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Tax Tips by Accountant at Brampton

  • Deduction of land improvement costs (e.g., tile drainage) may be partially or completely deferred to a subsequent taxation year by Tax Accountant in Brampton.
  • If you are a farmer using the cash method of accounting, note that when an expense is paid using a credit card, the tax deduction is available when the expense is charged to the credit card, not when the credit card is paid.
  • A child beneficiary of a trust who has never farmed could still possess qualified farm property, provided a relative—i.e. parent, grandparent or great-grandparent—satisfied the gross revenue test in previous generations when they owned and operated the farm on a regular, continuous basis according to TAX ACCOUNTANT at Brampton.
Tax Accountant Brampton

Tax Accountant Brampton

  • A NISA participant can use the accrual method of accounting and the cash method for tax purposes in order to more properly align the crop year with the calendar year or filing period.
  • Within the NISA program, enhanced matchable deposits are available through the Self-Directed Risk Management (SDRM) program. To qualify, crop insurance must not be available to the producer, or else the producer must have declined to purchase crop insurance. Under SDRM, the  producer can add an additional six per cent of ENS to his contributions, which will, in turn, be matched by federal and provincial funds.
  • Because CRA considers crop advances to be loans, in a better than average year, consider storing all or part of the crop and then taking an advance against it. This advance, which must be applied for early in the year, serves as an effective planning technique for farmers using the cash basis of accounting in Peel Region.
  • A financial management counseling program, named the Farm Consultation Service, is available for Canadian farmers who are experiencing agriculture-related financial problems. For a nominal fee, farmers can receive confidential counseling services to deal with problems  such as decreased margins or cash flow difficulties.
  • Farmers in drought-stricken regions of Canada, which  have been particularly prevalent over the past couple of summers in various venues, may also qualify for income tax relief. Consult Agriculture and Agri-Food Canada for details.
  • If your spouse or common-law partner does not pay enough tax to use their dividend tax credit, consider transferring their taxable Canadian dividends to your income. To be eligible, this transfer must increase the spousal credit. The dividend tax credit should have a greater impact in reducing tax payable the lower your taxable income by Tax Accountant Brampton.
  • The proceeds of disposition from capital property have sometimes been ruled by the courts to be income rather than capital gains if there is strong evidence that the nature of such transactions was purely speculative, i.e., the property was purchased with the short-term intent to sell according to Tax Accountant Brampton.
  • Consider transferring non-active assets to a separate company to maintain qualified SBC status.
  • If you transfer a qualified SBC share into a self-directed RRSP, the amount of time such shares are held inside the RRSP count towards the 24-month holding period restriction.
  • A principal residence can include a house, apartment, condominium, duplex unit, cottage, mobile home trailer or houseboat by Accountant at Brampton.
  • In some instances, certain individuals who are involved in the business of selling homes may be denied the principal residence exemption if the CRA deems that resale was a motive in the acquisition of a particular property in Brampton.
  • For information please call your Tax Accountant in Brampton at 905-794-8283.


TAX CHECKLIST BY TAX ACCOUNTANT IN WOODBRIDGE

Taxes Accountant Woodbridge

 

GENERAL ITEMS
A copy of last year’s return, including spouse’s return if not being processed together
Contact details if changed
2011 Notice of Assessment
Other years’ reassessments
Details of changes to your personal status such as dates of marriage, separation, divorce or widowed, births and deaths
Names of spouse & dependents
Note consenting to provide your income tax information to Elections Canada
Installment payments
Details of foreign property holdings (if any) including cost of property held
Contact details of financial planner & financial institution(s)

INCOME
Universal child care benefit (RC62)
Employment income (T4)
Pension income (T4A, T4A(P), T4RIF, T4RSP)
US social security
Old age security (T4OAS)
Investment income (T5)
Income from trusts such as mutual fund investments (T3)
Income from employment insurance (T4E)
Income from partnerships (T5013)
Workers compensation/social assistance payments (T5007)
Details of the sale of securities such as stocks and bonds (eg. trading summary from your broker)
Details of real estate sales
Income from foreign investments
Spousal support payments received

DEDUCTIONS – GENERAL
RRSP contributions
Medical, dental, prescription drugs, nursing home expenses
Payments to a private health insurance plan
Charitable donations
Tuition fees/education amount (T2202A) for yourself or transferred from a dependent such as a child or grandchild
Interest paid on student loans
Professional dues, union dues
Public transit passes
Children’s participation in programs related to physical activity and arts
Interest on loans assumed to purchase investments
Safety deposit box fees
Professional consultant fees
Legal fees paid to establish child or spousal support or to enforce a pre-existing agreement
Legal fees paid to recover wages from your employer
Details of people you support and their medical status
Child care receipts (for camp, list dates attended)
Moving expenses if you moved 40km or closer to work or school
Property taxes or residential rent paid and to whom
Political contributions receipts
Disability tax credit claim form completed by authorized health practitioner (T2201)
Spousal support payments paid
Adoption expenses

