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My corporation is inactive and I would like to dissolve it, what should I be aware of?
Take the following steps to dissolve your inactive corporation: Before you can dissolve your corporation you have to make sure any outstanding tax liabilities such as HST (sales tax), corporate income taxes and payroll taxes are all paid to the CRA as of the dissolution date. The related tax returns must also have been filed … Continue reading My corporation is inactive and I would like to dissolve it, what should I be aware of?
How to avoid Independent contractor rules when doing business? Watch Video
This article will take you through how to avoid the personal services business rules for IT contractors
As a corporation, when do I have to issue a T4 slip to my employees?
You must issue a T4 slip to your employees if any of the following remuneration was paid: salary, wages, tips, bonus, vacation pay, employment commission taxable benefit or allowances retiring allowance deductions you withheld during the year pension adjustment (PA) amounts for employees who accrued a benefit for the year under your RPP (registered pension … Continue reading As a corporation, when do I have to issue a T4 slip to my employees?
As a Canadian, do I have to file a US tax return for online sales made to the US?
Question: I operate an online business in Canada, as a sole proprietor, which sells goods in the US. What are my US tax filing obligations? Answer: As a Non-Resident alien earning self employment income in the US, you are required to file a US non-resident personal tax return, 1040NR. You must also file Schedule C … Continue reading As a Canadian, do I have to file a US tax return for online sales made to the US?
Are premiums paid for Keyman Insurance tax deductible?
Yes, in limited situations. What is Keyman Insurance? It is an insurance policy taken out by a business to cover any loss of revenue arising from the death or disability of a key member (eg. Partner, employee, etc). Keyman insurance premiums are tax deductible for a business only if one of the following criteria are … Continue reading Are premiums paid for Keyman Insurance tax deductible?
IT Contractors and Consultants Taxes Personal Business Rules Watch Video
Are you an IT contractor or a consultant working on a contract basis?
Are all of my donations eligible for a tax credit (for individuals) or tax deduction (for corporations)?
No, only donations to registered charitable organizations (with the CRA) are eligible for a tax credit for individuals or for a tax deduction for corporations. Before you make a donation, ask the organization if they can provide you with an official donation slip for tax purposes.
Is clothing purchased for business use tax deductible?
Many professions are required to purchase expensive clothing such as business suits, ties shirts etc. The CRA has a strict guideline on determining if business clothing can be tax deductible. You can deduct the cost of work clothes if the following two conditions are met: You must wear them as a condition of your employment … Continue reading Is clothing purchased for business use tax deductible?
What is the criteria for a small business in Canada?
According to Industry Canada, a small business is one that has 5 to 100 employees. For CRA purposes in order to meet the small business deduction (SBD) and be eligible for the lower tax rate of 15.5% (combined Federal + Ontario), the business must meet the Canadian-controlled private corporation (CCPC) criteria and have active business income up … Continue reading What is the criteria for a small business in Canada?
What is the ‘small business deduction’?
The small business deduction is a reduction in corporate taxes for Canadian Controlled Private Corporation, known as CCPC. The small business deduction is provided as an annual tax credit that is calculated as 17% of the least of the corporation’s: Active business income for the year taxable income for the year business limit ($500,000)
Can I purchase a company that has a history of losses to offset the profits of my company?
Question: I am thinking of acquiring a loss-generating business and planning on using its loss to offset the profits that my company is generating, can I do this? Answer: In certain cases, you can. However, you need to be aware of the “acquisition of control rules”. This prevents a profitable corporation from acquiring a corporation … Continue reading Can I purchase a company that has a history of losses to offset the profits of my company?
What amount can I charge to my company in terms of per diem travel expenses?
The CRA looks at what is deemed reasonable in terms of travel expenses. If the travel allowance is reasonable, then you don’t have to include it in your personal income. If it is not reasonable, then it is an income inclusion and you will need to pay tax on it. In terms of what is … Continue reading What amount can I charge to my company in terms of per diem travel expenses?
Do I have to pay tax on a merger between two Canadian companies?
Question: I would like to merge my business with a Canadian company that operates in the same field as me. Is there any way to avoid paying tax on the merger? Answer: The Income Tax Act allows for a tax free merger if the following conditions are met: Both corporations are Canadian Controlled Private Corporations … Continue reading Do I have to pay tax on a merger between two Canadian companies?
What are the tax consequences of changing from a sole proprietorship to a corporation?
Question: I am currently operating as a sole proprietor, but I see the benefits of incorporating my business and wish to do so. However, I have several assets that have appreciated in value (including goodwill) since I began. Is there any way I can transfer these assets tax-free to my corporation? Answer: When you transfer … Continue reading What are the tax consequences of changing from a sole proprietorship to a corporation?
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