Blog

Tax Tips & Traps Second Quarter – Issue 118

Highlights:

Tax Ticklers
Employment Insurance: Some Improvements
Sharing Economy: Know Your Tax Obligations
Uber Drivers: Registration for GST/HST
Personal Use Asset in a Corporation: GST/HST and Other Tax Issues
Donation of Publicly Traded Securities: Increase the Value of Charitable Giving
Investment Management Fees for RRSPs, RRIFs, and TFSAs: Are Changes Coming?
Website History: Finding What You Thought Was Lost on the Internet
Charities and For-Profits Working Together: Receipts for Cause-Related Marketing
Leave of Absence: There Are Tax Obligations

 

TTT118

Categories: Tax

Tax, Tips & Traps First Quarter – Issue 117 & Personal Income Tax Return Checklist

Highlights:

Tax Ticklers
Principal Residence Exemption (PRE):  Changes to Reporting
Employment Expenses:  Requirements for Deduction
Meal Reimbursements:  A Taxable Benefit?
Taxpayer Relief:  Financial Hardship
Payroll Advances:  Tax Consequence
Objections:  Not so Fast
CRA Strategies on Offshore Tax Evasion:  The World is Shrinking

 

Tax, Tips & Traps – Issue 117

2016PersonalIncomeTaxReturnChecklist

 

Categories: Tax

Proposed Income Tax Measures Impacting Your Home

If you sell your home, there is new income tax reporting to consider.

Under current income tax rules, when you sell your home for a profit there is no income tax and there is nothing reported in your income tax return for the year of sale assuming your home qualifies as a principal residence.

Beginning with the 2016 tax year under new proposed income tax measures, the Canada Revenue Agency will require a taxpayer to report the disposition of property that qualifies for the principal residence exemption.

The year of acquisition, proceeds of disposition and the description of the property are the information that will have to be reported.  We will need this information in order to prepare your income tax return.

Further information can be found on the Canada Revenue Agency website as follows.

http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa11-eng.html

Other changes have been made to the principal residence exemption that would impact non-residents and trusts, however in general terms the good news is that in a situation where an individual (or couple) who were at all times resident in Canada own one or more residences there has been no additional income tax levied.

Where an individual (or a couple) owns more than one residence, such as a city home and a cottage, income tax continues to apply on any gain realized on the disposition of a property not designated as a principal residence.  An individual (or a couple) can only designate one residence as their principal residence.

Should you have questions do not hesitate to contact you trusted advisor at Graham Scott Enns.

 

Categories: Tax

Open House In Memory of Don Lemon

Open House In Memory

Of Don Lemon

 

CASO Station

November 9, 2016

 don-lemon-pic

 

Don Lemon touched the lives of many in the community, and with his sudden passing in August, many of us did not have an opportunity to reflect on Don’s life, and share memories with others.

The partners at Graham Scott Enns, with support from the CASO Station, have arranged for a celebration of Don’s life on November 9, which we hope you can join us for.

There is no charge for the tickets for the evening, however any sponsorships or donations received will be added to a contribution being made by Graham Scott Enns towards a memorial scholarship fund in Don’s name, to be directed to assist students from Central Elgin Collegiate Institute (where Don attended) who are graduating into business or accounting programs. Depending on the level of funds raised, the scholarship may be extended to other secondary schools in the city.

Please RSVP to let us know whether you will be able to attend.

 don-lemon-pic2 Wednesday November 9, 2016

5:30pm to 8:00pm

CASO STATION

750 Talbot St, St. Thomas

Cash bar

Appetizers provided

RSVP please:

dnewell@gsellp.com or 519-633-0700 ext 212

Tax Tips & Traps Second Quarter – Issue 114

Highlights:

Tax Ticklers
Tips and Gratuities
Working But Not Paying Yourself:  Employment Insurance Issues
CRA Scammers:  Who is Really Calling?
Multiplication Of The Small Business Deduction (SBD):  Significant Changes Ahead
Combined Audits of Owner-Managed Companies:  Shareholders’ Personal Information
Credit Card Comparison:  Do You Have the Best Card for Your Needs?
CRA Online Services:  My Account Update
Insurable Earnings:  Related Employee

TTT114 Formatted
Please be sure to read all of the Blogs posted on our website.

Categories: Tax

Update – Federal Budget 2016

The Federal Budget was presented March 22, 2016 by Finance Minister Bill Morneau.

Many of the speculated and feared changes did not materialize.  In particular there was no change made to the capital gains inclusion rate from the current 50%, nor was the access to the small business deduction altered for Professional Corporations earning income directly.  The following represent what we feel are key changes impacting our clients:

Corporate Tax

Previously announced decreases in the small business tax rate  for small business income earned by a Canadian controlled private corporation (CCPC) of 0.5% per year for 2017, 2018 and 2019 were revoked.  As a result the 2016 rate of 10.5% for Federal corporate tax purposes on the first $500,000 of active business income is to remain in place going forward.  In Ontario the combined rate is therefore 15% for the calendar year 2016 and beyond.

The general corporate tax rate of 15% for Federal tax purposes remains the same for active business income not eligible for the small business deduction.

Access to the $500,000 small business deduction on active business income is restricted for certain corporate and partnership structures for taxation years beginning on or after March 22, 2016.  These rules apply in very specific circumstances so professional advice is required if you think this might apply to your situation.  Of particular note, there was no change to the basic definitions that allow a corporation to claim the small business deduction and hence the low rate of corporate tax in general.

There is also a change in the way income from an associated company on property is taxed in very specific circumstances.  The budget proposes to limit the eligibility of having income taxed at the small business rate earned from an associated corporation where the corporation is not a CCPC or has made an election not to be associated.  Again these are very specific circumstances and professional advice is required should you fall into this change.

The budget also noted that the government has completed its review the characterization of income from property as active and hence eligible to be taxed at the small business rate and determined that no change is to be made at this time.

Changes to the rules for the tax treatment of eligible capital property previously announced will be effective January 1, 2017.

The tax rate for personal services businesses is increased to 33% from 28% for Federal income tax purposes.

Life Insurance

Budget 2016 proposes two major changes:

  1. Dispositions occurring after March 21, 2016 will include the fair market value of any consideration paid to the policy holder in their proceeds of disposition.  Previously the proceeds of disposition were measured as the cash surrender value.
  2. Changes to reduce the inclusion to the capital dividend account for deaths occurring on or after the budget date.

Personal Tax

No further tax rate changes were proposed.

The following tax credits were eliminated:

  1. Family tax cut.
  2. Education and text book credits.
  3. Children’s fitness and arts tax credits.

The budget did however include one new tax credit for teacher and early childhood educator school supplies to a maximum of $1,000 spent on qualified items.

There were also a number of very specific changes applying in limited circumstances that do not apply to the average taxpayer.

GST/HST

There are no changes proposed in this area.

 

Please consult your trusted advisor at Graham Scott Enns LLP to discuss how any of these changes might apply to your unique tax situation.

Categories: Tax