DEDUCTIONS – EMPLOYEES
Declaration of conditions of employment form (T2200)
Details of expenses not reimbursed by your employer including travel expenses (eg. parking, taxis, bus fare), supplies and salaries of assistants
Office rent if required as a condition of employment
Home office expenses if it is your principal workplace or used exclusively, on a regular or continuous basis for activities such as business-related meetings; include details of rent paid, repairs and maintenance costs, utilities and if you are a commissioned salesperson also property taxes and home insurance. Also indicate the total area of your home and the area used for your workspace.
If you are a commissioned sales-person, details supporting advertising expenses, promotion, meals and entertainment
Motor vehicle expenses

DEDUCTIONS – MOTOR VEHICLES
Total kilometers driven and kilometers driven just for work
Details of total expenses incurred for gas, maintenance and repairs, insurance, license and registration, loan interest and lease payments
New vehicle, purchase invoice/agreement

UNINCORPORATED BUSINESSES
Total sales revenue for the year
Total expenses listed by category for the year
Capital assets acquired (eg. computers and peripherals, furniture and equipment)
Home office expenses – include details of rent paid or if you own your home, details of repairs and maintenance, utilities, property taxes, insurance, mortgage interest
Motor vehicle expenses

RENTAL PROPERTIES
Address and number of units
Rental income by unit
Rental expenses by unit and by category of expense
Motor vehicle expenses
Partners’names, addresses and SINs
Legal fees


Tax Tips by Accountant at Vaughan

  • A severance amount paid to a spouse or common-law
    partner as a result of working in a family business such as farming may qualify as a retiring allowance regardless of past remuneration, provided  an employer/employee relationship existed over that period and the proposed retiring allowance is considered reasonable by the CRA.
  • Consider introducing family members as shareholders so they may participate in dividend income and possibly directors’ fees,
    even if no direct involvement in operations was present to justify
    salaries by Accountant in Vaughan.

    Accountant Woodbridge

    Accountant Vaughan

  • In determining whether a corporation qualifies as a
    CCPC, it is important to ascertain not just the current share ownership, but also with whom the right of control resides. If, for instance, a foreign-based minority owner has the right to either acquire shares or dilute ownership such that the company is no longer
    majority owned by Canadian parties, it could be denied status as a CCPC.
  • A corporation must file a return within three years
    after the end of its taxation year to be eligible to claim this refund in Vaughan.
  • A positive balance in the capital dividend account
    should be paid as soon as possible as subsequent capital losses will reduce the amount otherwise available for tax-free distribution according to Accountant in Vaughan.
  • In order to justify rental loss deductions, the
    taxpayer should provide sufficient evidence of a reasonable expectation of  profit from rental activities. Such proof could, for instance, involve a solid business plan or evidence of reasonable leverage and adequate capitalization by Tax Accountant at Vaughan.
  • Profits and losses from rental property can affect your
    RRSP deduction limit by Accountant in Vaughan.
  • When determining whether a self-employment enterprise, such as a sole proprietorship or partnership, constitutes a true business with allowable expense deductions, rather than being of a personal nature under which such deductions would be denied, the CRA generally places a great deal of emphasis on whether or not the business has a reasonable expectation of profit. Other factors include the amount of time devoted to the business and, depending on the nature of the enterprise, the existence of employees and other factors by Tax Accountant in Vaughan.
  • The salary paid to a family member may allow that
    individual to become eligible for CPP and RRSP contributions; therefore, it is recommended salary to be paid lower income individual by accountant in Vaughan.
  • A bed and breakfast enterprise may also qualify as
    workspace in the home, provided the guest rooms are located inside the owner’s home and not in a separate dwelling.
  • Bottles of liquor or certain food items given as gifts at Christmas or on other special occasions may also be subject to
    the 50 per cent limitation on business meals and entertainment.
  • If you anticipate that the computer software you
    purchased has an expected business life in excess of one year, you should capitalize rather than expense the cost by Accountant Vaughan.
  • Specific costs incurred by employers to improve business
    premises access for the disabled may be deducted in the year they are
    incurred and need not be capitalized.
  • If you dispose of one of several identical eligible
    capital properties with a shared value, you may use an average cost to determine the value of the individual property sold by accountant vaughan.

 

  • For more information please see your Accountant at Vaughan or call us at 905-794-8283.


