At this time of year many income tax returns have just been filed, and seniors will have found out how much of their Old Age Security (OAS) they got to keep. Old Age Security payments are “clawed back” at a rate of 15% when net income exceeds a certain threshold ($67,668 in 2011). This means […]
The term “personal services business” is defined in the Income Tax Act. In general terms, a personal services business exists where the relationship between a purchaser of services and an individual would be one of employment but for the existence of a corporation. In essence, it is when an executive incorporates and provides services to his or her (former) employer through a […]
The Canadian income tax system relies on selfreporting, which means the system relies on taxpayers to disclose accurate complete information and comply with the rules. While the Canada Revenue Agency (CRA) has programs in place to catch nonreporters and it reserves the right to audit what a taxpayer reports, it simply cannot audit everyone. When the […]
Business investment losses are a subset of capital losses, but with special income tax treatment that allows for a faster recovery of the resulting tax savings. Both individual taxpayers and corporations may realize a business investment loss, which can arise from the actual or deemed disposition of certain capital properties. A business investment loss can […]
Kiddie tax was introduced in 2000 in order to neutralize an increasing trend towards splitting dividend income with minor children. The March 2011 Federal Budget expanded these rules to include certain capital gains realized by minor children with respect to the disposition of shares of private companies to non-arm’s-length persons. Kiddie tax was designed to […]
Federal and provincial governments encourage taxpayers to save for their retirement by granting tax relief for savings contributed to and held in a Registered Retirement Savings Plan (”RRSP”). Contributions are tax-deductible and the income earned is tax deferred. And yet, as attractive as the tax incentives may be, relatively few taxpayers avail themselves fully of […]
Ever wonder how our innate human tendencies are involved with our investment process? If you look at them closely you will recognize how we behaved over our history really has a lot to do with how we invest. I didn’t say that this was necessarily a good thing. Social scientists and researchers that study the […]
Many times, a recommendation is made for life insurance to be owned within a corporate structure. If the company names itself as the beneficiary under the contract, the premium payments generally do not give rise to any taxable benefit to the shareholder(s). The primary advantage of corporate ownership is that it usually takes less pre-tax […]
Contributions and benefits under government pension plans are adjusted periodically to reflect increases in the Consumer Price Index or the average Canadian wage. The new amounts, commencing January 1, 2012, are shown in the table below. Each benefit is subject to income tax when received, with the exception of the Guaranteed Income Supplement and the […]
Statistics Canada is constantly gathering and disseminating a wide variety of information about the Canadian population. This information can be very useful to businesses as they attempt to identify current market trends or predict new market segments. A recently issued survey from Statistics Canada deals with the current state of health of Canadians and how […]