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A Notice of Ways and Means Motion was published last October 24, 2017. Here are the highlights with regards to the tax changes for private corporations: Revision of Gross Up rate for non-eligible dividends: from 17% for 2017 to 16% for 2018 and 15% for 2019 and later years; Revision of the tax credit for non-eligible dividends: from 21-29ths of the gross-up in 2018 to 8/11ths in 2018 and 9-13ths in 2019 and later years; Increase the small business deduction: from 17.5% in 2017 to 18% for 2018 and to 19% for the 2019 and subsequent taxation years; Move forward on...
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As mentioned in part 1, before claiming the Small Business Deduction, you must make sure you are eligible to do so.  So who is eligible? You must be a Canadian-controlled private corporation carrying on a business in Canada throughout the year and meet at least one of the following conditions: -      You primarily earn active business income rather than income from a specified investment business or a personal services business; -      You are a specified investment business or personal services business that employs more than five full-time employees throughout the year; -      You are a specified investment business and you have...
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If you run a small business in Canada, you may be eligible for the small business deduction.  Eligible businesses can claim the 17.5% small business deduction for the first $500,000 of income, with some limitations.  As mentioned, the Small Business Deduction or SBD is 17.5% (17% before 2016) of whichever of the following amounts is less: -      The income from active business carried on in Canada; -      The taxable income; -      The business limit; or -      The reduced business limit. For tax years ending after 2016, the SBD will remain at the 2016 level of 17.5%, resulting in a small business...
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Vehicle expenses are typical deductions for most businesses as most business owners require a vehicle to travel to and from offices, pick-up supplies and meet with clients.  Vehicle expenses can be reported in 2 ways: 1.    By mileage 2.    By actual cost If you own the vehicle personally, you will need to keep a mileage log to determine the amount of kilometers you travelled for business. This way the company can reimburse you the prescribed rate per kilometer.  Note that the prescribed rates change so it is always good to check the current rates for reimbursement of mileage.  If the company...
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