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5 BULLET FRIDAYS - Tax Mechanic News, Tips, Strategies
Tax Mechanic
December 06, 2024
Bite-size tax and finance-related information that could save you $$$
Welcome to Tax Mechanic Insights! 📬
🌟 Overview |
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Your go-to newsletter for transforming tax troubles into triumphs. 💼 Whether you're managing personal or corporate taxes, our seasoned experts are here to guide you every step of the way. 🧑💼 Today’s edition is brought to you by Tax Mechanic – your trusted partner in navigating the complexities of the Canadian tax system. 🛠️ |
Canada Revenue Agency: Federal Tax Credits for Businesses
December 4, 2024 Ottawa, Ontario Canada Revenue Agency
The Canada Revenue Agency (CRA) offers a variety of federal tax credits designed to help your business save money. By claiming these credits, you can lower your taxable income or reduce the amount of tax you owe. Here’s a comprehensive guide to the available federal tax credits for businesses.
Federal Tax Credits for Businesses
Tax Credit | Description | Key Points |
|---|---|---|
Canada Carbon Rebate | Refundable tax credit for Canadian-controlled private corporations (CCPCs) to balance carbon pricing expenses. | Returns a portion of federal fuel charge proceeds. Payments expected by the end of the year. |
Journalism Labour Tax Credit | 35% refundable tax credit for qualifying journalism organizations. | Up to $85,000 per newsroom employee. Rate reverts to 25% after 2026. QCJO designation required. |
Foreign Business Income Tax Credit | Reduces Canadian taxes by providing relief from double taxation. | Relief for foreign taxes paid on business income. Must meet eligibility requirements. |
Environmental Trust Tax Credit | Refundable tax credit for income from qualifying environmental trusts. | Available for qualifying trusts. |
Film Tax Credits | Supports Canada’s film and television industry. | CPTC: 25% refundable credit on labour expenditure. PSTC: 16% refundable credit on Canadian labour. Certification required. |
Investment Tax Credit (ITC) | Supports specific investments including R&D and apprenticeships. | SR&ED Tax Incentives: 15% Non-refundable, 35% Refundable for CCPCs. Atlantic ITC for investments in Atlantic Canada. |
Apprenticeship Job Creation Tax Credit | Non-refundable credit for hiring apprentices. | 10% of eligible salaries. Up to $2,000 per apprentice per year. |
Manufacturing & Processing Profits Deduction | Reduces tax rate for manufacturing or processing goods in Canada. | 13% on qualifying income. |
Make sure to leverage these tax credits to support your financial goals and manage your tax obligations effectively. For more detailed information, visit the CRA's official website.
A Billionaire's Guide To Going From $4/hour to $1 Billion Net Worth - Dharmesh Shah
Issued By: My First Million
In this episode, Sam Parr and Shaan Puri sit down with Dharmesh Shah to discuss strategies for increasing your odds of hitting your first million and your next million. Dharmesh shares his journey from earning $4/hour to achieving a $1 billion net worth, offering valuable insights and lessons along the way.
Show Notes:
Time Stamp | Key Highlights |
|---|---|
3:33 | Get leverage |
9:26 | Be an asset, not a liability |
13:40 | Get closer to value creation |
19:42 | Power Negotiating |
24:35 | Dharmesh's $2M failure |
41:06 | Agents as new apps |
53:20 | Dharmesh's next big thing |
1:02:58 | Uncomfortable company values |
1:06:57 | Results-as-a-Service |
1:09:59 | Becoming a billionaire |
📋 Tax Debt Resolution & Financing Program
For Tax Debts under $100K
💼 Legal Fee- The Cost of the Buy-down of the Interest Rate to less than 10% + Service Fee (i.e., % of Total Financing Sought)
How the Program Works
📝 Initial Consultation & Assessment
Free Initial Consultation: Evaluate the client's tax debt situation (individual or business), assess CRA notices, and devise the optimal resolution strategy.
Eligibility Review for Financing: Collaboration with the Tax Mechanic to assess client eligibility for the 0% interest financing option.
🔍 Engagement & Financing Agreement
Service Engagement: Once deemed eligible, the client signs a retainer agreement with the law firm.
Financing Application: Assistance provided to the client in completing a financing application with the partner financing company.
