Small business accounting involves more than just maintaining books for tax preparation purposes. It requires practicing all aspects of accounting for tracking, recording, and analyzing a business’s financial transactions. However, as an owner, tracking every expense, deposits that your business incurs can be quite challenging and inevitably may commit significant errors and mistakes.

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If you are a performing artist such as an actor or a musician, the Canada Revenue Agency has special rules that pertain to you.  This article covers all the details and specifies the tax write-offs or expenses that you may be able to deduct from your income.   Employee vs. Self-employed The first thing that you need to determine is whether you are an employee or a self-employed performing artist. You are generally considered an employee if you are working under a contract of service.  That is the case when the person for whom the services are performed has the right to control the amount, nature,…

We are in January again. You’re likely catching up on your emails and backlog from the holidays; however, don’t over-look that calendar year law firms should be completing their December accounts and focusing on drafting year-end financial statements. These year-end financial documents are key for your law firm’s various year-end filings with various regulatory bodies. More importantly, understanding your firm’s financials and metrics is critical to making informed business and resource allocation decisions. This article discusses accounting and financial metrics lawyers should focus on during their preparation and review of their year-end financials to get a pulse on their yearly financial results.…

This bulletin summarizes certain enacted amendments and further announcements made by the Federal Government, as well as announcements by some provinces.  We expect to continue to see additional detail on these measures over the coming days. Enacted Federal Tax Measures The Federal Government passed the Act respecting certain measures in response to COVID -19, which provides for various elements of the Federal tax relief measures. It is estimated that the system will be in place by the week of April 6 and that the first payments will be made ten (10) days later. These measures include: GST/HST Credit: one-time special payment of the Goods and…

DQ Advocates Once appointed, a Trustee is subject to a number of duties. A Trustee’s overriding duty is to act in the best interests of the beneficiaries of the Trust. This article considers and gives an overview of the most important trustee duties. Comply with the terms of the trust deed An obvious and fundamental requirement of a Trustee’s role is to read and understand the terms of the trust document.  It is essential that a Trustee complies with the terms of the trust deed when exercising its powers. Duty to exercise reasonable care and skill The statutory duty of care is set out in…

Crowe Soberman LLP 33 Easily adaptable tax ideas for you and your family Our annual Tax Tips can assist you in your tax planning. It presents some quick ideas and strategies. Please take the time to review your 2016 tax situation and call us for specific recommendations tailored to meet your needs. We will be pleased to work with you on these and other tax-savings ideas. Investment income 1. Tax rates are significantly more favorable for dividend income than interest income. The top personal tax rates in Ontario for 2016 are as follows: The top personal tax rates are not expected to change for 2017. Re-evaluate your investment strategy by…

Collins Barrow National Incorporated On October 3, 2016, among a series of other measures, the Department of Finance (“Finance”) introduced significant changes to the principal residence exemption rules under the Income Tax Act (Canada). The mandate of these changes was specifically to “improve tax fairness by closing loopholes surrounding the capital gains exemption on the sale of a principal residence.” The proposed changes to the principal residence exemption rules effectively limit the ability of certain taxpayers to reduce or eliminate the capital gain on the sale of their home. A general overview of the current rules Prior to discussing the changes to the principal residence…

DQ Advocates Creating a trust involves more than simply drafting a trust document and arranging for it to be signed. A trust is a gift of, for example, money or other assets by the ‘Settlor’ to a Trustee or Trustees which binds those Trustees to deal with such money or assets for the benefit of Beneficiaries. It is enforceable by the Beneficiaries and not the Settlor. The terms of the trust are usually set out in a Trust Deed. A trust relationship distinguishes between the legal ownership of, and equitable interest in, trust property. By making the gift to the Trustees, the Settlor…

Cox & Palmer Sole Proprietorship In a sole proprietorship, an individual is the sole owner of the business and is personally responsible for all the debts, obligations and liabilities related to the business. All the benefits and the profits from the operation of the business are considered to be those of the sole proprietor. Advantages: Direct control of decision-making Inexpensive to form Relatively low start-up costs All profits go to the sole proprietor Disadvantages: Unlimited personal liability of the proprietor (creditors can seek recourse against the personal assets of the sole proprietor to pay off any business debts) Treated as self-employed for income tax purposes, which generally means higher tax…

