What can the CRA do if you do not pay the amounts held in trust? If the deemed trust amounts are not paid in time, the CRA can take several actions including garnishing bank accounts, accounts receivable, and any other income sources, seizing and selling assets, and using other legal actions to collect amounts owing. What happens if your business has a deemed trust debt with the CRA? If your business have a deemed trust debt owing to the CRA, the amount of the debt becomes secured to the CRA over all your assets, regardless of any security interest you may...
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What are deemed trusts? Deemed trust amounts include amounts that an employer deducts and withholds from the wages of the employees and GST/HST amounts that are collected by businesses from customers.   These amounts are important sources of revenue for the government and are collected by businesses as agents of the government.  Parliament enacted powerful tools to collect these amounts and protect these from being diverted to other creditors. As an employer, you hold in trust amounts that are deducted from your employee’s wages for income tax, Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums.  Payroll deductions, CPP contributions...
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Here are some important reminders for the self-employed individuals. ·         You have to report your income from any business you run yourself or with a partner.  Business income that must be reported includes money you earn from a profession, trade, manufacture or undertaking of any kind you carry on for profit (and there is evidence to support that intention).  If you fail to report all your income, CRA may subject you to a penalty of 10% of the amount of income you did not report. ·         It is important to keep complete and detailed records.  Your records must be detailed enough...
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A recent article in the Financial Post, “How Trump’s tax-cut plan stacks up against the Canadian tax system,” by Jamie Golombek takes a comparative look at the new and proposed U.S. tax changes and the current Canadian tax system for individuals. It is a very interesting and informative read for both US and Canadian taxpayers. What tax system do you think comes out better for the individual taxpayer? Here is a quick summary of the comparisons that the mentioned article features. Tax rates:  Trump’s tax plan includes a proposal to reduce the US federal income rate brackets from the current seven...
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