Tax Tips


Business and Corporate

Steps to dissolve a corporation Posted on Sep 25, 2020

Here are the steps to dissolve an ON corporation: Request letter of consent to dissolve from ON division of CRA (CTAO division). Request can be done by email. They will mail the letter of consent to you. Google Form 10 (articles of dissolution ON). C... More

Avoid CRA Audit headache - maintain trips log Posted on Feb 12, 2020

If you deduct vehicle expenses you must maintain TRIPS LOG. The log should contain the date of the trip, purpose, starting point, destination point and km driven. This is a popular expense line that CRA audits. Vehicle expenses are not deductible wit... More

Construction business paying subcontractors Posted on Nov 18, 2019

Are you aware that you have to report those payments to the CRA? T5018 slips must be filed within 6 month of your year end or a calendar year end. Must report if construction is your primary source of income. >50% Failure to comply: If you fail to... More

You CAN do business without corporation Posted on Oct 28, 2019

It is a common misconception that, to do business in Canada you must first register, tell the government right away, do something... You have this great idea or product that you are excited to start selling, you are incurring expenses along the way. ... More

Cash accumulated in a corporation - how to use? Posted on Oct 21, 2019

Dear business owner, please be reminded that a corporation is a separate business entity from you. To use the cash for your personal needs, you need to take money out from a corporation. You need to take out salary as compensation for your efforts. O... More

Provincial or Federal corporation Posted on Oct 10, 2019

So, you determined that corporation is the right business structure for you. But should you incorporate federally or provincially? Here are the main differences: 1.Federal corporation provides corporate name protection across the county.This means th... More

Tax by Installments Posted on Sep 24, 2019

The general rule is hat if your tax payable for a previous year was > $3K, you need to pay tax by installments as the government doesn't want to wait the entire year to get the money. Be very careful if a previous year was a short tax year. An... More

Next steps after incorporation Posted on Sep 16, 2019

You have INCORPORATED your business. What are your next steps? Checklist below. Open programs with CRA. You need a business number to operate. Upon incorporation, you have received articles of incorporation with corporate number. This is different fr... More

What to bring to a first meeting with your accountant? Posted on Aug 29, 2019

If you are running a small Incorporated business or a sole proprietorship, likely all your accounting needs are performed by one person who is your bookkeeper, accountant, tax consultant. So, your first year ended, and you need to provide information... More

Incorporate or not: this is the question Posted on Aug 16, 2019

Should you incorporate your business? Here are quick bullet points that will help you to decide: Corporate tax rate is lower than personal but you can’t use the earning from the corporation without taking the money out to a personal level. Henc... More

How to register a business in Ontario? Posted on Mar 19, 2015

How to register a business in Ontario? Our clients ask this question very often. There is abundance of information on the internet including both federal and provincial government websites. Surprisingly enough, despite all this, one can spend hours s... More

Who should own the car - I or my business? Posted on Feb 26, 2015

Do you have a car and an incorporated business? Then probably you have asked yourself - how do I deduct the car use on my tax return? Use of cars for business purposes is a popular deduction that people like to make. As people often share one car bet... More

Automobile allowance rates for 2015 Posted on Feb 25, 2015

If you are small business and deduct automobile expenses then in 2015 you will be better off. The automobile allowance rates (i.e. how much you can deduct per kilometer driven) for 2015 have increased. So, it is: 55¢ per kilometre for the first ... More

COVID-Government assistance

Your eligibility for the CERB - CRA letter Posted on Dec 03, 2020

Year end is approaching and CRA is preparing to issue tax slips for 2020 year. As CERB is a taxable benefit, prior to issuing the tax slips, CRA sent letters to people who in their view are potentially ineligible for CERB. CRA likely used an algoryth... More

Podcast - Government assistance programs for individuals Posted on Oct 28, 2020

Свежий подкаст в котором я отвечаю на вопросы Artem Bytchkov на животрепещущею тему - субсидии от гос-ва для частных лиц по поводу COVID 19.... More

Podcast - Government assistance programs for businesses Posted on Oct 28, 2020

Свежий подкаст в котором я отвечаю на вопросы Artem Bytchkov на животрепещущею тему - субсидии от гос-ва для бизнеса по поводу COVID 19.... More

Canada Emergency Rent Subsidy Posted on Oct 20, 2020

What is it? Rent and mortgage support until June 2021. Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24, 2020. Who is eligible to apply? Canadian business that is paying rent or mortg... More

CEBA – Canada Emergency Business Account. Posted on Oct 20, 2020

How much is the assistance? $40K interest free loan, $10K forgivable if repaid by Dec 31, 2022. Eligibility requirements for the CEBA – two streams: The Borrower is a Canadian operating business (corporation, sole proprietorship, partnership &n... More

CEWS - Canada Emergency Wage Subsidy Posted on Oct 20, 2020

Updated Oct 20 2020 The program is to provide employers with subsidy to pay employees. Employers need to show that they experienced revenue drop. Revenue drop calculation drives the amount of subsidy. Subsidy is % of wages. For all claim periods 1 to... More

