News Archives - Page 26 of 28

It’s that time to break out the year-end tax-planning playbook | Financial Post

We’re closing in on year-end, and for taxpayers, this is the time to take a look at last minute deductions and adjustments to save you money and maximize your returns when you file next spring. There are a few opportunities that require planning now. One item is tax-loss selling, which needs to be completed before the last week of December. Also, don’t miss your chance to use the federal First-Time Donor’s Super Credit (FDSC). This is the last year you can claim it, so ensure you don’t miss your chance to take an additional 25 percent in tax credits on donations up to $1,000. And for small-business owners, now is the time to look into dividend sprinkling before the proposed anti-dividend-sprinkling rules come into effect.

More than half of all sales in Canada still done in cash, Bank of Canada survey says

Surprisingly, fifty-one percent of people in Canada use cash for the majority of all their transactions. Despite the exponential rise in credit and debit card usage, Canadians still prefer cash. Given that they’re quicker and easier to use, many expected people to be using cash less often. Where cash is no longer king is for big-ticket items, and instead it is used for small-value transactions. In terms of the overall dollar value, credit cards appear to be the payment option of choice. Credit cards offer various incentives and “free perks,” which cost Canadians over $10 billion in 2014 in hidden costs for processing fees. The average credit card transaction costs a merchant $2.08 to process it versus 30 cents for debit cards and 29 cents for cash.

The trouble with capital gains taxes, and why we’re likely still stuck with

An economic research organization in Canada is advocating for the removal of the Canadian capital gains tax, which was introduced in 1972. They point out that Canada has a need for increased business investment, and the tax suppresses how much capital is available to support such ventures. Investment in Canada has fallen 18 percent since 2014, so reducing or abolishing the tax, like other countries have, might help spur economic growth. They argue that capital gain is more sensitive than other types of investments to the tax rate, and as a result a high tax rate can hurt economic growth by discouraging a natural reallocation of capital to its most productive uses. Some investors avoid paying this tax by delaying the realization of their capital gains, but not everyone (often low-and middle-income taxpayers) has the financial flexibility to delay a sale. However, not all economists agree that removing capital gains will increase investment in Canada.

Trudeau’s making it tougher on students

In the coming year, post-secondary students across Canada are at risk of increasing taxes due to proposed tax changes. The current education and textbook tax credits, which were put in place by the previous government, are being eliminated by the Trudeau government. These deductions allowed student incomes, earned while attending school or over the summer months, a way to be taxed at a lower rate. The loss of these deductions means that students need to find more money to support the cost of ever increasing post-secondary education. Ironically, the prime minister’s website says he’s working to make post-secondary education more affordable and these change usually hit the middle class the most. Given that these students are the future of Canada, these change appear to be misguided.

Small Business Owners Not Letting The Feds Off The Hook Just Yet

After an unprecedented three-month backlash from the small business community, the government announced some small changes to the proposed tax measures. They have dropped the capital gains limits in business succession, increased the exempted annual passive income threshold to $50,000, and promised to reduce small business corporate tax rate to nine percent. They even stopped their rhetoric that portrayed small-business owners as tax-cheats. However, these revisions are not enough and do little for business owners to grow their business, innovate and create jobs. Given the challenges that business owners face, there are still a lot of questions that need to be answered.

Small business still concerned in spite of tweaks to tax changes, Morneau hears

Small business is still very concerned in spite of tweaks to the tax changes. Many business lobby groups initially said that they welcomed Morneau’s changes to the proposals, but after they heard from people like business owners and tax experts, who said that the plan would end up hurting the economy, they changed their mind. What needs to be done, according to some, is that these should be abandoned and we should take a closer look at the tax system in Canada.

Personal Investor: Riding the rally? Beware of the tax man – Article – BNN

IF you are a stock investor and have enjoyed gains this year, it might be worth your time to research how to protect those gains from the government tax man. There are differences in the way the government calculates investment gains and incomes, among other sources. It would be in your interest to look into hiring a tax expert to direct you in the proper direction to lower you effective tax rate and not pay too much. Look into the the three basic tax saving tools: rrsp,tfsa and non registered accounts to save money.

Think you have until next year for new stress tests? Think again.

Canadians looking to buy a home before the new mortgage rules apply may need to act now before the January 1st, 2018 deadline. Stress test used to only apply to home buyers with less than a 20 percent down payment, but the rules governing mortgages have been tightened and now all borrowers will need to meet these guidelines. Essentially, the new rules could cut a home buyer’s purchasing power by up to 21 percent. While it is expected to take effect in the new year, banks may move up the policy date and some estimate that it could come as soon as December.

Surprise! 4 things you didn’t know were taxable | National Post

With tax season beginning in just a few months, there is little time to prevent an unexpected tax surprise. Often people forget or they may not be aware of four kinds of income that are taxable: forgiven debt, unemployment benefits, proceeds from fundraising and disability insurance benefits. Preparing to report these items now, and doing things like spreading out estimated tax payments can help you avoid a surprise when you file your 2017 tax return.

‘Will provide a lot of relief:’ Ottawa’s passive investment tweaks to ease

Amid the controversial proposed tax on passive investment income, the Finance Minister has recently made a decision to soften the changes by not subjecting the first $50,000 of passive investment income earned by private corporations to the new tax. Given that just 3 percent of Canadian businesses earned above the threshold in 2015, this means that 97 percent of private corporations in Canada will not be affected. Only the remaining 3 percent, which make up 88 percent of taxable income, will be affected. It will go a long way to quelling the criticism about the proposed changes, but it still leaves questions about how future gains on these investments will be treated.