Tax Tips


Business and Corporate

Steps to dissolve a corporation Posted on Sep 25, 2020

Here are the steps to dissolve an ON corporation: Request letter of consent to dissolve from ON division of CRA (CTAO division). Request can be done by email. They will mail the letter of consent to you. Google Form 10 (articles of dissolution ON). C... More
 

Avoid CRA Audit headache - maintain trips log Posted on Feb 12, 2020

If you deduct vehicle expenses you must maintain TRIPS LOG. The log should contain the date of the trip, purpose, starting point, destination point and km driven. This is a popular expense line that CRA audits. Vehicle expenses are not deductible wit... More
 

Construction business paying subcontractors Posted on Nov 18, 2019

Are you aware that you have to report those payments to the CRA? T5018 slips must be filed within 6 month of your year end or a calendar year end. Must report if construction is your primary source of income. >50% Failure to comply: If you fail to... More
 

You CAN do business without corporation Posted on Oct 28, 2019

It is a common misconception that, to do business in Canada you must first register, tell the government right away, do something... You have this great idea or product that you are excited to start selling, you are incurring expenses along the way. ... More
 

Cash accumulated in a corporation - how to use? Posted on Oct 21, 2019

Dear business owner, please be reminded that a corporation is a separate business entity from you. To use the cash for your personal needs, you need to take money out from a corporation. You need to take out salary as compensation for your efforts. O... More
 

Provincial or Federal corporation Posted on Oct 10, 2019

So, you determined that corporation is the right business structure for you. But should you incorporate federally or provincially? Here are the main differences: 1.Federal corporation provides corporate name protection across the county.This means th... More
 

Tax by Installments Posted on Sep 24, 2019

The general rule is hat if your tax payable for a previous year was > $3K, you need to pay tax by installments as the government doesn't want to wait the entire year to get the money. Be very careful if a previous year was a short tax year. An... More
 

Next steps after incorporation Posted on Sep 16, 2019

You have INCORPORATED your business. What are your next steps? Checklist below. Open programs with CRA. You need a business number to operate. Upon incorporation, you have received articles of incorporation with corporate number. This is different fr... More
 

What to bring to a first meeting with your accountant? Posted on Aug 29, 2019

If you are running a small Incorporated business or a sole proprietorship, likely all your accounting needs are performed by one person who is your bookkeeper, accountant, tax consultant. So, your first year ended, and you need to provide information... More
 

Incorporate or not: this is the question Posted on Aug 16, 2019

Should you incorporate your business? Here are quick bullet points that will help you to decide: Corporate tax rate is lower than personal but you can’t use the earning from the corporation without taking the money out to a personal level. Henc... More
 

How to register a business in Ontario? Posted on Mar 19, 2015

How to register a business in Ontario? Our clients ask this question very often. There is abundance of information on the internet including both federal and provincial government websites. Surprisingly enough, despite all this, one can spend hours s... More
 

Who should own the car - I or my business? Posted on Feb 26, 2015

Do you have a car and an incorporated business? Then probably you have asked yourself - how do I deduct the car use on my tax return? Use of cars for business purposes is a popular deduction that people like to make. As people often share one car bet... More
 

Automobile allowance rates for 2015 Posted on Feb 25, 2015

If you are small business and deduct automobile expenses then in 2015 you will be better off. The automobile allowance rates (i.e. how much you can deduct per kilometer driven) for 2015 have increased. So, it is: 55¢ per kilometre for the first ... More
 

HST

Short term rentals – HST implications Posted on Jul 07, 2022

From July 1, 2022, you must collect GST/HST on stays less than one month in duration. That is because these stays are defined as commercial activity by the Excise Tax Act. You can qualify for exemption from collection of GST/HST on short term rentals... More
 

ITC on capital assets used for business Posted on Jul 18, 2021

Lots of HST questions came up from my clients recently. When you buy capital assets to be used for your business, how much ITCs (HST to be received) you could claim? For example: You bought a computer for $2,000 plus the GST/HST. You will use the com... More
 

HST on tips for service - yes or no? Posted on Oct 18, 2020

Here is an HST tip for TIP RECEIVERS. Cosmeticians, taxi drivers, hair dressers, restaurant servers etc . Ever wondered if you should collect HST on the tips your customers give you? The answer is ... NO. As long as the tip amount is optional to the ... More
 

