Tag Archives: CANADIAN ACCOUNTING & TAX BLOGS

Introduction: Understanding the Fine Line Between Tax Planning and Tax Avoidance Tax planning is a legitimate strategy to minimize tax liabilities while adhering to the law. However, tax avoidance occurs when a taxpayer complies with the literal interpretation of tax law but violates its intent or spirit. This distinction can sometimes blur, and even lawful […]

Introduction: Understanding Personal Services Businesses (PSBs) In Canada, the principle of tax integration seeks to ensure that the total tax paid on income is similar, whether earned directly by an individual or through a corporation. While corporations can offer advantages like tax deferral and limited liability, the personal service business (PSB) rules significantly restrict these […]

Introduction Executor compensation is a crucial component of estate planning. When left unaddressed in a will, disputes over compensation can arise, potentially diminishing the value of the estate and the inheritance beneficiaries receive.  Understanding the rules for executor compensation and its tax implications is essential for effective estate planning. The Role of Executor’s Compensation in […]

Introduction Canadians looking to invest in or conduct business in the United States often encounter Limited Liability Corporations (LLCs). While LLCs are a popular and flexible vehicle in the U.S., Canadian taxpayers should exercise caution due to the mismatch in tax treatment between Canada and the United States, which often leads to double taxation. This […]

Introduction The deductibility of sales expenses is an essential consideration for commission employees in Canada. These rules, governed by section 8 of the Income Tax Act, outline the conditions and limitations for deducting employment-related expenses.  This guide provides an updated and comprehensive understanding of the key aspects of deductibility, ensuring compliance and maximizing benefits. Who […]

Introduction Life-insurance premiums can sometimes be deducted as business expenses, but these deductions are subject to strict rules under the Income Tax Act. Misunderstanding these rules can lead to denied claims, audits, or penalties.  Here’s an updated guide to help you understand when and how life-insurance premiums may qualify as a business deduction. Introduction: Business […]

Introduction The Clergy Residence Deduction (CRD) allows qualifying members of the clergy to reduce their taxable income by offsetting housing-related expenses or benefits. Governed by paragraph 8(1)(c) of the Income Tax Act, this deduction is an essential tax relief mechanism for eligible clergy members, provided they meet strict criteria based on their status and function. […]

Introduction – Income Tax & The Home Office The concept of working from home has undergone significant transformation since the COVID-19 pandemic began. Many Canadians who previously worked in offices continue to work remotely, either full-time or in hybrid arrangements. This shift has brought renewed attention to the tax implications of home office expenses. The […]

Introduction – Shareholder Loans & Subsection 15(2) of the Income Tax Act Shareholders often derive financial benefits from their corporation through salaries, dividends, or shareholder loans. Shareholder loans are a common business practice that allows shareholders to access funds from their corporation, providing flexibility and incentivizing investment.  However, the Income Tax Act contains complex provisions […]

Introduction Spousal and child support payments often carry significant tax implications for both the payer and recipient. These payments may affect income tax calculations, where spousal support payments could be deductible by the payer and taxable for the recipient. On the other hand, child support payments follow a different set of rules. This article explains […]