J.A.I.K.S. BLOG
Welcome to J.A.I.K.S. Blog, a place where we will provide you with a variety of resources on accounting, taxation and other related subjects suited for both individuals and/or their businesses.
We hope you can find the answers to your questions and/or curiosities, and always know we are here to help if you need more.
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Disclaimer:
The content provided in this blog is for general informational purposes only and is not intended as professional accounting, tax, or financial advice. While efforts are made to ensure the accuracy and timeliness of the content, errors or omissions may occur. The content does not constitute a client-advisor relationship. Readers should consult with a Chartered Professional Accountants or other financial professional for advice tailored to their specific needs. We are not liable for any actions one might take based on the information provided in this blog.
The Canada Small Business Financing Program
The Canada Small Business Financing Program (CSBFP) is a federal initiative that helps small businesses obtain financing to start, expand, modernize, or improve their operations. Administered by Innovation, Science and Economic Development Canada (ISED), the program encourages lending institutions to provide loans to small businesses by sharing the risk with the government.
What Happens to My TFSA When I Die?
When a Tax-Free Savings Account (TFSA) holder passes away, the handling of the account depends on whether the account has a named successor holder or a designated beneficiary. Here’s a breakdown of the main scenarios:
Tracking Loans to or From Shareholders
When advances or loans are made to shareholders this should be recorded in a general ledger account set up for this purpose. If a loan is made for which the interest would be tax deductible for the shareholder, it is important to track this loan separately from other advances or loans.
How Would I Reduce or Avoid the Capital Gains Tax?
In Canada, capital gains are taxed when you sell an investment or property for more than its purchase price. However, there are several strategies to reduce or avoid capital gains tax. Here’s how you can manage it:
Should I be a Personal Services Business (PSB)?
In Canada, a Personal Services Business (PSB) is a type of business that the Canada Revenue Agency (CRA) designates under certain conditions. The rules governing PSBs are stringent, and the tax treatment of a PSB is less favorable compared to other types of corporations. Here’s an overview of what constitutes a PSB and its implications:
The Sole Proprietor and Incorporation
Deciding whether a sole proprietor should incorporate in Canada depends on various factors, including tax considerations, liability protection, business growth plans, and administrative responsibilities. Here are some key points to help make that decision:
The Balance Sheet for All Businesses
An up-to-date business balance sheet is a critical financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists the company's assets, liabilities, and shareholders' equity. Here are several scenarios where having an up-to-date balance sheet is particularly beneficial:
Balance Sheets are not just for Corporations, but are equally important for Sole Proprietors for the following reasons:
What is the best accounting procedure for a small business?
For small businesses in Canada, simplicity and efficiency are key when choosing an accounting procedure.
Tax Traps: Home Office Expenses
A claim for home office expenses is common, but there are changes this year which are fraught with audit risk. The simplified claim method in place for 2020, 2021 and 2022 tax filing years has ended and so the "detailed method" must be used.
Could Selling Goods Online be Taxable Income?
In Canada, income from selling goods on eBay, or similar platforms such as Kijiji, Etsy, or Amazon, can be taxable, depending on the nature and frequency of the sales. Here are the key factors to consider:
Canadian Income Tax Installments in 2024
Tax instalments are payments you make throughout the year to cover the taxes you normally pay in one lump sum on April 30th of the following year. You pay these instalments during the year while you are earning the income, similar to how an employer deducts tax directly from each pay period.
WHAT CANADA REVENUE SAYS ABOUT WHICH BUSINESS ENTERTAINMENT EXPENSES ARE DEDUCTIBLE AND WHICH ARE NOT
The Canada Revenue Agency (CRA) allows businesses to deduct certain entertainment expenses from their taxable income. However, there are specific rules and limitations on what can be deducted.
Some exceptions and special rules may apply, so for the most accurate and up-to-date information, contact our office for reliable guidance on what you can and cannot write off.
Here is an overview:
Why Usa a Certified Professional Bookkeeper (CPB)?
Opting for a Certified Professional Bookkeeper (CPB) instead of managing bookkeeping tasks independently offers several advantages:
Are There Tax Benefits for Couples in Canada?
Are There Tax Benefits for Couples in Canada?
Curious about the tax advantages that come with getting married or living in a common law relationship? In Canada, there are indeed significant tax perks for couples. The following will begin to outline them.
