Davidow & Nelson Blog

This Credit Is for You!: TEACHERS

The Eligible Educator School Supply Tax Credit, worth 15% on up to $1,000 of eligible supply expenses, has now become law. To mark the occasion, CRA has published a Question and Answer providing commentary on this new refundable tax credit available in 2016 and subsequent years. The credit is also referred to as the Teacher… Read more »

Taxable Transaction?: TRANSFERRING PROPERTY TO A FAMILY MEMBER

When transferring the legal title of a property to a family member, a disposition for tax purposes may not necessarily occur. The taxable event would occur when a “beneficial ownership” change happens. Usually, a beneficial change and legal change are one in the same, but not always. In a June 14, 2016 Technical Interpretation, CRA… Read more »

Corporate Class and Switch Funds: MUTUAL FUNDS

Mutual fund corporations have often been structured to permit changing funds within the group on a tax-free basis. These are commonly referred to as “switch funds” or “corporate-class funds”, and have become popular due to the ability to defer accumulated capital gains. Essentially, investors can switch funds without realizing dispositions and the related taxable capital… Read more »

Taxable?: BENEFITS PAID TO SHAREHOLDER EMPLOYEES

The CRA is aware that owner-managers have an incentive to receive benefits deductible by their corporation which are non-taxable to the owner. In essence, this can be perceived as a method to extract profits out of a corporation without paying tax on it. As such, CRA is particularly vigilant to ensure that these benefits comply… Read more »

How Do I Compare?: CANADIAN INDUSTRY STATISTICS

The Government of Canada provides analysis and detailed information on economic indicators using the most recent data from Statistics Canada on the website, www.ic.gc.ca/eic/site/cis-sic.nsf/eng/home. This website can help small to medium sized businesses understand the dynamics of their industries. Users can focus on a single industry over time or compare one industry against another. Data… Read more »

TAX TICKLERS… some quick points to consider…

• Timing and amounts of various payments and benefits, such as the Canada Child Benefit, can be obtained by calling the CRA’s TIPS line at 1-800-267-6999. • In the summer of 2016, CRA commenced a project to examine taxpayers holding expensive properties in Vancouver where only low amounts of income were reported. The goal of… Read more »

Related Employee: INSURABLE EARNINGS

Consider the situation where Persons A and B are a married couple and own 60% and 40% respectively of Corporation A (A Co.). They are also both employed by A Co. and, therefore, receive a salary. Will the salaries that they receive be considered insurable for Employment Insurance (EI) purposes? That is, would EI withholdings… Read more »

2016 REMUNERATION

Higher levels of personal income are taxed at higher personal rates, while lower levels are taxed at lower rates. Therefore, individuals may want to, where possible, adjust income out of high income years and into low income years. This is particularly useful if the taxpayer is expecting a large fluctuation in income, due to, for… Read more »

Year End Tax Planning

December 31, 2016 is fast approaching… see below for a list of tax planning considerations. Please contact us for further details or to discuss whether these may apply to your tax situation. SOME 2016 YEAR-END TAX PLANNING TIPS INCLUDE: 1) Certain expenditures made by individuals by December 31, 2016 will be eligible for 2016 tax… Read more »

My Account Update: CRA ONLINE SERVICES

In early 2016, CRA updated the “My Account” online service (intended for the individual taxpayer’s exclusive use). This service allows individuals to: • view CRA correspondence, assessments, and balances; • view some income slips for the current and previous years (T4, T5, T3, etc.); • view certain personal limits like RRSP and TFSA contribution room… Read more »