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FAQs

  • General
  • Corporation
  • Healthcare
  • Real-estate

  • What are business expenses?

    Business expenses are costs incurred in the ordinary course of business, such as rent, utilities, and salaries, which can be deducted from revenue to determine net income.
  • What is an HST rebate?

    An HST rebate is a refund on the Harmonized Sales Tax paid, often available for certain types of new housing and substantial renovations. The rebate results when Input Tax Credits (ITC) exceed collected HST.
  • How can I reduce my corporate tax liability?

    You can reduce corporate tax liability through various methods like deferring income, claiming all eligible deductions and credits, and using tax-loss carryforwards and carrybacks.
  • What’s the difference between an expense and a capital expenditure?

    An expense is a cost for current operations, deductible in the year incurred, while a capital expenditure is for long-term benefit and must be depreciated over time.
  • What is the tax treatment for dividends in Canada?

    Dividends received by Canadian residents from Canadian corporations are subject to preferential tax treatment through the dividend tax credit system.
  • Do I need to charge GST/HST on international sales?

    Generally, GST/HST is not charged on international sales of goods and services, but specific rules and conditions may apply.
  • What is a Notice of Assessment?

    A Notice of Assessment is a statement from the CRA that outlines the results of your filed tax return, showing taxes owed or refund due.
  • Can I claim vehicle expenses for my business?

    Yes, if the vehicle is used for business purposes, you can claim expenses such as fuel, maintenance, insurance, and depreciation. However, buying a vehicle under a business may not always be a great idea.
  • How do I calculate the adjusted cost base (ACB) of an asset?

    The adjusted cost base (ACB) of an asset is calculated by adding the purchase price to any related acquisition costs and subtracting any return of capital.
  • What are the tax implications of gifting assets to family members?

    Gifting assets can trigger capital gains tax on the increase in value since the original purchase. It's essential to consider the tax implications and consult with a tax professional.
  • What is the deadline for filing personal income tax in Canada?

    The deadline for filing personal income tax returns in Canada is April 30th of the following year, or June 15th if you or your spouse/common-law partner are self-employed. However, taxes are still due on April 30th.
  • Can I deduct my home office expenses?

    Yes, you can deduct a portion of your home office expenses if you use your home workspace to earn business income and meet certain conditions set by the CRA.
  • What are SR&ED tax credits?

    The Scientific Research and Experimental Development (SR&ED) tax credits are federal and provincial incentives for Canadian businesses conducting R&D, allowing them to recover a portion of their expenditures.
  • How do I register for a GST/HST number?

    You can register for a GST/HST number online through the Canada Revenue Agency's Business Registration Online service, by mail, or by phone.
  • What’s the difference between a sole proprietorship and a corporation?

    A sole proprietorship is owned and operated by one person, offering simplicity but no liability protection, whereas a corporation is a separate legal entity providing liability protection but with more regulatory requirements.

  • What’s CCA?

    Capital Cost Allowance (CCA) is a tax deduction in Canada for the depreciation of property or assets used to earn income.
  • Do I need to file taxes every year for a dormant corporation?

    Yes, a dormant corporation in Canada must file annual tax returns even if no business activity occurred.
  • Can I file T2 myself?

    Yes, you can file your T2 Corporation Income Tax Return yourself, but many choose to use a professional due to complexity.
  • What’s QBO?

    QBO stands for QuickBooks Online, a cloud-based accounting software for small and medium-sized businesses.
  • What’s the corporate tax rate in Ontario?

    As of 2024, the general corporate tax rate in Ontario is 26.5%, including both federal and provincial taxes. However, with a small-business deduction, that rate could be less than half of that (i.e., 12.2% in Ontario).
  • What’s LCGE?

    The Lifetime Capital Gains Exemption (LCGE) allows individuals to exclude a certain amount of capital gains from taxation on qualified assets.
  • Can I take loans from my corporation?

    Yes, but loans taken from a corporation must adhere to strict rules to avoid being treated as income for tax purposes.
  • What is the difference between GST, HST, PST, and QST?

    GST is the federal Goods and Services Tax, HST combines federal and provincial taxes, PST is a provincial sales tax, and QST is Quebec’s sales tax.

  • What is PMC

    PMC stands for Professional Medical Corporation, allowing medical professionals to incorporate their practices for tax advantages. It can also stand for Practice Management Corporation - an entity that could allow Psychologists and Psychotherapists to offer multi-disciplinary services under the same brand.

  • What is PREC?

    Personal Real Estate Corporation (PREC) allows real estate agents in Ontario to incorporate and receive income through a corporation.
  • Do I pay capital gain or income taxes on property sales?

    It depends on the nature of the sale; personal property sales often incur capital gains tax, while business properties, and property flipping, may be subject to income tax.
  • Is there HST on a property flip

    Yes, if the property flip is considered a business activity, HST (Harmonized Sales Tax) may apply.
  • What’s Underused Housing Tax (UHT)?

    UHT is a tax on underused residential properties owned by non-residents or non-Canadians to discourage leaving properties vacant.
  • Should I own a property through a corp or personally?

    It depends on factors like tax implications, liability protection, and investment goals. Consulting one of our tax advisors is recommended.
  • Can I expense renovations?

    Yes, you can expense renovations if they are for income-producing properties, but the costs must be capitalized and depreciated over time, unless it's a minor expense that does not materially increase the life or value of the property.
  • What’s the Smith Maneuver?

    The Smith Maneuver is a Canadian tax strategy that converts mortgage interest into tax-deductible investment loan interest.
  • I have a cottage outside of Canada? Do I need to file T1135?

    Yes, if the cost of your foreign property exceeds $100,000 CAD, you must file Form T1135 to report it to the CRA.
  • Should I claim CCA on a rental property?

    Claiming CCA on a rental property can reduce your taxable income, but it may affect your capital gains tax when you sell.

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