Filing Your Personal Tax Return Benefits - Part 3
Filing your personal Canadian income tax return can also help you qualify for various government benefits. Here are some examples:
Filing Your Personal Tax Return Benefits - Part 2
here are five more benefits of filing your personal Canadian income tax return:
Filing Your Personal Tax Return Benefits - Part 1
Filing your personal Canadian income tax return offers several benefits, including:
File Tax Returns by April 30th to Avoid Penalties
The deadline for filing 2023 tax returns and payments is Tuesday, April 30, 2024. Typically, personal income tax returns, excluding those with self-employment income, are due by April 30th, along with any outstanding payments. Late filings or payments may incur penalties and interest charges.
New T3 Requirements for Joint Accounts
Should you have established an in-trust-for (ITF) account for your minor child or hold specific assets jointly, such as a joint bank account or being added to the title on a home, you, and/or they, may now fall under the purview of recently implemented trust reporting regulations, effective for taxation years ending after December 30th. These regulations might necessitate the filing of a T3 Trust Income Tax and Information Return within 90 days of the year-end, irrespective of whether there's any income or activity to report. Given that trusts typically have a calendar year-end, the first tax return for 2023 would be due by April 2, 2024 (as March 30 falls on a Saturday, and April 1 is Easter Monday). Perhaps you have heard about this new trust reporting and do not know if it applies to you, please feel free to contact us. More information is below regarding the new trust reporting.
Choosing Between a TFSA or RRSP For Savings
The choice between a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP) depends on various factors, including your financial goals, current income, and retirement plans. Here are some key considerations for both:
Taxes and the College Student in Canada
How to maximize tax refunds as a college student in Canada
Maximizing your tax refunds as a college student in Canada involves understanding the tax credits and deductions available to you and ensuring you claim them correctly on your tax return. Here are some tips to help you maximize your tax refunds:
2024 Tax Changes to Expect in Canada
We have compiled a list of Tax Changes and adjustments that are anticipated to affect most Canadians in 2024.
The details here offer estimates for elevated payroll taxes, mandatory contributions to the Canada Pension Plan and Employment Insurance. It also covers increases in carbon and alcohol taxes plus the effect of the possible Digital Services Tax.
Prepare for Income Tax at Year-End
As tax laws and regulations change, it's crucial to consult with a tax professional or check the latest resources for the most up-to-date information.
Here are some common steps individuals may take at the end of the tax year:
What Do Christmas Scams Look Like?
During the holiday season, scammers often take advantage of the festive atmosphere and people's increased online activities. Christmas scams can take various forms, but some common tactics include:
Avoiding Online Scams!
Avoiding online scams in Canada (or anywhere else) involves being vigilant, informed, and taking proactive measures to protect your personal and financial information. Here are some tips to help you avoid online scams:
Record-Keeping Best Practices for Small Business
Effective record-keeping is crucial for the success of any small business. Proper records not only help you track your financial performance but also ensure compliance with tax regulations and provide valuable insights for making informed business decisions. Here are some best practices for record-keeping in a small business:
How Can I Minimize Taxes of a Deceased Taxpayer?
Minimizing taxes for a deceased taxpayer's estate in Canada involves careful planning and following specific strategies. The goal is to reduce the tax liability of the estate and maximize the assets passed on to beneficiaries. Here are some steps to consider:
Gifting Capital Property is a Disposition for Tax Purposes
In Canada, gifting a capital property is considered a disposition for tax purposes. When you gift a capital property to someone, it is treated as if you have sold the property at its fair market value (FMV) at the time of the gift. This means that you may be subject to capital gains tax on any accrued gains in the property's value up to the date of the gift, even though you didn't receive any cash in return.
Gifts from an Employer May be a Taxable Benefit
In Canada, gifts from an employer can be considered taxable benefits in certain circumstances. The taxation of employer-provided gifts depends on several factors, including the nature and value of the gift, the frequency of such gifts, and the specific rules set by the Canada Revenue Agency (CRA).
In Canada When Are Gifts or Inheritances Taxable?
In Canada, gifts and inheritances are generally not taxable to the recipient. However, there are some important nuances and exceptions to consider:
How Does My Bookkeeper Work with My Accountant?
As we spoke about in our last post, as your bookkeeper, we handle the day-to-day financial transactions and record-keeping. Your accountant takes a more analytical and strategic role in interpreting the data, providing financial advice, and ensuring compliance with financial regulations.
How Can a Bookkeeper Help Your Company?
