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5 BULLET FRIDAYS - Tax Mechanic News, Tips, Strategies
Tax Mechanic
June 07, 2024
Bite size tax and finance related information that could save you $$$
Dear Friend,
Do you want to get caught up with your personal taxes?
Do you have a tax problem with the CRA?
Are you years behind with your corporate taxes?
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.
Understanding the Changes to Capital Gains Inclusion Rate: What You Need to Know
In the world of taxation, capital gains are a significant consideration for individuals and businesses alike. Recently, the Canadian government announced changes to the capital gains inclusion rate, bringing important updates to how these gains are taxed. Let’s delve into what this means for you.
What is the Capital Gains Inclusion Rate?
The Capital Gains Inclusion Rate is the percentage of your capital gains that is subject to taxation. Until now, the rate has been set at one half, meaning only 50% of your capital gains are included in your taxable income. However, as per the latest budget announcement in 2024, significant changes are on the horizon.
What are the Changes?
Effective June 25, 2024, the capital gains inclusion rate is set to increase. For corporations and trusts, the rate will rise from one half to two thirds. Similarly, for individuals, the rate will also increase from one half to two thirds, but specifically for capital gains exceeding $250,000 realized in a year.
How Does This Affect You?
For individuals and entities involved in selling assets such as stocks, real estate, or other investments, these changes will directly impact your tax obligations. With a higher inclusion rate, a greater portion of your capital gains will be subject to taxation, potentially influencing your overall tax liability.
What Should You Do?
Given these forthcoming changes, it’s crucial to stay informed and plan accordingly. If you’re considering selling property or assets and want to understand the implications of the new capital gains inclusion rate, seeking professional advice is advisable.
How Tax Mechanic Can Help
At Tax Mechanic, we specialize in navigating the complexities of taxation, ensuring our clients are well-equipped to make informed decisions. Our team of experts is ready to assist you in understanding how these changes affect your financial situation and can provide tailored strategies to minimize your tax burden.
Unlocking Tax Benefits: The Power of Capital Gains
Capital gains are a powerful and often underutilized tax strategy that can help individuals and businesses reduce their tax liability while building wealth.
You can offset capital gains by selling investments with capital losses in your non-registered accounts. Also, take advantage of the preferential tax treatment for capital gains, which are typically taxed at a lower rate than interest income.
Helpful resources to stay on top of your tax game
Take Charlie on a ride but don't expect much...
Are your business taxes causing you a headache and you can’t find your way around all the different tax obligations, forms and deadlines? The CRA offers a complimentary Liaison Officer service to small business owners and self-employed individuals, offering assistance in understanding their income tax, GST/HST, and payroll responsibilities. Engaging in a virtual visit or webinar with a liaison officer is not only free but also completely confidential. Any information discussed during these sessions remains confidential and is not shared with other departments within the CRA or external entities. These sessions aim to provide personalized support, guidance, and reduce the stress associated with tax filings. Read more!
The 2nd deadly tax sin: GREED
“The second deadly tax sin is “greed”. Your sales and purchases on Kijiji, Etsy and eBay are available for all. Is your passion for vintage furniture really a hobby or are you running a small business from your living room and not declaring your profits on your tax return? “
Click here and watch my TikTok video to find out the rest!