HST – QUICK METHOD Posted on Sep 24, 2019

If you are registered for an HST and never heard of a QUICK METHOD you might be losing margin from your profit. HST Quick method is available to small businesses to calculate the net tax. It is very beneficial for a business that have income (sales) ... More
 

Do you want to estimate your HST? Posted on Mar 31, 2015

If you wonder what amount of HST you might owe to the taxman, you can you use our HST calculator to estimate that. Just follow the link http://www.pp-accounting.com/GstHst/indexor in the menu go to Calculators, then selectHST/GST Calculator.It is ver... More
 

Important DEADLINES

Tax deadline extended till May 5th Posted on Apr 28, 2015

This sounds weird... but due toa humanerror Canada Revenue Agency extended the electronic filing deadline by 5 more days. See morehttp://www.cbc.ca/news/politics/canada-revenue-agency-error-gives-5-more-days-to-file-taxes-1.3051754... More
 

Non-resident, international and cross-border

Underused Housing Tax (UHT) Posted on Sep 24, 2024

Underused Housing Tax (UHT) What is it? It is an annual 1% tax on the value of residential real estate. This started on Jan 1, 2022. Step 1 - Is it applicable to you? If you (or your corporation) own a residential property in Canada as of Dec 31 then... More
 

Non resident renting out Canadian real property Posted on Jun 28, 2021

When a non resident rents out a Canadian property - withholding tax needs to be paid to CRA monthly. By the 15th of the month, following the month, rental income is received. Non-resident needs to open a non-resident number with CRA. CRA will send Fo... More
 

Non resident - selling a property in Cdn Posted on Jan 27, 2020

If you are a non resident and is about to dispose a property in Canada - you must notify the government and obtain a Certificate of Compliance. If you are giving a notice of a completed disposition, you must notify the CRA by registered mail no later... More
 

Residency and Taxes Posted on Sep 24, 2019

How to determine in which country you are a RESIDENT and most importantly, where should you PAY TAXES? The most important thing to remember that your immigration status is not relevant. What determines to which country you owe taxes, is your RESIDENC... More
 

Personal Tax

Podcast for New immigrants – what you need to know about personal tax returns (RU) Posted on Jun 15, 2022

https://www.youtube.com/watch?v=qh-cCEsn-YY&fbclid=IwAR2wj30tNV7WC1UkePx-VvKQpVAmtR4C23Arx0OjgtemrLQOJzhhrJdFNPw... More
 

CPP contributions - can elect to stop at 65 Posted on Jan 24, 2022

All Canadian employees and self employed individuals, must contribute to CPP until they are 65. If you are employed, your employer deducts CPP contributions from your salary and remits them to CRA monthly. If you are self employed (earning business o... More
 

Child care benefits - summary Posted on Mar 20, 2020

Child Care and Benefits summary Eligibility: You must be primarily responsible for the care and upbringing of the child. You must be a resident of Canada for tax purposes. You or your spouse or common-law partner must be: a Canadian citizen a permane... More
 

Caregiver of infirm dependent > 18 Posted on Mar 10, 2020

If you are supporting financially an adult relative who has a disability, most likely you are eligible for a $7,140 tax credit. For example, you are paying for a nursing home where your mother or grandmother resides. Dependent’s income should b... More
 

Attendant care Posted on Mar 10, 2020

Attendant care for a disabled relative is a large expense. It is deductible. There are special rules when claiming the disability amount and attendant care as medical expenses. Options should be examined to make the most out of it for your family. 1.... More
 

Child care expenses Posted on Mar 10, 2020

If you pay one of your minor children to babysit their siblings, it is not an eligible child care expense. Specifically, when the childcare service are provided by an individual, the individual cannot be ONE of the following: 1. Child's father or... More
 

Foreign tuition fees - qualify for a credit Posted on Mar 08, 2020

Postsecondary studies outside Canada DOqualify for the tuition tax credit. Under the Income Tax Act, students can claim the tuition tax credit for postsecondary studies abroad if they are “in full-time attendance at a university outside Canada ... More
 

New 2019 Childcare tax credit (CARE) Posted on Feb 23, 2020

NEW CHILDCARE REFUNDABLE TAX CREDIT in ON. This one is on top of the childcare deduction that was available in previous years. If family income is under $150K, families can claim a % of their eligible childcare expenses as tax credit. Eligible childc... More
 

