On February 27, 2018, the Federal Government announced details of Budget 2018. Here are the Business Income Tax Measures proposed in this Budget, starting with the business limit reduction on passive investment income. Small Business Deduction - Business Limit Reduction on Passive Investment Income: Canadian controlled private corporations or CCPCs can avail of the lower tax rate on the first $500,000 (which is the federal business limit) of active business income. When retained earnings taxed at the small business rate are used to invest passively rather than in the active business, significant tax deferral advantages can be realized. Budget 2018 proposes...
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Last January 26th, 2018, the Department of Finance ended its public consultations for Budget 2018. During the public consultations, all Canadians were invited to provide their ideas and suggestions on how the Government can go about setting up the budget for the benefit of all Canadian families and individuals. This annual pre-budget consultations, according to the Department of Finance, reached more than 1.5 million Canadians and nearly 38,000 submissions and ideas were received. On February 13th, the Department of Finance, through Minister Morneau, announced in the House of Commons that the Government will table its federal budget on February 27, 2018.In...
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Here are the Federal Tax Rates for 2018: - 15% on the first $46,605 of taxable income,- 20.5% on the next $46,603 of taxable income (on the portion of taxable income over $46,605 up to $93,208),- 26% on the next $51,281 of taxable income (on the portion of taxable income over $93,208 up to $144,489),- 29% on the next $61,353 of taxable income (on the portion of taxable income over $144,489 up to $205,842),- 33% of taxable income over $205,842. You can also find these rates on Schedule 1 of your income tax return. You will find the provincial or territorial...
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In early November of 2017, the Finance Minister announced the launch of the Government of Canada’s consultations for Budget 2018. The budget consultations allowed Canadians to provide their ideas and suggestions on how the Government can go about setting up Budget 2018 to benefit all Canadian families, communities and the country. There are a number of ways that Canadians who want to share their ideas with the Government which includes in-person and digital events with the Minister of Finance and Parliamentary Secretary Joel Lightbound, events with other Parliamentarians, and online through the budget 2018 website (www.budget.gc.ca/pbc18).In a statement published on January...
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There are a number of changes that have taken place when we rang in the new year a few days ago in terms of taxes, laws and wages. Here are some of the most significant changes:- Starting 2018, the small business tax rate dropped from 10.5% to 10%.- EI premiums have slightly increased by about $6 in new costs for the average worker and $13 per employee for the average employer.- 2018 marks the return of the sponsorship program after closing down due to backlogs.- Ontario's minimum hourly wage increase took effect last January 1, 2018 from $11.60 to $14.- Alberta's...
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CRA recently announced changes to the Voluntary Disclosures Program (VDP) to tighten the eligibility criteria to access the program. Starting March 1, 2018, a limited program will apply to taxpayers who have intentionally avoided their tax obligations. The CRA will determine if a taxpayer has intentionally avoided their tax obligations by considering a number of factors such as whether efforts were made to avoid detection through use of offshore vehicles or other means, total dollar amounts involved, number of years of non-compliance, etc. This limited program will also cover corporations with gross revenue in excess of $250 million who will apply...
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The Department of Finance recently announced the income tax deduction limits and expense benefit rates applicable in 2018 when using an automobile for business purposes. Most limits from 2017 will remain in effect in 2018. These limits include: 1. The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus federal and provincial or territorial sales taxes) for purchases after 2017. 2. The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2017. 3. The limit on...
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On December 14th, 2017, the Department of Finance announced that the remaining tax measures from Budget 2017, Bill C-63, received Royal Assent. These are some of the income tax measures included in Bill C-63. • Closing loopholes surrounding the capital gains exemption on the sale of a principal residence;• Providing additional authority for certain tax purposes to nurse practitioners;• Ensuring that qualifying farmers and fishers selling to agricultural and fisheries cooperatives are eligible for the small business deduction;• Eliminating the use of billed-basis accounting by designated professionals;• Eliminating the ability for small oil and gas companies to reclassify up to $1...
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The Department of Finance has published details of its simplified measures to address income sprinkling. These proposed measures will take effect in 2018 and subsequent tax years. The simplified measures will clarify the process of determining whether a family member is significantly involved in a business, and is therefore excluded from potentially being taxed at the highest marginal rate. The proposed measures include tests to automatically exclude individual members of a business owner’s family who fall into any of the following categories: • The business owner’s spouse, provided that the owner meaningfully contributed to the business and is aged 65 or...
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In another twist in the ongoing disability tax credit scenario, Diabetes research and advocacy groups claim to have obtained an internal CRA memo essentially ordering CRA agents to deny the Disability Tax Credit to diabetics. According to the Diabetes Canada and Juvenile Diabetes Research Foundation, they obtained an internal CRA memo dated May 2, 2017 that says, “Unless there are exceptional circumstances, adults with diabetes can generally manage their daily insulin therapy without taking 14 hours per week.” With this statement, Diabetes Canada says CRA will most likely deny the disability tax credit to most adults with Type 1 diabetes even...
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