Accounting Blog

CONTRACTOR VS. EMPLOYEE: Agreement on Contractor Status Is Not Enough

In a May 8, 2018 Tax Court of Canada case, the Court reviewed whether the taxpayer was earning insurable and pensionable amounts related to her work at a healthcare clinic for 2015 and part of 2016 up to her termination. Classification as an employee would subject the business to various CPP, EI, and other withholdings […]

ACTIVE BUSINESS VS. PROPERTY INCOME: Music Royalties

A private corporation’s income from a specified investment business (SIB) is not eligible for the active business tax rates (varying from 10% to 31%, depending on a number of factors, including the total earnings from operations and the province or territory in which it is located). Rather, a corporate investment tax rate of around 50% […]

TAX ON SPLIT INCOME (TOSI): Can I Take a Salary Instead of a Dividend?

Dividends received by individuals from private corporations as of January 1, 2018 may be subject to taxation at top marginal tax rates (due to the new TOSI rules) if, in general, they are determined to be unreasonable. Salaries, however, are not specifically subject to these rules. As such, some may consider replacing potentially unreasonable dividends […]

INTEREST DEDUCTIBILITY: Returns of Capital

In an April 20, 2018, Tax Court of Canada case, at issue was whether the taxpayer could deduct interest incurred in 2013, 2014 and 2015 related to $300,000 borrowed in 2007 to purchase mutual funds. From 2007-2015, the taxpayer received a return of capital from the funds, totalling $196,850 over the period. A return of […]

DONATION RECEIPTS: How Complete Is Complete?

Charities should ensure that any donation receipts issued are fully compliant with the tax rules. Failure to do so may result in the donor being denied a charitable donation if reviewed by CRA. This could cause operational and goodwill problems for the charity. Receipts for cash gifts must have the following: a statement that it […]

DIRECTORS: Can They Be Liable for Corporate Income Taxes?

A December 11, 2017, Tax Court of Canada case examined whether a taxpayer was liable for unpaid income taxes of the corporation of which he was a director. CRA’s assessment was based on the assertion that the taxpayer was a legal representative of the corporation and had distributed assets of the corporation without having first […]

PERSONAL USE OF BUSINESS AIRCRAFT: How Big of a Taxable Benefit Is It?

A CRA communication dated March 7, 2018 provided updated commentary on taxable benefits arising from the personal use of a business aircraft. CRA categorized the types of flights into three groups, as follows: Mixed-use flights – If a shareholder or employee takes a flight which has a clear business purpose, they would not generally be […]

2018 Tax Tips and Traps

What does 2018 have in store for us in the tax world?  As your Kelowna Chartered Accountants, we’ll explain with the following high-level summary of the most recent tax developments applicable to business owners, investors, and high net worth individuals. TAX TICKLERS Some quick points to consider: CRA has required PayPal to disclose sales and […]

How to Know When to Hire a Kelowna Bookkeeper

Small business owners wear many hats.  One day, you’re the only manager on duty.  In the evenings, you’re the cleanup crew.  You’re the entire customer service department on Friday.  The marketing department on Sundays.  And sometimes, you’re all of the above within the hour.  You may not have a massive list of daily income and […]

Tips on Making the Best Choice Between RRSPs and TFSAs

For decades, the go-to tax-sheltered savings and investment vehicle has been the registered retirement savings plan. Most Canadians are aware of the importance of making regular contributions to their RRSP. In 2009, however, a new option was introduced called the Tax-Free Savings Accounts (TFSAs). Since then, we’ve had a choice to better meet short-term and […]

Benefit from Pension Income Splitting

Have you heard of tax planning opportunities that offer the possibility of saving hundreds, or thousands of dollars in tax?  All while increasing eligibility for government benefits with no advance planning, no expenditure of funds or time? This actually describes pension income splitting, a strategy to allow married taxpayers over the age of 65 (or […]

Tax Planning Tips for Your 2017 Return

Tax planning should be a year-round affair. But as tax season approaches, it is a particularly good time to review your personal finances and take advantage of any tax planning opportunities that may be available to you.  At Kerr & Company, your Kelowna tax planning experts, we are dedicated to providing our clients with the best […]

