J.A.I.K.S. BLOG

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.

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.

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.

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.

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.

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.  

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.

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.

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.  

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.

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:

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.

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:

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.

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:

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.

In Canada, gifts and inheritances are generally not taxable to the recipient. However, there are some important nuances and exceptions to consider:

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, 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.

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:

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:

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:

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.

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:

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:

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.

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.

Filing your personal Canadian income tax return offers several benefits, including:

here are five more benefits of filing your personal Canadian income tax return:

Filing your personal Canadian income tax return can also help you qualify for various government benefits. Here are some examples:

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.

Opting for a Certified Professional Bookkeeper (CPB) instead of managing bookkeeping tasks independently offers several advantages:

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: 

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.

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:

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.

For small businesses in Canada, simplicity and efficiency are key when choosing an accounting procedure.

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:

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:

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:

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.

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:

The Canada Revenue Agency (CRA) announced that bare trusts will not be required to adhere to updated tax-reporting rules for the 2024 tax year.

Now that you understand how a RRIF works, you need to take the Tax Implications of RRIF Withdrawals into account to maximize your income. Not doing so could lead to lower returns in your pocket.