When it comes to asking for help, a recent survey showed that startups are more likely than owners of established businesses to enlist mentors or coaches. Long-time business owners, on the other hand, were more likely to rely on the services of accountants, lawyers, and bankers than their younger counterparts. Considering the number of startups that fail in the first year of business, and the challenges entrepreneurs face on a daily basis, it’s apparent that we must help startups understand the importance of working with dedicated professionals. Does an accountant cost money? Of course, and it’s one of the biggest reasons preventing entrepreneurs…

What You Need To Know About Personal Income Tax Instalments Crowe Soberman LLP When we first meet with young health professionals, many are surprised when we inform them that they will owe personal income taxes come the following April. They are even more shocked when they learn that they are obligated to make quarterly income tax installments on a go-forward basis. Let’s explain why self-employed health professionals are required to make quarterly income tax installments. Medical residents and part-time workers are generally considered employees. The remuneration received is paid by an employer, who is legally obligated to withhold payroll source deductions (i.e. Employment…

Millar Kreklewetz LLP For years it was an open question as to whether or not a Canada Revenue Agency (“CRA”) auditor owed a duty of care to a taxpayer under audit. In the recent case of Leroux (2014 BCSC 720) the Supreme Court of British Columbia (BCSC) concluded that, on the facts, the CRA auditors owed a duty of care to the taxpayer. But what is the appropriate standard of care a CRA auditor must meet to avoid a finding of negligence? Briefly, Leroux was the case of a taxpayer who was assessed by the CRA, had the majority of his assessment…

CRA: Tax treatment of Ponzi scheme investments We have previously written about court decisions on the tax results arising from taxpayers’ (failed) investments in Ponzi schemes (see our posts on Roszko v. The Queen (2014 TCC 59), Johnson v. The Queen (2011 TCC 54) and (2012 FCA 253), Hammill v. The Queen (2005 FCA 252) and Orman v. Marnat (2012 ONSC 549)). These decisions raise questions as to how the CRA may assess all aspects of the income earned and losses suffered by the duped investors. For example, while the cases focused on whether the taxpayer was required to report some of…

The deadline looms for making your 2014 contribution to investments held in your Registered Retirement Savings Program (RRSP). But you’ve still got a few days and a few choices to make that will save on taxes and save more for your retirement. Here are your last-minute RRSP tips. RRSP deadline details March 2, 2015, at 11:59 PM, is the deadline for contributing to investments in your RRSP for the 2014 tax year. You may make a maximum contribution of up to $24,270, depending on your earned income in 2014 (and minus your pension adjustment if applicable). You’ll find your personal maximum allowable contribution on…

Group Relief Election: Canadian corporations and partnerships that are members of the same closely related group can, in certain circumstances, make an election under section 156 of the Excise Tax Act (Canada) (ETA) to treat certain taxable supplies made between the members as being made for nil consideration. As a result, transactions covered by the election are not subject to the goods and services tax/harmonized sales tax (GST/HST). In the past, the election form did not have to be filed with the Canada Revenue Agency (CRA), but had to be maintained in the parties’ records for audit purposes. As a…

Dentons Tax authorities around the world continue to wrestle with the tax issues arising from the use and sale of Bitcoin currency. Sweden recently announced that it will treat Bitcoin as an asset, and Finland has stated that it will treat Bitcoin as a commodity. China has placed restrictions on the use of Bitcoin. Generally, the price fluctuations and uncertainties around the use and sale of Bitcoins seemed to have generated more questions than answers. In Canada, the use of Bitcoin currency appears to be gaining popularity – Bitcoin ATMs have popped up in several cities, and various retailers and even some charities are accepting Bitcoins for payments or donations. However, the…

Many new small business owners take on the role of accountant during their start up efforts. As there are already numerous demands on the owner’s time, this may or may not be a smart move. An accountant can be an important member of your business team. Not all accountants are created equally, however. A capable accountant focuses on the relationship. Find an accountant who is interested in your success and in building long-term clients, and he or she will be even more advantageous to your team. Your accountant should be interested in both your personal and professional financial success. Unfortunately, some accountants aren’t…

One of the first blogs I wrote was “I am a Contractor Unless CRA Says Otherwise” (Note: the link is being temperamental, so if you want to read that blog, either google it or it is listed as a favorite post on the right-hand side-bar). In that blog, I discussed the various criteria the CRA and the courts use to determine whether a person is an employee or a contractor. I then further discussed the income tax withholding issues that arise when the CRA attempts to re-characterize a contractor as an employee. Finally, I touched upon the concept of a…