Any vehicle with a purchase cost of over $30,000 can be classed as a luxury vehicle (a 10.1 asset). This classification restricts the amount of depreciation that can be deducted from income which reduces your corporate expenses and increases your corporate tax. It also limits the amount of Goods and Service Tax (GST) that can be recovered. The determining factor is whether the vehicle is a passenger vehicle or a motor vehicle by Canada Revenue Agency’s definitions.
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If your corporation has had a profitable year and your corporate year end is July or later in the calendar year, you may wish to declare a management bonus to defer some of the taxes to the next year, or to reduce income to a level of corporate tax you are comfortable with. The small business tax rate limit, for example.
The year end date is important as it identifies the end of a corporation’s business year and can have an impact on tax planning. It has to be determined for a corporation’s first tax filing and is typically the last day of a month.
So what year end date should you choose?
If your company is a Canadian taxpayer, Canadian corporate tax is calculated by allocating taxable income between the provinces in which your company has a permanent establishment presence.
The company is considered to have a permanent establishment presence in any Canadian province where any of the following conditions are met:
- A fixed place of business such as an office, branch, warehouse, workshop or factory in the province.
- An agent or an employee present in the province.
- The company owns land in the province.
- There is substantial use of machinery or equipment by the company in the province.
There are many options for issuing payments to vendors; however, the fees involved need to be taken into consideration as over the course of a year it can impact your company’s bottom line.
Are the aggressive collection calls you have been getting from the Canada Revenue Agency (CRA) real? The short answer is NO. The calls are a scam. Please read on.
Shares in a corporation can be participating or non-participating, among other features. Participating shares are eligible to “participate” in the equity growth of the company and be permitted to receive dividends. Non-participating shares do not benefit from the equity growth of the company. This can potentially impact the valuation of shares.
Is This Canadian Baby An American Tax Cheat?
A Canadian baby is learning about taxes, banking and activism at a tender age. The eight month old girl received a “Dear Valued Customer” letter from her Canadian bank when she was six months old advising her that her account information may be provided to Canada Revenue Agency to pass on to IRS. The wee “Valued Customer” was directed to complete, sign and mail forms to the bank.
Baby Elle (not her real name) and her Canadian parents were Read more
The T1134 and T1135 are a sample of Canadian foreign information returns like the U.S. 8938, 5471 or 8865.
A number of Canadians are investing in the U.S. real estate market with a U.S. limited partnership whose limited partners are solely Canadian residents and the general partner is a U.S. C corporation whose shareholders are also Canadian residents.
For those who want limited liability protection, this type of Read more
FINCEN114 due June 30th for the 2015 taxation year, reporting beneficial interest or signature authority in non-U.S. financial accounts where the annual aggregate highest balance is greater than $10K U.S., may have to be filed by Canadian taxpayers.
Those who meet the substantial presence test for residency in the U.S., regardless of a claim under Article IV of the Canada/U.S. tax Read more
U.S. citizens (or even green cardholders) resident in Canada who are contributors (or a joint contributor) to their children’s RESP (“registered educational savings plan”) may have U.S. reporting issues.
Should the RESP be regarded as a foreign trust by the IRS (as they do with RRSPs), then the RESP would be regarded as foreign grantor trust. In this regard the annual income realized in the RES
P Read more
Last fall the IRS announced the increase in the expensing limit with respect to the safe harbor limit contained in Regulation 1.263(a)-1(f) from $500 to $2,500 per substantiated invoice. The increase commences in 2016. The election basically allows taxpayers without an AFS (applicable financial statement) audited by a CPA, to expense items that would otherwise be required to be capitalized and depreciated. There is no change to the $5,000 limit where an AFS is available. Read more