Immediate Payout: Upon approval, 100% of the legal fees, including the total tax debt amount, is deposited directly into Lawlignment's trust account.
⚖️ Legal and Financial Management
Funds Allocation in Trust Account: Covers both the legal fees and the full tax debt payment to the CRA.
Disbursement to CRA: Lawlignment disburses the tax debt portion from the trust account directly to the CRA, ensuring timely and accurate payment. Provides clients with official receipts and confirmation of tax debt clearance.
🔧 Comprehensive Tax Debt Resolution Services
Debt Analysis & Negotiation: Development and execution of a tailored legal strategy (e.g., negotiating installment agreements, filing objections, or exploring offers in compromise).
Ongoing Legal Representation: Representation of clients in dealings with the CRA, ensuring compliance and favorable outcomes.
💳 Client’s Repayment to Financing Company
Repayment Terms: Clients repay the financing company over a 12-month period at less than 10% interest, covering both legal fees and tax debt amount.
Flexible Repayment: Options available for early repayment at no additional cost.
Claiming New Home Renovation Tax Credit May Affect Principal Residence Exemption
Source: The Globe and Mail.
Navigating the multigenerational home renovation tax credit can be tricky. According to the Canada Revenue Agency (CRA), claiming this credit could disqualify you from designating your entire home as a principal residence.
The Multigenerational Home Renovation Tax Credit: Effective since 2023, this credit allows homeowners to claim a refundable tax credit of 15% on up to $50,000 of eligible expenses for building a secondary unit. This can save taxpayers up to $7,500.
Eligibility Requirements:
Built for a family member who is 65+ or 18-64 and eligible for the disability tax credit.
Self-contained: private entrance, kitchen, bathroom, and sleeping area.
However, if two housing units are separate, only one can be designated as the principal residence, potentially leading to a larger tax bill.
Understanding the Implications: Aurele Courcelles from IG Wealth Management stresses the importance of the principal residence exemption (PRE). If a secondary unit disqualifies part of your home from PRE, you could face a tax liability.
Tax Scenarios: High-income individual with a 50% tax rate: Unable to use the PRE on $30,000 of gain, may incur a tax liability of $7,500, negating the benefits of the renovation credit.
CRA's Position: The CRA suggests that if the two units are “sufficiently integrated” and function as one, the entire property might still qualify for the PRE. This raises questions about meeting both tax credit and PRE requirements.
Alternative Considerations: Without claiming the credit, you might still face PRE issues if a family member lives in a self-contained unit. Aurele Courcelles suggests building a unit without a private entrance to better preserve the PRE.
Conclusion: Careful planning and professional advice are essential when considering the multigenerational home renovation tax credit to ensure it aligns with your financial goals.
Invest in Bitcoin Tax-Free in Canada with Fraser Simpson
In our latest video, Fraser Simpson explains how you can invest in Bitcoin tax-free in Canada using various ETFs and tax-free accounts. Learn about the benefits of utilizing TFSAs and RRSPs for your crypto investments and explore the options available to Canadian investors.
@taxmechanic Tax free investment in Bitcoin. HOW? Watch till the end... and got tax problems? just DM to book a call, we got your back... #cryptoinvest... See more
Key Investment Strategies:
Tax-Free Accounts 🏦: Use your TFSA or RRSP for tax-free growth.
Spot Bitcoin ETFs 📈: Invest directly in Bitcoin.
Low Expense Ratios 💰: Choose ETFs with low management fees.
Ethereum ETFs 🌐: Invest in Ethereum through Purpose and CI Galaxy ETFs.
U.S. Crypto ETFs 🇺🇸: Available from 2024 through brands like BlackRock.
Investment Flexibility 🔄: Hold ETFs in TFSAs or RRSPs.
ETF Comparison ⚖️: Choose based on MER, AUM, or fund age.
Follow Tax Mechanic for more tips on tax-free investments and financial strategies.
🔧 Why Tax Mechanic? 🔧 |
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Exclusive Access: Get a dedicated technician and manager. Expertise on Tap: Fraser Simpson with 35+ years dealing with CRA. AI Agents: Cutting-edge support. Community & Strategies: Join a network of tax strategies and shelters. Focused Attention: Personalized service just for you. |
And that, my friends, is it for this Friday. Have a safe and fun-filled weekend! |
Email @ [email protected] to book a free consultation call!
