Death of a Taxpayer – A To Do List
Death of a family member is one of the most stressful events in life. To compound the grief, there are final tax matters to deal with either by April 30th of the following year or 6 months after the date of death.
What To Do Upon The Death of a Taxpayer?
Upon the death of a taxpayer, at a minimum, there is a final return (“terminal return”) to be filed with the CRA and three optional returns to be filed if desired. In addition, a trust return to report income received after death is ... Read MoreVancouver Tax Planning for CCPC’s As We Approach the Second Half of 2018
As the summer of 2018 comes to an end, vancouver tax advisors are starting to contemplate the tax planning work that will be required for CCPC come fall 2018. At the start of 2018, tax advisors and incorporated businesses awaited the 2018 federal budget with high level of anxiety. After all, the initial announcement to eliminate the tax deferral advantage that a CCPC enjoyed using its after-tax business income to earn passive income was severely punitive. As time passed and Ottawa responded ... Read More
Vancouver Sale of Rental Property and the Principal Residence Exemption
While at dinner recently, a friend of mine, Carla, informed me that she sold her rental property and was curious about the amount of tax that she would owe on the gain. Upon further questioning, I uncovered that, in the past, my friend had lived in this rental property (a condo) for many years. She purchased a second condo a few years back and moved into it. She had then rented out the first condo—the one she just sold. From her line of questioning, I realized that, other than the tax ... Read More
A Refresher – When to Incorporate Your Business
When to Incorporate
We recently published a blog post on small business corporate tax rates in British Columbia heading downwards to 11.5% on the first $500,000 by 2019. This reflects a 15% reduction in taxes from the current 13.5%. Considering that taxes are a big-ticket expense item for businesses, a 15% reduction is a huge discount. However, upcoming corporate tax rate reductions are only advantageous to businesses that can leverage them. Successful proprietors are often burdened ... Read MoreThe Best Way to Go About a CRA Audit
The average small business owner in Vancouver has a limited budget to deal with their marketing, accounting, IT and high location rental costs. Successful businesses tend to be surrounded by strong support networks, which include bookkeepers and tax advisors. As a result, their books and records are orderly, current, and their tax filings are consistent with their accounting records. For these businesses, a CRA audit is merely a small project to attend to with the help of a professional ... Read More
CRA Assessed You and Now You Owe More Taxes – What’s Next?
It’s been about a month since the filing deadline for your 2014 personal income tax returns. Since then, the CRA has been sending out notices of assessment or requests for more information. In some taxpayers’ cases, they have received a notice of assessment, which reflects different results from the tax return they have filed. In rare cases, the notice will state that the taxes owing are lower than the amount calculated by the accountant. However, in most cases where there is a difference, the ... Read More
The Big Tax Deductions vs The Deductions that Are More Fuss than Their Worth
Right now, Canadians are rushing to file their personal income tax returns on time. At Mew and Company, we are gearing up to process all of the documentation needed to file complete and accurate returns by April 30, 2015. Although we have been preparing personal tax returns for many years, it feels like every year, there are more documents to request and process than the previous year. A significant reason for this is perhaps that my clients’ lives have become more complicated from a tax ... Read More
Effective Income Splitting Needs Professional Pre Planning
Income Splitting Pre Planning We are now firmly into the 2015 calendar year and with the New Year come new tax laws aimed at reducing your family’s tax burden (eg. recently announced family tax cuts) and changes to existing tax laws that reduce old benefits (eg. higher personal taxes on ineligible dividends).
Ineligible Dividends
Ineligible dividends are essentially the type of dividends that most profitable Canadian small business owners get from their corporations. They represent the ... Read MoreCanadian Income Tax Penalties: Repeated Failure to Report Income
Penalties and interest charges are the most common tools the CRA uses to enforce compliance with the Canadian Income Tax Act. ‘Compliance’ refers to filing the tax and information returns in their entirety and on time. When a taxpayer (a person or a corporation) files late, there are late filing penalties on unpaid balances. There is another serious penalty in the Income Tax Act that is catching some taxpayers by surprise. This penalty arises when a taxpayer fails to report an income amount ... Read More
