If you run your own business or you are self-employed, you may be tempted to report only part of your income to the tax authorities. Or you might consider suppressing information about your activities. Read more
If you owe money to any of the tax authorities because you failed to file a return for one or more years, you can make a voluntary disclosure. Read more
One of the more common expenses claimed by taxpayers are automobile expenses (applies to any motor vehicle such as a van, bus, pickup truck, station wagon, SUV, or other truck). Many individuals use their automobile for work or business and incur personal expenses in doing so. Read more
You’re not alone; many taxpayers have found themselves in financial distress and unable to pay immediately. If you cannot pay the full amount of taxes you owe, you should still file your return (or extension) by the deadline and pay as much as you can to avoid penalties and interest.
Estate planners often suggest that the RRSP/RRIF holder designate a beneficiary of the plan. There are many advantages:
On January 1st, 2016, the LCGE increased to $824,176 of capital gains realized by an individual on qualified small business corporation shares. The LCGE has been indexed to inflation for the years following 2014. The new limits apply to any taxpayer who has claimed the LCGE previously.
For dispositions of qualified farm or fishing property, the LCGE increased to $1,000,000 on April 10, 2015.
Recently, CRA auditors reviewed municipal building permits in smaller communities. The auditors were checking for unregistered small-town subcontractors’ worksites. The result was that of the over 8,000 building permits reviewed about 33% were for unregistered building contractors. More than $4,400,000 in tax was collected.
The CRA focuses on the construction industry because it continues to be a source of unreported income in the underground economy. CRA also investigated hardware stores in more than 18 communities looking for installers that failed to report their income. CRA found that approximately only 7% of the installers were non-filers. The voluntary disclosure program is available for building contractors to bring their reporting up to date.
Talk to a Padgett office for help.
To combat unreported foreign income, the Federal Government introduced the concept that Canada Revenue Agency (CRA) will pay financial rewards to individuals who provide information on major international tax evasion. CRA could pay up to 15% of federal tax collected if the reassessments are in excess of $100,000. Penalties, interest and provincial taxes will be excluded.
Persons requesting rewards will have to meet certain requirements. For example, persons who have been found guilty of tax evasion related to their offer of information will not be eligible for the rewards.
In a Tax Alert titled “Abuse of Source Deductions and GST/HST Amounts Held in Trust” CRA warned that businesses must hold source deductions and GST/HST amounts in trust for the government. Penalties and interest and possibly personal liability for the directors will be the result if this is not done.
Federal legislation allows CRA to collect unpaid amounts through garnishments, assessments of the directors, seizure and sale of the assets of the debtor corporation, an assessed director or a sole proprietor, and any other means of recovery.
Taxpayers who have not complied with this requirement may make a voluntary disclosure to CRA. The taxpayer will not be penalized or prosecuted if valid disclosures are made before CRA begins any compliance action against the taxpayer.
Taxpayers may only be required to pay the in trust amounts owing plus interest.
If you own a business, you may have wondered if you should incorporate. Historically the income tax system in Canada has benefited incorporated Canadian small businesses. Read more