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Tax situation

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Tax claims?

The average person cannot claim most day-to-day expenses such as car maintenance, food purchases, rent/mortgage payments or other living expenses among others. However, there are certain employee deductions that can be claimed to reduce your taxable income. You can claim items such as donations to a charity or political party, university/college tuition and books, medical … Continue reading Tax claims?

Start Up Costs

Hello Jamaiya, Congratulations on your new business venture. If you need help with any financial or accounting activities, feel free to contact us. Startup costs are tax deductible if the business has commenced operations. To commence operations doesn’t require you to start having sales or income. For example, if you registered your business, opened up … Continue reading Start Up Costs

Canadian Corporate Dividends

Hello Bernard, I am glad our website is helping you out! Dividends paid by a Canadian corporation to other Canadian corporation are not taxable, if the two corporations are connected. In this context, the term connected means that at least 10% of the shares of the payer corporation are owned by the corporation receiving the … Continue reading Canadian Corporate Dividends

Trustee moving out of Country

There are no restrictions as to the residency of an individual serving as a trustee. However, your change in residency may play a determining factor in the residency of the trust for tax purposes. Just to let you know, if the majority of the trustees move outside of Canada, the trust will be deemed a … Continue reading Trustee moving out of Country

Does HST get recorded on the Income statement?

Hi Paula HST collected from customers is recorded to the HST Payable account on the balance sheet. HST collected increases the HST Payable account whereas Input Tax Credits (i.e. HST paid on business purchases) decreases the HST Payable account.

Whose name should go on a property title?

For tax purposes, it makes sense to put the property under the name of the person with the lower income, since the higher the income the more taxes you pay. Itā€™s beneficial to do this if the property is turning a profit, as a way to keep you paying the least amount of tax on … Continue reading Whose name should go on a property title?

Car leased under corporation

Thanks for your question. If the lease is in the company’s name, then the company should pay for all car expenses including insurance, repairs, lease payments, gas, toll charges and parking. You will have to switch the insurance to the company name. Allan Madan, CPA, CA

Freight Broker – Form 1099 required?

If the Canadian company is incorporated, then you need an EIN and form W8-BEN-E. As long as the foreign contractor is not a U.S. person and the services are wholly performed outside the U.S., then no Form 1099 is required and no withholding is required.

How do I teach my kids tax?

Hello. I always recommended starting as early as possible when it comes to teaching your kids about financial responsibility. The first thing I recommend doing is using tax season as a ā€œteachable momentā€. Though they will not pay taxes until they have their first job, even small children can understand the basic principle behind taxation. … Continue reading How do I teach my kids tax?

Been living in Canada for a few years, will giving up my citizenship work?

If you had ever lived in the United States, you must file a personal tax return for the year(s) that you resided in the U.S. If you renounce your citizenship it DOES NOT exempt you from having to file delinquent taxes. It has no influence on any financial or tax obligations towards the United States. … Continue reading Been living in Canada for a few years, will giving up my citizenship work?

Becoming self-employed with contract work

Hello Quentin, there are two factors you need to keep in mind when you want to become self-employed. The first is control factors and the second is economic factors. For control factors, you must prove that you have control over certain aspects of the services you provide. This means you must control when, where, and … Continue reading Becoming self-employed with contract work

Paying Salaries to Family Members

You can pay a reasonable salary to your 17 year old son for work performed. Your son should provide time sheets daily for your records, and an employment agreement should be entered into between you and your son. You still must register for HST, even if the services you are providing are zero-rated (i.e. 0% … Continue reading Paying Salaries to Family Members

Canadian working in the United States and making CPP contributions

Yes, you can voluntarily contribute to the Canada Pension Plan. Please complete form CPT20 http://www.cra-arc.gc.ca/E/pbg/tf/cpt20/cpt20-14e.pdf

How do I withdraw money from my corporation?

Hi Iqbal, You can either be paid salary as an employee of your corporation, or receive dividends as the corporation’s shareholder. To understand which method is better for you, please see http://madanca.com/blog/save-money-salaries-dividends-2014/ Thanks, Allan

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