CRSB – Canada Recovery Sickness Benefit Posted on Oct 20, 2020

Who can apply? You are unable to workat least 50%of your scheduled work week because you're self-isolating for one of the following reasons: You are sick withCOVID-19or may haveCOVID-19 You are advised to self-isolate due toCOVID-19 You have an u... More

CRCB–Canada recovery caregiving benefit Posted on Oct 20, 2020

Who can apply? Unable to work at least 50% of scheduled work week because you are caring for a family member Caring for a child under 12 or another family member because their care facility is closed or unavailable due to COVID Or because the person ... More

CRB – Canada recovery benefit Posted on Oct 20, 2020

CRB – Canada recovery benefit Who can apply? Employed and self-employed individuals (Not entitled to EI). Not working due to COVID for two weeks or reduction of 50% in average weekly income compared to 2019, 2020 or the last 12 month. Need to b... More

Canada Emergency Response Benefit Posted on Apr 16, 2020

UPDATED April 16th This benefit is available to workers which are defined as: A Canadian resident over 15 years of age that earned $5,000 in 2019 or 12 months before the application. Eligibility The benefit will be available to workers: Residing in C... More

40,000 ineterst free loan Posted on Apr 16, 2020

Updated April 16th What is it? 1. $40K interest-free, government- guaranteed loan to help you pay for operating costs that you're not able to defer as a result of COVID-19 2. $10K (25%) of the $40K loan is eligible for complete forgiveness if $30... More

COVID 19 - субсидии. Подкаст Posted on Apr 05, 2020

Свежий подкаст в котором я отвечаю на вопросы Artem Bytchkov на животрепещущею тему - субсидии от гос-ва по поводу COVID 19. Your browser does not support the audio element.... More

Canada Emergency Wage Subsidy (75%) Posted on Apr 03, 2020

Updated April 4th Who is eligible? Individuals, taxable corporations, partnerships, NPOs and registered charities. No public bodies. Eligible employers are those that are seeing at least 30% drop in revenues when compared to same period last year. Se... More

Temp Wage Subsidy for employers (10%) Posted on Apr 03, 2020

Updated April 4th - 10% wage subsidy - This program is still in effect. However, if the business also qualifies for the 75%, the money received from CEWS (seperate topic in the blog), will be adjusted downwards for payments made through this program.... More

EI vs. CERB Posted on Apr 02, 2020

Some people may be qualified for both programs. You can't receive benefits from both at the same time. But you can receive from one program and then from another. Eligibility: CERB - workers who earned in 2019 or in the last 12 months,at least $5... More

Employees and Employers- EI and ROE Posted on Mar 29, 2020

If you are employed or were recently employed (if you are an employer that has employees, please read this section too): Employment Insurance (EI) sickness benefits provide up to 15 weeks of income replacement and is available to eligible claimants w... More

HST

ITC on capital assets used for business Posted on Jul 18, 2021

Lots of HST questions came up from my clients recently. When you buy capital assets to be used for your business, how much ITCs (HST to be received) you could claim? For example: You bought a computer for $2,000 plus the GST/HST. You will use the com... More

HST on tips for service - yes or no? Posted on Oct 18, 2020

Here is an HST tip for TIP RECEIVERS. Cosmeticians, taxi drivers, hair dressers, restaurant servers etc . Ever wondered if you should collect HST on the tips your customers give you? The answer is ... NO. As long as the tip amount is optional to the ... More

HST – QUICK METHOD Posted on Sep 24, 2019

If you are registered for an HST and never heard of a QUICK METHOD you might be losing margin from your profit. HST Quick method is available to small businesses to calculate the net tax. It is very beneficial for a business that have income (sales) ... More

Do you want to estimate your HST? Posted on Mar 31, 2015

If you wonder what amount of HST you might owe to the taxman, you can you use our HST calculator to estimate that. Just follow the link http://www.pp-accounting.com/GstHst/indexor in the menu go to Calculators, then selectHST/GST Calculator.It is ver... More

Important DEADLINES

Tax deadline extended till May 5th Posted on Apr 28, 2015

This sounds weird... but due toa humanerror Canada Revenue Agency extended the electronic filing deadline by 5 more days. See morehttp://www.cbc.ca/news/politics/canada-revenue-agency-error-gives-5-more-days-to-file-taxes-1.3051754... More

Non-resident, international and cross-border

Non resident renting out Canadian real property Posted on Jun 28, 2021

When a non resident rents out a Canadian property - withholding tax needs to be paid to CRA monthly. By the 15th of the month, following the month, rental income is received. Non-resident needs to open a non-resident number with CRA. CRA will send Fo... More

Non resident - selling a property in Cdn Posted on Jan 27, 2020

If you are a non resident and is about to dispose a property in Canada - you must notify the government and obtain a Certificate of Compliance. If you are giving a notice of a completed disposition, you must notify the CRA by registered mail no later... More

Residency and Taxes Posted on Sep 24, 2019

How to determine in which country you are a RESIDENT and most importantly, where should you PAY TAXES? The most important thing to remember that your immigration status is not relevant. What determines to which country you owe taxes, is your RESIDENC... More