Tax Tips by Accountant in GTA

  • The payment of accumulated sick leave credits may qualify as a retiring allowance if such payment is made in recognition of long service or in respect of the loss of an office or employment.
  • The CRA takes the position that private company employees who retire but retain a seat on the board of directors at nominal compensation may still collect a retiring allowance. However, employees of a public company who retire but retain their seat are not considered to have terminated their employment and are thus not eligible for a retiring allowance.
    Tax Accountant GTA
  • Legal fees incurred in a termination case don’t necessarily have to be paid to a lawyer in order to be deductible. Fees paid to another professional, such as a labour relations consultant retained to negotiate a severance package, may also be deductible by Tax Accountant GTA.
  • If your expenses exceed commission-related income, there may be alternative methods of making claims available to you.  Consult your tax accountant in gta for advice on how to maximize tax savings.
  • If you are a commissioned employee, consider leasing  rather than purchasing capital equipment (such as a computer) where CCA is not allowed tax accountant gta.
  • Commissioned life insurance salespersons are allowed to deduct commissions earned with respect to the purchase of their own policies.
  • Commissioned sales employees who work in their homes should ensure that a separate business telephone line exists in order for regular phone expenses, other than business long-distance charges, to be deductible by tax accountant in gta.
  • CRA Guide RC4110, entitled Employee or Self-Employed?, outlines detailed criteria for determining whether you are employed or self-employed. The major themes of this booklet include an analysis of who has control over the working environment; who owns the tools necessary to do the job; as well as who bears the brunt of responsibility for a potential risk/reward scenario when it comes to a financial profit or loss, Accountant in GTA.
  • Self-employment might also exist in circumstances  where a worker is hired through an agency for various temporary assignments.
  • Consider employing your spouse or common-law partner and/or children to take advantage of income splitting opportunities. Any salary paid must be reasonable for the work performed and T4 slip must be issued by Accountant GTA.
  • You may also want to consider paying out active corporate income that would otherwise attract high corporate rates, e.g., profits in excess of $200,000, as bonuses. Note, however, that accrued bonuses must be paid within 180 days even if you have to lend the after-tax proceeds back to the corporation according to Tax Accountant GTA.
  • When determining the optimal mix of salary and dividends, ensure that personal tax credits are fully utilized. Maintain desired levels of salary for purposes of CPP and RRSP contributions.
  • Because salaries paid by management companies are effectively subject to GST, exempt professionals should consider directly employing administrative staff in GTA.
  • For more information please see your Tax Accountant in GTA or call us at 905-794-8283.

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Tax Tips Accountant at Brampton

  • A standby charge may not apply under certain,  well-defined, circumstances. If, for instance, the employer’s policy is to have an employee return the automobile to company premises when they embark on a business trip, the standby charge should be prorated to exclude those days. But if the employee voluntarily leaves the automobile  at the employer’s premises over that period, those days will probably count toward the standby charge, Accountant at Brampton.
  • The full operating benefit for personal use of an automobile applies if the employer pays any operating expenses. Therefore, it may benefit you to fully reimburse your employer for such coverage.

    Accountant Brampton

    Accountant Brampton

  • The standby charge is calculated on the vehicle’s original cost regardless of its age. If it is an older vehicle, consider purchasing the car from your employer. Note, however, that if a leased automobile is purchased at less than its fair market value, the difference is considered a taxable benefit and must be included in your income according Accountant at Brampton.
  • If you exercise an option to purchase an automobile from your employer at less than its fair market value (FMV), the  difference between the price paid and FMV is considered to be a taxable benefit Tax Accountant in Brampton.
  • Travel between your home and employer’s office is generally
    considered to constitute personal, rather than business use of the automobile. If, however, you are required to make a business stop between
    your home and the office at the request of your employer, the entire distance traveled throughout the day may constitute business, rather than personal use Accountant at Brampton.
  • Keep a record log to support business mileage by Accountant in Brampton.
  • Employer-subsidized parking must generally be included in income if the benefit is being provided primarily to the employee. However, if the parking spot is also provided for the benefit of the employer, to allow the employee to use their automobile in the course of carrying out business-related duties during office hours, or save on
    taxi fares when required to work late, for example, this amount might be reduced or waived by Tax Accountant in Brampton.
  • Salespersons or other employees who live and travel in a motor home might be able to deduct expenses of that motor home relative to the proportion it is used for business (i.e. distance traveled).
  • Even though you may pay tax on the imputed interest
    benefit, borrowing funds from your employer may prove to be more efficient and less expensive than other sources. However, careful evaluation of borrowing alternatives may require professional advice from Accountant in Brampton.
  • If you expect interest rates to increase, consider renegotiating an employee home-purchase loan for an additional term. The taxable benefit might be minimized over the next five years of that term by accountant at Brampton.
  • If you participate in a deferred salary leave plan, you must return to your regular employment following a leave of absence for a period that is at least as long as the leave itself, Accountant at Brampton. Otherwise any  deferred amounts, plus unpaid interest, immediately become taxable as employment income, whether paid out or not,
    during the taxation year you  realize you can’t return to work for the specified period.
  • In cases involving a loss of office or employment,  you may receive an amount awarded as damages by a human rights tribunal.  If that amount is part of a retiring allowance, you might be able to exclude
    a reasonable amount of such allowances from income for tax purposes by Tax Accountant Brampton. The Ontario Human Rights Code imposes a $10,000 limit for such an award.
  • Years of past service need not have been continuous. Where there were gaps in employment and the employee has “bought back” years of service under a registered pension plan, special taxation rules may apply by Accountant in Brampton.
  • All or a portion of payments with respect to a loss of employment may still qualify as a retiring allowance, even if they are made before the employer/employee relationship has been formally severed. If, however, a retiring allowance initiates while an employee remains on the company’s payroll there must be some evidence the cessation of that relationship, including the receipt of employee benefits, is scheduled to occur at a fixed date according to Tax Accountant in Brampton.
  •  For more information please see your Tax Accountant at
    Brampton or call us at 905-794-8283.


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