Tax Services

Tax deductible expenses in Canada (aka tax write-offs) include a large number of expenses approved by the Canada Revenue Agency (CRA), all of which can significantly help reduce your taxable income. With careful tax planning individuals and business owners in Canada can decrease the tax burden and put themselves in a lower tax bracket. Some of the main tax deductible expenses include 1) business start-up costs, 2) home office expenses, 3) vehicle expenses, 4) advertising costs, 5) interest and bank charges, 6) insurance expenses, 7) legal fees, 8) business tax, licenses and dues, etc.

Contact us to learn what tax write-offs you and your business qualify for and how we can help minimize your tax burden.

There are two key advantages of incorporating a business: 1) limited liability and 2) income tax deferral. In general, if your business is earning over $60,000 in net earnings and you anticipate it will continue to grow, you should consider incorporating a business. The savings from tax deferral, dividend splitting and favorable tax rates will be greater than the additional legal and accounting costs.

You may benefit from the small business deduction (SBD) which lowers the federal tax rate to 9% on its first $500,000 (compared up to 53.5% marginal tax rate if you’re not incorporated).

Contact us to learn what is the optimal solution for your specific situation.

Annual returns are different from tax returns. Annual returns include information about a business and its shareholders, while tax returns provide information about the company’s finances.

The annual return in Canada represents a legal document (different from tax returns) that includes information about the registered office address, mailing address, business address, directors, the officers and in some jurisdictions the shareholders of a company. Provincial and federal governments require companies registered under them to provide up-to-date business information on an annual basis. Failure to file the annual returns can result in the dissolution of a company by the Corporations Canada. Although annual returns should be filed each year, there is a 2 year grace period.

A professional corporation in Canada refers to a corporation owned and operated by one or more members of the same profession that provide professional services regulated by professional bodies, such as physicians, dentists, veterinarians, lawyers, accountants, engineers, and architects. Incorporating a professional corporation provides many tax advantages which include tax deferral, potential income splitting and favourable tax rates on dividends.

Contact us to learn if a professional corporation is right for your practice.

Tax on split income (TOSI) is a set of tax rules designed to limit the tax benefit of income splitting through private corporations. Income splitting is a tax strategy of moving income from a family member in a higher tax bracket to a family member in a lower tax bracket in order to reduce the overall family tax burden. TOSI (effective as of January 2018) requires adults (over the age of 17) to be engaged in the business on a regular, continuous and substantial basis (at least an average of 20 hours per week) to be eligible for income splitting tax benefits, among other criteria.

Tax planning is a service provided by a CPA firm that includes effectively managing a taxpayer’s financial situation to minimize the tax burden at the federal and provincial level for both the near and long-term. Short term tax planning involves financial planning and execution at the end of the income year to reduce taxable income, while long-term tax planning typically includes ongoing analysis, planning and actions aimed at reducing the tax liabilities in line with the client’s long-term goals. Long-term planning is done at the beginning of the fiscal year to be followed around the year.

A compensation strategy is a plan on how a business determines pay and benefits for employees in a way to align long-term business goals with compensation resources. The objective is to find the right balance to increase a business’s ability to retain and attract top talent with competitive rewards. It is crucial to consider the company’s finances when creating a compensation strategy, which is why for small and medium businesses a good solution is to consult a virtual CFO or a business advisory firm.