Advice for businesses:
- Salary and bonus are both considered earned income which is used to calculate your RRSP contribution limit for the subsequent year.
- The first $500,000 of federal active business income of CCPCs receives preferential tax treatment by qualifying for the small business deduction.
- The previous tax rate for small businesses was 11% on the first $500,000, but is decreasing to 10.5% in January of 2016.
Advice for employees:
- Does your employer provide you with a vehicle? If so you will have a taxable benefit included in your income related to the personal use of the automobile
- If you are an employed tradesperson, you may be entitled to a tax deduction of up to $500 for the cost of new tools as a condition of your employment.
Advice for investors:
- If it makes sense, consider selling investments with accrued losses.
- If you are concerned about having to pay tax on your investments, consider buying investments that pay interests annually.
- Structure your loans correctly and deduct the interest.
- Analyze your stocks accordingly.
Advice for individuals:
- Consider income splitting through loaning funds.
- Consider all of the possibilities of contributing to your RRSPs.
For example: Consider delaying contributions if you expect to be in a higher tax bracket in the near future or considering withdrawing funds if you are in a year of low income.
- First time home buyer? Don't forget about the Home Buyer's Plan.
- Maximize your tax benefits by giving to charities. Donations over $200 result in tax savings at the highest marginal tax rate.
Sales tax advice:
- Remember to self-asses and remit GST/HST with respect to employee taxable benefits.
- Business owners should make sure they keep all invoices where GST/HST was paid.
For the full article, download the PDF version here.
(Click: Get a head start on your year-end tax planning)
(Click: Get a head start on your year-end tax planning)
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