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5 BULLET FRIDAYS - Tax Mechanic News, Tips, Strategies
Tax Mechanic
April 26, 2024
Bite size tax and finance related information that could save you $$$
There is a strategy called "tax loss utilization" or "loss buying" to decrease a company’s tax bill. Your loss could be worth money.
Interested? Let me explain... book a call with me here!
Bull v M.N.R. - A case study about the application of the Employment Insurance Act
Brenda Bull and Ross Bull, a married couple of over fifty years, held shares in a corporation named Midway Automotive Centre Limited. The corporation operated a family business with a gas station, motor vehicle repair shop, snow removal, rental of seasonal cottages, and sale of used vehicles.
The Appellants claimed Employment Insurance benefits for periods starting in 2011 or 2012 and ending in 2016, based on their employment with Midway. The Minister of National Revenue rejected their claims, asserting that their employment was excluded from insurable employment due to their ownership of more than 40% of Midway's voting shares and their lack of arm's length dealing with the corporation.
Life Insurance as a Tax Shelter?
Life insurance can indeed serve as a potential tax shelter for individuals seeking to minimize their tax liabilities. This tax-advantaged status primarily arises from the unique tax treatment of life insurance policies in many jurisdictions, including the United States and Canada.
Let’s explore some of the key thoughts behind this strategy.
Tax Deferral: One of the key benefits of life insurance as a tax shelter is the ability to accumulate cash value within a policy on a tax-deferred basis. The growth of cash value is not subject to income tax as long as it remains within the policy.
Read more here!
Has your registered charity status been recently revoked?
If you own a registered charity, and received a letter from the CRA notifying you of an intent to revoke your charitable status, this one is for you. These letters from CRA cover many different grounds for de-registration. Some relate to relatively minor matters, from failure to file, the organization being inactive for many years, to more serious matters, such as lacking appropriate direction and control, private benefits, and even terrorism.
These letters set out the CRA reasons for revocation of charitable status when CRA is alleging cause or that the revocation was as a result of an audit and non-compliance (as opposed to voluntary revocation or failure to file).
The CRA is only allowed to release very limited information on a deregistered charity, and only after deregistration. You can contact the former charities if you wish to obtain additional information. Keep in mind that just because the CRA alleges in a letter a particular set of facts, it does not make it necessarily correct. Many of these revocations have not been tested in court, and there have been dozens of cases in the Federal Court of Appeal challenging the CRA revocations.
Read more on this topic on the CRA’s website, here.
You can also read our article on LinkedIn here, or contact us with any questions!
ROAS = 100%
Small businesses play a pivotal role in driving economic growth, fostering innovation, and creating employment opportunities in Canada. They make a substantial contribution by shaping communities, enriching diversity, and contributing to the resilience of the Canadian economy in numerous ways.
At the Tax Mechanic it is our mission to encourage small businesses by supporting them with sound tax and financial strategies to stimulate growth.
One of our most successful tools that have helped us to grow as a business at Tax Mechanic is Facebook marketing. We have spent $250,000 over 5 years, and our return on ad spent has been 100%. (ROAS*)
Last month we received 154 leads for $21.23 cents each. Here is a screenshot from our Facebook Ads manager:
August 9 - September 7, 2023
To extrapolate that to the past 3 years, here is another screenshot:
August 8, 2020 - September 8, 2023
Not familiar with Facebook marketing? Let us show you the multitude of advantages available for small businesses seeking to expand their reach and engage with their target audience effectively. It is a cost-effective advertising platform, allowing businesses to set their budgets and reach a broad or highly targeted audience.
But not only that - Facebook's extensive user base offers an unparalleled potential for brand exposure and client acquisition. We can take you through A to Z in the process of launching your own easy to scale Facebook campaigns.
(*ROAS stands for Return on Ad Spend, and it's a crucial metric used in digital advertising and marketing to measure the effectiveness and profitability of advertising campaigns.)
The First Home Savings Account is like an RRSP on steroids when it comes to buying your first home. If this sounds interesting to you, watch the video here.