick tips for the holidays.

Guest post by Amos Faulkner

According to financial experts, only about one-third of Americans have a written financial plan. One of the most commonly cited reasons for failing to plan is that it is too complicated. Using a personal finance app can help uncomplicate the process of financial planning.

Mission statements are not just for large corporations. As an owner of a small business, you can benefit from going through the exercise of writing your mission statement. It can not only re-connect you with your “why,” it can also communicate an important part of your business to all of your stakeholders.  

Would you call yourself a procrastinator?  If so, you’re not alone, and with our to-do-lists growing daily, the percentage of people who procrastinate chronically has increased over the last few decades.  

It’s the little things that add up to make an exceptional experience for your customers. Here are five “little things” you can add to your services to create an exponentially memorable connection with your customers. 

Winston Churchill once said: “We make a living by what we get, but we make a life by what we give.”  Canadians have a long history of charitable giving, with well over 90% of adults and youth making donations each year.

The Canadian government recognizes and appreciates our culture of giving, and is committed to promoting the giving spirit.  Hence Canada has tax incentives for charitable donations, which have been described as among the most generous incentives in the world.

With February here already, we are now well into the annual RRSP season. This year, Canadians will have until March 3 to contribute to an RRSP and still qualify for a tax deduction in the 2013 tax year.

What is an RRSP?

Many people assume that if they fail to include an information slip with their income tax return, the Canada Revenue Agency ("CRA") will simply adjust the return to report the income and adjust the income tax accordingly.This is half correct!The other half of the equation is a little known penalty the CRA imposes for repeated failure to report income. This penalty arises when an income slip is not added in your tax return two times in a three year period.

Several years ago form T 1135 was added to our tax returns for individuals, corporations, partnerships and trusts. It is a simple form that has been often overlooked and non-compliance has been high. More than likely this has been because the form does not enter into the calculation of income tax payable.