With every new year comes a new federal budget. This year, the budget includes $22.8 billion in additional spending over the next five years for the enhancement of existing tax credits and incentives and the addition of new ones, additional resources for the Canada Revenue Agency (CRA) to recover unpaid taxes, new measures to reduce tax evasion and avoidance, improving savings plans for retirees and those with disabilities and introducing a national prescription drug plan.
Many Canadians, or at least the half that have taken the time to draft a will, often assume that once their will has been written up, they can put it out of sight and out of mind.
The problem is that drafting your last will and testament requires regular updating to reflect changes in your life. As a rule, you should review your will every three to five years to ensure that everything still applies to your current situation. In addition, if is important to review your will after any major life event.
As a small business owner, it is important for you to understand your business and be accountable to the Canada Revenue Agency (CRA) who holds you responsible for reporting your business activity through tax returns and remittances.
To do this effectively, you must understand the necessary processes and the information you need to collect and retain. You must also understand the factors that impact the growth and success of your business.
As with every new year, 2018 and 2019 saw changes that will affect your tax planning strategy as both an individual and as a business owner.
To help you better understand the changes you should be considering when completing your 2018 tax return and planning for 2019, we have compiled them here for your review.
For many Canadians, just thinking of the Canada Revenue Agency (CRA) can give them a headache. But, while the tax man isn’t everyone’s favourite person, they do play an important role in the Canadian tax system.
The CRA administers tax, benefits and related programs - all while ensuring each Canadian is compliant and receives no more or less than that which they are entitled to.
That is why the CRA offers a number of tools and resources to help business owners, like you. Koroll & Company has listed some of those here.
While many Canadians are focused on filing their 2018 tax return, it is important to also remember to plan and strategize for the year ahead.
To do this, you must first make note of the applicable tax brackets, credit rates and limitations, contributions and premiums that will apply to you and your specific situation in 2019.
Unlike tax deductions that reduce your taxable income, tax credits reduce your tax owing (your taxable income multiplied by the applicable tax rate). There are two types of tax credits – refundable and non-refundable.
A refundable tax credit means that the government will return the unused portion of your tax credit to you if your tax owing becomes $0 without using the full amount.
Registered Retirement Savings Plans (RRSPs) and Registered Pension Plans (RPPs) are retirement savings tools that help you plan for your financial future.
Knowing the similarities and differences between the two is critical to understanding their tax treatment.
