Business tax 2018
(Jun 15th 2018)
Important Dates for 2018
RRSP Feb 28th 2018
Personal Tax April 30th 2018
Self Employed Tax June 15th 2018
Corporation Tax June 30th 2018
Payroll Regular Remitters
Due on the 15th of every month for the previous month deductions.
T2 Corporate Tax Filing
T2 corporate filing form is used to file your Corporate taxes for your business. The T2 corporate tax filing is a bit more complex than T1 personal taxes. At Capex, we provide you the right management services to avoid penalties from the Canada Revenue Agency (CRA). We would start this process off by getting your bookkeeping completed for the prior 12 months and add in the required adjusting entries to optimize your tax position.
T2125 Sole Proprietorship & Partnership Taxation Filing
The T2125 form is used to report your business, commission and professional income to the CRA. It is critical to keep track of all your expenses so that the necessary deductions can be taken against your taxable income. As a sole-proprietorship/partnership you as the tax payer are faced with higher tax liabilities and it becomes ever more important to consider the tax planning strategies that we can help you implement.
T1 Personal Tax Filing
Here’s a myth buster; even if you had no income to declare the prior year, you are still legally obliged to file your personal income taxes. At Capex, we keep things stress free for our clients to ensure they are effectively filed while avoiding deadlines and penalties. Simply email us your T4's and RRSP's we will have the return prepared and go through a review with you during our meeting.
T3 Trust Tax Filing
We can provide you with the critical tax strategies to minimize taxes for individuals, business owners and other stakeholder investors. Planning for retirement? we can provide the guidance and advice required on all financial matters. Individuals planning on writing their wills we can provide the required input to maximize the benefit to your next in kin and minimize the tax liabilities.
Real Estate Tax
Real estate can be a fantastic investment, but it’s important to know what to do when you dispose of that property. It’s also important to be prepared if the disposition of the assets results in any gains which are taxable by capital gains. If there are previous capital losses we can use those to offset the capital gains. Team Capex will take all of this into account by determining the best tax strategies for your sale of property.
Corporate Tax Reorganizations
Sometimes Accountants take short cuts and provide a standard set of clauses in your article of incorporation which limits the tax planning that can be done. If your article of incorporation is less than 6 pages then you might be victim to this. Many reorganizations are initiated for tax reasons such as assessing corporate losses, crystallizing the capital gains exemption, departure of one of several shareholders, break up of the corporation among several shareholders. The reorganization is completed above by utilizing the section 85 rollovers in the Canadian Income Tax Act.
SRED – Scientific research and experimental development tax credits recovery
The “SRED” is a federal tax inventive program designed to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) costs. Applying for the SRED tax incentive carries two major benefits. The first benefit from SRED let’s you deduct the “SR&ED expenditures from your income for tax purposes. Secondly it provides you with a SR&ED investment tax credit (ITC’s) that you can use to reduce your income tax payable under part 1 of the Income tax Act. Essentially you get assistance and benefits for investing in your own company in the form of lower taxes both current and future.
T5 Shareholder Tax Optimization
Starting a business is always exciting, but it’s critical to know how to manage your income taxes. In Canada you are legally able to reduce your income taxes and have the right to defer or lower your taxes with the right supporting documentation. Regardless if you’re paying yourself, employee salaries or dividends, each scenario has a different tax liability and needs customized consultation. At Capex we will maximize your after tax net income by strategically allocating income. A CCPC can take advantage of the small business deduction tax rate of 15% and take out $35,000 a year out tax free each year out of the corporation and pay no personal taxes on this money.
Most businesses operating in Canada are impacted by this tax and unless they’re managed properly, they can have a negative impact on your business. Always remember that an HST registration is required for annual revenues of $30,000 or above. The collection and remittance of the HST remains the responsibility of the recipient who is generating that income. Keep note that the HST remittance frequency can be annually, quarterly or monthly depending on the industry and occurrence of income collection. We are here to guide you to accurately manage all your necessary records.
Estate and Succession Planning
Estate planning in this context is a specialized form of corporate reorganization for the goal of succession planning usually involving either a section 85 rollover or a section 86 internal reorganization. An estate freeze is a legal estate planning technique used to lock in the current value and tax liability of a capital property for one person, while attributing the value of future growth of that capital property to another person usually a family member. Ask us how we multiply the capital gains exemption and make it work for you!
Notice of Objection - CRA Appeals
As a Canadian tax payer you have the right to challenge the CRA on the reassessment of your tax owing position. There is a 90 day timer based on the date stamped on the CRA letter. It is time sensitive to have your objection filed. This objection must be filed as it registers a formal dispute on any tax matters. We can help you get this filed and represent your case to the CRA to help you reach a favourable outcome.
Purchase/Sale of Business
When purchasing a business, you can go about doing this via an Asset sale or a Share sale and both carry different tax consequences. The overriding idea here is that sellers want to sell shares and buyers want to buy assets. The reasoning for the seller to be motivated to sell shares is to utilize the $835,715 per person Canadian capital gains exemption (2017). Motivated buyers should be aware of the tax consequences of potential unknown liabilities that such a transaction would carry. Buyers would want to buy the assets so they can be sold at the current fair market value which usually gives the buyer a higher tax cost base for the assets to be written off over time i.e. Depreciation expense. It is highly recommended to consult a Accountant to ensure that all due diligence processes are completed.
Are you unsure as to how much money you should invest into your RRSP? If you would like to maximize your after tax income we can advise you on what's the optimal RRSP to contribute. A quick chat in February each year will help to optimize your tax bracket. We do this by understanding what your long term goals are and what your total cash needs are. Once we establish this we help to understand what is the optimal RRSP contribution you should make and set you up with a financial planner to help with the execution of the RRSP.