2017 PERSONAL INCOME TAX RETURN CHECKLIST

Are you wondering what documents you need to prepare your tax return?  At Kerr & Company, Kelowna accounting firm, we are committed to providing you with the largest income tax return possible. To ensure we find every deduction, we’ve put together this handy checklist so you’re fully prepared with every document needed before we file your […]

RRSP Contributions and TFSA Contributions – The Rules You Need to Know for 2018

According to Statista, 21% of people make the New Year’s resolution to focus on financial goals, second only to fitness and health goals. For most individuals, a new calendar year is the start of a new tax year and serves a fresh opportunity to contribute to registered retirement savings plans (RRSPs) and tax-free savings accounts […]

Understanding the CPP Post-Retirement Benefit

At Kerr & Company, Kelowna tax accountants, we help various clients with retirement planning whether they’re in their 30s and planning long-term or quickly approaching retirement with questions on when to start retirement benefits such as the Canada Pension Plan (CPP) and Old Age Security (OAS).  With the right systems in place, as early as […]

Kelowna Tax Accountants Provide Important Old Age Security Information

Baby Boomers, who are now retired or close to it have always relied on the fact that they would receive Old Age Security benefits. For many, many years, the perception has been that when a person turns 65 these benefits automatically kick in. It is no longer just the age that is considered as the […]

Common Small Business Questions Answered by Kelowna Accounting Firm

At Kerr & Company, chartered professional accountants, we not only take care of accounting tasks for your Kelowna small business but we also offer business advisory services, bookkeeping, accounting software training, tax planning and much more.  If you want to stay on CRA’s good side, work with a Kelowna accounting firm, like Kerr & Company […]

How Tax Changes Affect the Upcoming School Year

We are officially into the fall season and students are fully immersed in their studies by now. Whether you’re a parent or post-secondary student, this is the first full school year affected by previously announced tax changes that we, your Kelowna accountants, spoke about in our article from June. Unfortunately, the tax changes for students […]

Kelowna Chartered Accountants: Useful Tips for Responding to a First Installment Reminder from the CRA

Right about now, Canada Revenue Agency (CRA) is sending out some unwelcome and surprising news to millions of Canadians.  As Kelowna chartered accountants, we work hard to ensure that these letters never make a surprise visit to your mailbox. However, if you were one of those Canadians who received an Installment Reminder from CRA to […]

Tips on Claiming a Deduction for Moving Expenses

Spring is a busy time, especially this year in Kelowna, with real estate sales.  Now that summer is here, kids are out of school, lives are being packed up and all of those spring buyers are making the move into their new homes.  If you’re one of the many moving to Kelowna or the surrounding area, […]

4 Changes To 2017 Personal Tax Credits You Must Know

The Canadian tax system is in a constant state of change and evolution. New measures are introduced and existing ones are “tweaked” through a never-ending series of budgetary and other announcements. As a Kelowna accountant serving the Vancouver and Kelowna area, 2017 is a year in which I’ve seen more than usual tax changes affecting […]

Filing a Tax Return for 2016

The time is fast approaching when the annual chore of gathering together the various pieces of information needed to complete one’s annual tax return, and getting that return completed and filed can’t be delayed any longer. For those wishing to put that chore off as long as possible, there is one (very small) bit of […]

What You Can and Cannot Deduct as a Small Business

To own a small business in Kelowna is an entrepreneur’s dream.  Work hard and when the day is done, enjoy this beautiful four season playground. The area is made up of numerous small businesses with a variety of things to offer. Whether your business is established or just getting started, Kelowna accountants follow rules when […]

Tax Deadlines for the 2017 Taxation Year

Each new tax year brings with it a new list of tax payment and filing deadlines, as well as some changes with respect to tax planning strategies. Some of the more significant dates and changes for individual taxpayers for 2017 are listed below. RRSP deduction limit increases to $25,370 The RRSP contribution limit for the […]