As 2018 comes to an end, tax advisors across Canada are busy restructuring and planning many corporations to respond to the new tax rules that came into existence this year.
Vancouver 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 Tax Planning Dilemmas As 2017 Come To A Close
2017 has been a year of drama for Vancouver tax advisors and I am happy that it is coming to an end. I have to admit, it is not so much January 1, 2018 I am looking forward to. I am anxiously waiting for the 2018 budget date which may bring all Canadian private corporations more clarity on their financial and tax future. Vancouver Tax Planning - Changes For Private Coporations On July 18, 2017, Ottawa proposed dramatic changes to the taxation of private corporations. Since then, Ottawa has ... Read More
Dealing With the Death of Your Accountant
There are many tax-planning tips for death and estate, but not much is written about the death of your accountant who has been taking care of the family’s finances for decades. I just read a statistic that says 43% of financial advisors are over the age of 55, and are approaching retirement. Even my own experience with new clients tells me that there are more than a few well-established financial advisors getting ready to retire in the Greater Vancouver Area. If you suspect that your ... Read More
Vancouver Tax Planning: Time to Look at the Capital Dividend Account
As we reach the mid-point of the 2017 calendar year, it has been a good financial year for many British Columbian investors. Real estate gains continue and, for equity investors, the stock market has been on a tear since the fall of 2016. Vancouver Corporate Tax Planning With the conclusion of the personal tax-filing season, summer and fall is the time for corporate tax planning. The one tax planning item that should be looked at this year, due to such favorable macro-financial conditions, is ... Read More
More Reasons for BC Businesses to Incorporate
Small business corporate tax rates in BC heading downwards
Several changes to tax legislation announced in the 2015 Canadian federal budget were recently granted Royal Assent. A measure that is highly relevant for small businesses in BC going forward is the gradual decrease in the combined federal and provincial corporate tax rates over the next 4 years, which are as follows: 13.5 % - present rate 13.0 % - effective January 1, 2016 12.5 % - effective January 1, 2017 12.0 % - ... Read MoreUse of Family Trust for Income Splitting
Income Splitting Using a Family Trust As discussed and referenced in previous blog posts, a successful corporation with surplus retained earnings can reap large tax-saving benefits from income splitting when done with spouse and children. When the owner/shareholder of a business wishes to take advantage of income splitting opportunities as his children reach adult age, the easiest and most economical way to accomplish this is by restructuring the existing share classes and holdings. Ideally, ... Read More
Professional Partnerships and the Incorporated Partners
The 13.5% Corporate Tax Rate I have discussed or referenced in many corporate tax planning blogs that the biggest benefit to being an incorporated Canadian business is that the first $500,000 in corporate profits is taxed at a low 13.5% corporate tax rate. Professionals and their net profits from an incorporate practice also benefit from this corporate tax rate.
Tax Planning Problem for Professional Partnerships
However, many professionals work in a partnership business structure where ... Read MoreThe Costly Consequences of Pretending To Be An Incorporated Consultant
Canadian corporations enjoy a 13.5% corporate tax rate on the first $500,000 of taxable income from active business due to the small business deduction. Therefore, it makes sense for a corporation to structure its business affairs in ways that can take full advantage of this favourable tax rate. The majority of Canadian businesses qualify for the above benefit. However, some “consultants” who may have incorporated their service businesses may be taking advantage of the low corporate tax rate, ... Read More
Tax Planning Tips for IT Consultants
Are you one of the many IT professionals currently working in the booming tech sector in the Vancouver area? You may be paying too many unnecessary taxes! Here are some helpful tips, courtesy of your Vancouver Chartered Accountants at Mew and Company: Determine if you are in fact self-employed under CRA’s definition. The RC4110 guide from CRA is written for laymen and is easy to understand. If you do not meet the definition of “self-employed” using the criteria listed in this guide, but you ... Read More
