Tag: business and corporate tax

Can I apply my business losses to my capital gains?

Losses carried forward from business income cannot be applied to capital gains as business losses are classified as non-capital losses. Capital losses are classified as net-capital losses and can only be applied to capital gains.

Should I donate from my small business corporation or personally?

Ideally its beneficial to donate from your corporation as it reduces your taxable income by the full amount donated saving you 15.5% income tax at the corporate tax rate. If you donate personally you’ll receive a tax credit for 15% on the first $200 dollars of donation and 29% above that. Therefore, if your personal … Continue reading Should I donate from my small business corporation or personally?

What are capital dividends and the capital dividend account (CDA) in my small business corporation?

The capital dividend account maintains fair integration between an individual and corporation. When an individual incurs a capital gain only 50% is taxable and the remaining 50% is tax free. When a corporation incurs a capital gain the same concept applies. The non-taxable portion of a capital gain realized by a corporation is added to … Continue reading What are capital dividends and the capital dividend account (CDA) in my small business corporation?

Why are dividends grossed up when received from my small business corporation?

Dividends are paid out of a corporation’s retained earnings, which is technically the net income after taxes each year. Only shareholders are entitled to receive dividends, not employees. Since the corporation has already paid tax on its profits at a rate of 15.5%, a dividend tax credit is provided so taxpayers are not double taxed … Continue reading Why are dividends grossed up when received from my small business corporation?

Is a payment made by a corporation to a sports and recreation club deductible for taxation purposes? Will the deduction result in a taxable shareholder or employee benefit?

In order for the corporation to be eligible for the deduction, it must be transparent (corporation must be ready to prove) that the primary beneficiary of the sports and recreation club was the corporation. This in turn, will ensure that there will be no shareholder or employee taxable benefit. If, there is an inquiry or … Continue reading Is a payment made by a corporation to a sports and recreation club deductible for taxation purposes? Will the deduction result in a taxable shareholder or employee benefit?

5 Reasons an Accountant Should Incorporate Your Business Watch Video

This video & article will take you through 5 reasons an accountant should incorporate your business,

Is it possible to merge two corporations tax free?

In order for two corporations to merge their businesses tax free, in Canada, the following conditions must be met before the merger: All of the corporations must be Canadian corporations. However, this does not mean that they nessecarily have to be CCPC, they only have to be considered to carry on active business in Canada. … Continue reading Is it possible to merge two corporations tax free?

How do I deduct work-in-home expenses under my corporation?

It’s very common for some small businesses to fully operate out of a room in the house.  If you operate as sole-proprietor you can deduct eligible work in home expenses on your personal tax return (T1). If you’re operating as corporation you can charge it as rent expense, which will reduce your corporation’s taxable income and … Continue reading How do I deduct work-in-home expenses under my corporation?

How do I report income earned from a business I operated?

Question: I am a full-time employee of ABC Corporation, but I also earned some income from a separate business I operated this year. How do I report this income? (My business is a sole proprietorship). Answer: As you would include your employment income on your personal tax return, you will also need to do so … Continue reading How do I report income earned from a business I operated?

As a corporation, how does our low salary and high dividend influence our ability to collect CPP?

The CPP Retirement Fund is based on how much and for how long you contribute to the pension plan. When you pay yourself a low salary and a high dividend, it reduces the CPP payout when you retire. However, you will still be entitled to CPP benefits based on the CPP contributions you have made … Continue reading As a corporation, how does our low salary and high dividend influence our ability to collect CPP?

Can I write-off my computer as a business expense if I paid for it personally?

Question I need a new computer, and am going to buy a laptop at some point in the near future. I believe it is appropriate to write this off 100% as a business expense, since the computer will primarily be used in support of business purposes. Is it okay to purchase the computer using my … Continue reading Can I write-off my computer as a business expense if I paid for it personally?

Can I deduct golf dues and memberships as a business expense?

Generally speaking, golf dues and related memberships paid are not deductible for tax purposes. There is 1 major exception:   A deduction is allowed if you are an incorporated professional sports agent. The CRA ruling in regards to this is as follows:  If you can PROVE to the CRA that the primary beneficiary of the incurred golf … Continue reading Can I deduct golf dues and memberships as a business expense?

How to Prepare For a Tax Audit in Canada Watch Video

This short article is about how to prepare for a tax audit in Canada.

Tips for Incorporation Canada Watch Video

This article is about business tips for incorporation Canada.

How to Prepare a Simple HST Return – Part 2 Watch Video

Do you want to know how to increase your personal return tax savings?
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