According to Statistics Canada there were 2.3 million businesses in Canada as of June 2009, with 57% of all business establishments located in Ontario and Quebec. About 25% produce goods, while 75% provide services. Most of these firms count on financing to grow. When will interest be deductible, particularly during tough times? It’s important for investors to discuss the rules with their tax advisors to be sure. Here are four to be aware of: Limitation on Interest Deduction on Purchase [...]

Did you know that small firms in the business sector create proportionately more jobs than large firms, especially in the early years of development? This pattern, however, disappears once the age of the firm is taken into account – older firms contribute more to employment growth[1]. For these reasons, lending to help firms grow is important to the economy. Tax efficient borrowing reduces the costs. CRA has set out its current interpretations on interest deductibility in its IT-533. Following are [...]

Do you run an unincorporated small business from your home or office? If you haven’t filed your tax return yet, you must do so before June 17 to avoid a late filing penalty; if you owe money, however, do so as soon as possible because the interest clock started to tick on May 1. If you are serious about running a for-profit business, (that is, know that losses on hobby ventures cannot be deducted – there must be a reasonable [...]

If there was one insight I gained as I worked on the Federal Task Force for Financial Literacy is that more than any other single issue, challenges of financial literacy affect every Canadian and bind us together in our mutual need for financial education. No matter the age, sex, color, culture, religion or socio-economic status represented, financial illiteracy is one issue that everyone can agree on: in a constantly changing financial world, improving here will help secure uncertain futures. According [...]

Comedian Ray Romano once said, “Having children is a lot like living in a frat house – nobody sleeps, everything’s broken, and there’s a lot of throwing up.”  But aside from being highly amusing calamities at times, families are also powerful economic unions which are subject to fairly complicated tax rules. Those that master the art of saving together become powerful economic units. There is no better time than post tax-filing season to review your opportunities and become important savings [...]

Tax filing season is over for close to 20 million Canadians whose tax returns have already been assessed this year. Of those, 14%, or just under 3 million taxpayers, had a balance due. On average, they owed $3700 upon filing; the rest got refunds (65%) or filed a nil return (21%) to receive refundable tax credits. Did you miss claiming something? Now is the time—out of the fray—to double check.  Here are some common mistakes taxpayers make in claiming their [...]

There are lots of ways to do better for yourself at tax time; starting with the filing of your tax return as soon as possible if you missed the April 30 deadline. You’ll be subject to a late filing penalty if you have a balance due, plus interest, so do get it done this week to avoid possible gross negligence penalties of 50% more. Working together with your tax and financial advisory team is critical to maximize your opportunities—especially if [...]

The Fraser Institute published an interesting paper by Francois Vaillancourt in April 2010 on what it costs Canadians to comply with their personal income taxes. Leger Marketing did a detailed survey for the national think tank on a sampling of 2000 tax filers based on the 2007 tax filing year. The key results: the use of a tax pro has increased significantly over the past 20 years. 39% of Canadians paid a pro in 1986; 51% of Canadians paid in [...]

In Canada, we have a tax system based on self-assessment and voluntary compliance. It works extremely well, considering how complex the topic is, with the overwhelming majority of individuals and corporations meeting their obligations on time. It is exactly for these reasons that the proposed payment of a 15% finder’s fee to those who help the government identify extensive international tax fraud may set a worrisome precedent that could erode the CRA’s vision and values and with it, the principles [...]

Canada’s household wealth grew at an annual rate of 7.8% between 2000 and 2012 according to the 2012 Credit Suisse Global Wealth Report, which also predicted last October that with moderate and stable economic growth, total household wealth will rise over the next five years by 50% around the world. Moreover, the number of millionaires worldwide is expected to increase by about 18 million people, reaching 46 million in total by 2017. While China will surpass Japan as the second [...]