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Life Goals

Happy New Year! This is a great time of year to revisit life business and personal goals. What is your ideal life? What do you want to achieve in life? I dare you to dream big, because there is no limit to what you can do when you set your mind to it. Right now,…

What are the Advantages and Disadvantages of Incorporation?

Advantages: Separate Legal Entity/ Limited Liability: Your corporation is a separate legal entity and as such, creditors or legal actions are against the corporation and its assets, not your personal assets.  The shareholders of a corporation have limited liability. Please note shareholders can be legally liable for the corporation’s GST/HST and payroll taxes. Tax Advantages:…

What are some of the most tax effective methods to pay yourself from your corporate earnings?

Salary vs. Dividend Mix: Take out profits using a mix of salary and dividends to maximize your tax savings. The best combination depends on your income level, the corporation’s income level, your cash flow needs and other factors. Shareholder Loan: If you loaned funds to your corporation, you can receive any amount of repayment on…

How does a sole proprietor (self-employed) or an independent contractor report their business income and expenses for tax purposes?

Form T2125, Statement of Business or Professional Activities on your personal income tax form must be completed. A separate form must be completed for each business or professional activity you operate if you have two or more of either. The Statement of Business or Professional Activities are reported based on a calendar fiscal year; hence…

Why is Business Budget Planning Important?

Business Budget Planning A budget is a planning tool necessary for building a framework for your business and finances. Budgets provide a detailed view of business assets, realistic revenue expectations, and how income matches against the anticipated expenses to ensure the business is profitable. Budgets also assist in setting goals, allocating resources, and establishing priorities.…

How to ensure that the automotive allowance to an employee using their own vehicle is not a taxable benefit?

Automotive Allowance Expenses An Automotive allowance is not a taxable benefit if based on a reasonable per kilometer rate per the Canada Revenue Agency. CRA considers an allowance to be reasonable if all the following conditions apply: The allowance is based only on the number of business kilometers driven in a year. The rate-per-kilometer is…

Employment expenses can be tax-deductible by a salaried employee?

Tax- Deductible Employment expenses Salary employees can deduct pension contributions, union dues, and professional fees, but they are very restricted in what employment expenses they can claim. Unlike individuals who run their own business, there is no general rule allowing employees to deduct any reasonable expense incurred to earn employment income. If Employees are required…

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