T1135 - specified foreign property Posted on Dec 03, 2019

T1135 form is a beast . Foreign property over $100,000 needs to be disclosed . If you are not sure what goes on the form, ASK. Guessing is expensive as penalties are high . And not knowing the rules won’t relieve you from trouble . For example ... More
 

Charitable donations Posted on Nov 05, 2019

I was asked last week to write a tax tip about the TAX SAVING of CHARITABLE CONTRIBUTIONS on a PERSONAL TAX return. Obviously, when a person contributes to a charity, it is the joy of giving that occupies him. However, there is definitely a favourabl... More
 

Deductible medical expenses Posted on Sep 30, 2019

CRA allows to deduct many different things as medical expenses. Some of the allowed expenses will pleasently surprise you.They are all orgnized in an alphabetical order on CRA website. Instead of me summaring it, here is a link to the official inform... More
 

Childcare expenses in a nutshell Posted on Mar 02, 2015

Childcare expenses could be claimed for children up to 16 years old Don’t miss out on childcare expenses deduction. If you have children up to 16 years of age and you paid someone to take care for your children, you can deduct those expenses on... More
 

Children fitness amount increased in 2014 to $1,000 from $500 Posted on Feb 26, 2015

If your child was enrolled in classes that required physical activities, you can deduct up to $1,000 of fees paid for each child (up to 16 years of age). Physical activity includes any class that requires muscular strength, muscular endurance, flexib... More
 

Family caregiver amount Posted on Feb 26, 2015

Do you live with an elderly parent and/or grandparent? Many people are not aware that they are eligible to claim the family caregiver amount on their tax return. It is additional $2,058 tax credit that you can get if you are eligible to claim the eli... More
 

Real Estate

Expense deductions for "non-compliant" short-term rentals Posted on Nov 28, 2024

Starting January 1, 2024, expense deductions for short-term rentals will be denied if the property is deemed non-compliant. These changes target properties that do not comply with provincial or municipal requirements. Key Points: Definition of Non-Co... More
 

(UHT) Underused Housing Tax Posted on Mar 03, 2023

Underused Housing Tax (UHT) What is it? It is an annual 1% tax on the value of residential real estate. This started on Jan 1, 2022. Step 1 - Is it applicable to you? If you (or your corporation) own a residential property in Canada as of Dec 31 then... More
 

Short term rentals – HST implications Posted on Jul 07, 2022

From July 1, 2022, you must collect GST/HST on stays less than one month in duration. That is because these stays are defined as commercial activity by the Excise Tax Act. You can qualify for exemption from collection of GST/HST on short term rentals... More
 

Accounting Advice on How to Get a Mortgage Pre-Approval Posted on Jan 24, 2021

Courtesy of Nadia Chentsova, Real Estate Bay Realty Brokerage Getting a mortgage pre-approval is a great first step in the home buying process. Getting a mortgage pre-approval involves meeting up with a loan officer, so, they can go over your finance... More
 

Renting part of your principle residence – tax consequences? Posted on Sep 14, 2020

As most taxpayers know, when you sell your principle residence, the capital gain on the disposition is exempt from tax as it is protected by a principle residence exemption. But many people are asking if the gain is protected if they rent portion of ... More
 

Property and Family - misconception 2 Posted on Oct 09, 2019

When parents purchase a principle residence, should children be included as co-owners so that no further actions need to be taken upon inheritance? Below points may make this arrangement bad from a tax perspective: Kids who are co-owners usually own ... More
 

Investment in property - misconception 1 Posted on Oct 03, 2019

Often I hear clients get advised to purchase an investment property through a corporation, thinking that corporate tax rate is lower than personal. This is misleading. Assuming your corporation doesn't have 5 full time employees, the investment i... More
 

RENTING below fair market value Posted on Aug 20, 2019

When you rent space to relatives, often they pay you rent below fair market value or no rent at all. You DO NOT report this amount in your income, and you CANNOT claim rental expenses. This is considered a cost-sharing arrangement, so you CANNOT clai... More
 

Renting your home – election to avoid deemed disposition Posted on Aug 20, 2019

Renting your home – election to avoid deemed disposition When you start renting your personal use property, change in use occurs from principle property to rental. Generally, you lose the principle residence status that shelters the gain at the... More