Bookkeepers also play an important role in helping companies manage their financial records, ensuring accurate and up-to-date financial information, and providing valuable insights that can drive strategic decision-making when combined with your accountant. Some of the ways bookkeepers contribute are:
The Disability Tax Credit & Low-Income Canadians
For low-income individuals in Canada, claiming the Disability Tax Credit (DTC) can provide additional financial benefits through refundable tax credits and other programs. Here are some key points to consider:
Steps for a Retroactive Disability Tax Credit Claim
If you believe that you were eligible for the Disability Tax Credit (DTC) in previous years but did not claim it, you may be able to make a retroactive claim. Retroactive claims allow you to request adjustments to previous tax returns and potentially receive refunds for the missed credits.
Canadians and the Disability Tax Credit (DTC)
As Canadians advance in age, we are pleased to offer a 3 part series on the Disability Tax Credit (DTC) in Canada.
To claim the Disability Tax Credit (DTC) in Canada, you must meet the eligibility criteria and complete the necessary steps. Here's a general overview of the process:
Rebates for Fuel-Efficient Vehicles
When considering a fuel-efficient vehicle such as a hybrid, or an alternative fuel model you should know that the Canadian Government, as well as some provinces, provide rebates.
First Home Savings Account is a Smart Move
First Home Savings Accounts, or FHSAs combine the concept of Tax-Free Savings Accounts and Registered Retirement Savings Plans. For people aged 18 and older, like an RRSP, contributors receive a tax deduction on contributions and TFSA-like tax-free withdrawals when using the savings to buy a home. Further, any investment gains earned in the account are tax-sheltered. Unlike the Home Buyers’ Plan (HBP), the FHSA does not need to be repaid.
Tips to Save on Your Taxes in 2023
As the 2022 tax year is behind us, it is a good idea to start early and plan for 2023. Here are some suggestions on how you can save money on your Canadian income tax for this year:
You Still Must File Your Income Tax on Time!
Even though there is currently a strike affecting the CRA, filing your Canadian income tax on time is essential to avoid penalties and interest charges. The strike has not changed the May 1st due date for filing your taxes.
CRA Text & Mail Scams to be Aware Of
The CRA will not send text messages, or instant messages (Facebook Messenger, WhatsApp) to start a conversation with you under any circumstances.
If you receive a text or instant message purporting to be from the CRA, prompting you to click on a link or requesting information, you can safely delete it.
CRA Email Scams in Tax Season
The Canada Revenue Agency (CRA) might email you:
- to let you know that a new message is available on your CRA website account.
- to send you a link for a webpage, form, or publication that you requested during a call or meeting with a CRA representative.
- to let you know about tax credits and benefits for individuals or online services such as My account.
Phone Scams at Tax Time
Numbers from the Canadian Anti-Fraud Centre show that direct calls remain the number one means of solicitation for fraudsters.
Although the CRA may contact you via phone to review your income tax and benefit return, it's important to note that legitimate government employees will always identify themselves with their name, employee number, and phone number.
How to Avoid Tax Time Scams About the CRA
It’s tax time again. If you are like others, you may feel overwhelmed by the process. Sadly, scammers are aware of this and take advantage of people's fears by trying to steal money and gain unauthorized access to personal data and financial details. The Canada Revenue Agency has seen a dramatic increase in the sophistication of scam attempts, so it is essential that you learn the difference between legitimate communication and a scam from the CRA. The best way to protect yourself from potential fraud is by learning the signs.
Investment fees on your tax return can be deducted
When preparing your taxes, a deduction that is often overlooked is carrying charges and interest expenses. These charges are costs you incur to earn income from an investment, but only expenses for non-registered accounts will qualify.
Manage Your Cash Flow with These 5 Steps
A cash flow projection can act like an early warning system for any period. A leading cause of business failure is a lack of cash flow management, but by taking some simple steps in managing it, you will find it can improve your business outcome.
Shareholder Loans in a Corporation
Shareholder loans refer to loans made by shareholders of a corporation to the corporation. The tax implications of such loans will vary depending on the jurisdiction, but usually, they are not considered taxable income to the shareholder.
An RRSP as a Tax-Planning Tool - Good Idea
An RRSP is more than simply an account for retirement savings. Yes, it’s a must-have when saving for retirement, but the Registered Retirement Savings Plan (RRSP) is an effective tax-planning tool.
In Canada, are Medical Expenses Tax Deductible?
We thought it would be a good time to discuss the medical expense deduction on your tax return, as the end of the year is fast approaching.
Deducting Vehicle Expenses when Self-Employed
If you are self-employed, you may claim automotive expenses while conducting business. If you use your car for personal and business travel, only expenses for business can be deducted. If you use it exclusively for business, you can expense all costs.