Koroll & Company Blog

Cyberattacks on government or on a private company, in a single country or worldwide, are more frequently making headline news. The hackers who perpetrate the attacks seek to profit by it — either by demanding payment from the entity whose systems have been compromised, or by obtaining confidential personal information (especially identifying or financial information) about individuals, which can then use fraudulently or sold to others who wish to do so. 

In September of this year, the credit reporting firm Equifax, one of the largest in the industry,  announced that it had been subject to a major cyberattack. The attack was especially concerning, both because of the nature of the information Equifax holds, and because of the number of Canadians affected.

The principal residence exemption provides Canadian taxpayers with substantial tax relief.

When you sell property, you realize either a capital gain or a capital loss. A capital gain will occur if you sell your property for more than you paid to acquire it and make improvements, known as capital costs. The opposite is true for a capital loss.

While it would seem like good news to find out you made a profit on the sale of the property, the existence of a capital gain means that you have an additional tax liability. 

If, however, the property was your principal residence for all or part of the time you owned it, you may be able to avoid all or some of the liability.

If you or your spouse or common-law partner are self-employed, the last day to file your 2016 income tax return is June 15, 2017. If you do so by this date, you will not incur a late-filing penalty.

You will not, however, escape interest for unpaid balances owing.

As per legislation, any balances owing, on your income tax return are due on April 30 unless April 30 falls on a weekend. 

Please note that because April 30, 2017 was a Sunday, the due date for balances owing on your 2016 return were due May 1, 2017.  

Ecological Gifts Program

The Budget proposes the following measures to protect gifts of ecologically sensitive property made after March 21, 2017:

• The 50 per cent tax which applies where the use of ecologically sensitive land is changed, or the property is disposed of, without the consent of Environment and Climate Change Canada (ECCC), will be extended to situations where the land is transferred between organizations for consideration and the transferee changes the use of the property or disposes of it without the consent of ECCC.
• The requirement for ECCC to approve recipients of ecological gifts will be extended, on a gift-by-gift basis, to municipalities and municipal and public bodies performing a function of government.
• Private foundations are no longer permitted to receive ecogifts.
• The donation of personal servitudes will qualify as ecological gifts, provided certain conditions are met (e.g., the servitude must run for at least 100 years).

The Federal Government’s 2017–18 Budget gives Canadians a taste of what they might expect over the next couple of years: attempted efficiencies, closed tax loopholes, steady deficits, and a touch of caution. Budget 2017 outlines only $200 million in net new spending, but also an increase to the deficit of more than $5 billion for 2017–18, partly due to commitments from the previous budget, reduced revenues and increased general expenses.

The end of the month is fast approaching, which means that your information returns are coming due.

If you are the proactive type, you have likely already filed you returns and mailed the documentation to the recipient, which means you are free and clear.

However, for those of you who have not filed your information returns, you want to be sure to by February 28th, 2017, otherwise, you could be in for some hefty fines. 

If an employee has insurable employment, Employment Insurance premiums are deducted from their insurable earnings.

The Employment Insurance premium rate for 2017 is 1.63%. This percentage is taken from each paycheque.

The last thing you want, when you incorporate your business, is for Canada Revenue Agency (CRA) to label you a personal services business (PSB). As stated in the Income Tax Act, and paraphrased in the Corporation Income Tax Guide, a PSB is defined as “a business that a corporation carries on to provide services to another entity, that an officer or employee of that entity would usually perform.”

In other words, if CRA determines an incorporated individual working as a contractor is really just an employee of the company they are working for, they would be deemed a personal services business. This designation comes at a great cost to the individual.