Personal Tax

2020 Home Office Expenses Posted on Dec 20, 2020

New temporary (only for 2020) simplified flat rate method: 1. Employee doesn’t need to provide backup receipts or calculate the size of the work space 2. No need to obtain a signed form from an employer 3. Expense amount that can claim as emplo... More

Child care benefits - summary Posted on Mar 20, 2020

Child Care and Benefits summary Eligibility: You must be primarily responsible for the care and upbringing of the child. You must be a resident of Canada for tax purposes. You or your spouse or common-law partner must be: a Canadian citizen a permane... More

Caregiver of infirm dependent > 18 Posted on Mar 10, 2020

If you are supporting financially an adult relative who has a disability, most likely you are eligible for a $7,140 tax credit. For example, you are paying for a nursing home where your mother or grandmother resides. Dependent’s income should b... More

Attendant care Posted on Mar 10, 2020

Attendant care for a disabled relative is a large expense. It is deductible. There are special rules when claiming the disability amount and attendant care as medical expenses. Options should be examined to make the most out of it for your family. 1.... More

Child care expenses Posted on Mar 10, 2020

If you pay one of your minor children to babysit their siblings, it is not an eligible child care expense. Specifically, when the childcare service are provided by an individual, the individual cannot be ONE of the following: 1. Child's father or... More

Foreign tuition fees - qualify for a credit Posted on Mar 08, 2020

Postsecondary studies outside Canada DOqualify for the tuition tax credit. Under the Income Tax Act, students can claim the tuition tax credit for postsecondary studies abroad if they are “in full-time attendance at a university outside Canada ... More

New 2019 Childcare tax credit (CARE) Posted on Feb 23, 2020

NEW CHILDCARE REFUNDABLE TAX CREDIT in ON. This one is on top of the childcare deduction that was available in previous years. If family income is under $150K, families can claim a % of their eligible childcare expenses as tax credit. Eligible childc... More

T1135 - specified foreign property Posted on Dec 03, 2019

T1135 form is a beast . Foreign property over $100,000 needs to be disclosed . If you are not sure what goes on the form, ASK. Guessing is expensive as penalties are high . And not knowing the rules won’t relieve you from trouble . For example ... More

Charitable donations Posted on Nov 05, 2019

I was asked last week to write a tax tip about the TAX SAVING of CHARITABLE CONTRIBUTIONS on a PERSONAL TAX return. Obviously, when a person contributes to a charity, it is the joy of giving that occupies him. However, there is definitely a favourabl... More

Deductible medical expenses Posted on Sep 30, 2019

CRA allows to deduct many different things as medical expenses. Some of the allowed expenses will pleasently surprise you.They are all orgnized in an alphabetical order on CRA website. Instead of me summaring it, here is a link to the official inform... More

Childcare expenses in a nutshell Posted on Mar 02, 2015

Childcare expenses could be claimed for children up to 16 years old Don’t miss out on childcare expenses deduction. If you have children up to 16 years of age and you paid someone to take care for your children, you can deduct those expenses on... More

Children fitness amount increased in 2014 to $1,000 from $500 Posted on Feb 26, 2015

If your child was enrolled in classes that required physical activities, you can deduct up to $1,000 of fees paid for each child (up to 16 years of age). Physical activity includes any class that requires muscular strength, muscular endurance, flexib... More

Family caregiver amount Posted on Feb 26, 2015

Do you live with an elderly parent and/or grandparent? Many people are not aware that they are eligible to claim the family caregiver amount on their tax return. It is additional $2,058 tax credit that you can get if you are eligible to claim the eli... More

Real Estate

Accounting Advice on How to Get a Mortgage Pre-Approval Posted on Jan 24, 2021

Courtesy of Nadia Chentsova, Real Estate Bay Realty Brokerage Getting a mortgage pre-approval is a great first step in the home buying process. Getting a mortgage pre-approval involves meeting up with a loan officer, so, they can go over your finance... More

Renting part of your principle residence – tax consequences? Posted on Sep 14, 2020

As most taxpayers know, when you sell your principle residence, the capital gain on the disposition is exempt from tax as it is protected by a principle residence exemption. But many people are asking if the gain is protected if they rent portion of ... More

Property and Family - misconception 2 Posted on Oct 09, 2019

When parents purchase a principle residence, should children be included as co-owners so that no further actions need to be taken upon inheritance? Below points may make this arrangement bad from a tax perspective: Kids who are co-owners usually own ... More

Investment in property - misconception 1 Posted on Oct 03, 2019

Often I hear clients get advised to purchase an investment property through a corporation, thinking that corporate tax rate is lower than personal. This is misleading. Assuming your corporation doesn't have 5 full time employees, the investment i... More

RENTING below fair market value Posted on Aug 20, 2019

When you rent space to relatives, often they pay you rent below fair market value or no rent at all. You DO NOT report this amount in your income, and you CANNOT claim rental expenses. This is considered a cost-sharing arrangement, so you CANNOT clai... More

Renting your home – election to avoid deemed disposition Posted on Aug 20, 2019

Renting your home – election to avoid deemed disposition When you start renting your personal use property, change in use occurs from principle property to rental. Generally, you lose the principle residence status that shelters the gain at the... More