1. What is the Home Renovation Tax Credit (HRTC)? The proposed HRTC is a non-refundable tax credit for eligible expenses incurred for work performed or goods acquired in respect of an eligible dwelling. 2. What is meant by eligible dwelling? An eligible dwelling of an individual is a housing unit located in Canada. All the […]
Category Archives: Featured Article
TFSA Account
Ottawa, October 16, 2009 The Honourable Jim Flaherty, Minister of Finance, today proposed amendments to the Income Tax Act to strengthen the rules applicable to Tax-Free Savings Accounts (TFSAs). The TFSA was introduced in Budget 2008. Since January 1, 2009, Canadian residents who are 18 years of age or older are eligible to contribute up […]
Deducting Your Home Office Expenses
Every home-based entrepreneur can and should deduct a portion of home expenses. In order to be eligible to do that, you must meet one of the following criteria: Your home must be your principal place of business, OR You use a designated area in your home for the sole purpose of earning business income AND […]
List of Deductions Available to Business Owners
• Mortgage interest or rent (partial or in whole) • Gas, electric, water and sewer • Cleaning crews to clean and vacuum offices and empty the trash • Computers, copiers, fax machines and telephones, other heavy equipment (amortization) • Small tools • Advertising • Paper, pens and postage • Bank fees on business accounts • […]
I Have Been Selected for Audit – Now What?
Auditing allows the Canadian Revenue Agency (“CRA”) to monitor and inspect GST/HST and income tax returns, customs import documents, and payroll records. CRA has wide powers of inquiry and investigation under the Canadian Income Tax Act, including the power to demand records and information. A person who refuses to comply with the requirement to provide […]
9 Expensive Mistakes Canadians Make When Filing Tax Returns
#1 Doing it yourself when it comes to taxes Income Tax is a Game, and the Rules are complex. There is a lot of money at stake when it comes to tax matters. Therefore it is always a good idea to seek professional tax advice. Remember, a good accountant is an asset, not an expense. […]
Business Start Criteria
In order for any amounts to be deductible on tax return, the taxpayer must “carry on business” in the fiscal period in which the expense was incurred. So when does the business start? Here are some guidelines from CRA’s Interpretation Bulletin IT 364: – A business starts whenever some significant activity that forms a regular part of […]
Do You Really Have a Business?
You might find it surprising but the CRA, the courts and taxpayers have been arguing a lot about what would seem to be a pretty straightforward question. The reason is simple: the Canada Revenue Agency does not want to allow a taxpayer to deduct losses year after year in a questionable enterprise. In the past, […]
Operating and Capital Expenses
Operating expenses are expenditures that are necessary for a company to produce the goods and services that bring in the revenues. These items are “used-up” and are usually 100% deductible in the fiscal year they occurred, unless there are specific restrictions in the Income Tax Act. Most popular among them are supplies, advertising and promotions, salaries […]
Record Keeping
First of all, remember that any credit amount showing up on your bank statement is considered your income unless proven otherwise. That’s why it is important to periodically review your bank statements and make notes wherever the incoming funds do not constitute your business revenue. It could be tax or GST/HST refunds from the Government, […]