Is your corporation a personal services business? If you are the sole individual working in your corporation, you may be carrying on a personal services business (“PSB”). More and more small corporations are being labeled as personal services businesses by Canada Revenue Agency (“CRA”). The results of this can be disastrous. Personal service business What…

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Being close to the border, we get lots of calls from Americans who plan to do business in Canada.  Here are some of the basic issues you need to understand. Canada – US Tax Treaty A tax treaty exists between our two countries to address tax issues.  The treaty defines, among other things, the jurisdiction…

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Cash flow is the movement of money into and out of a business or project. Cash flow is imperative to the success of any business. However, many small businesses owners don’t fully understand how important it is to estimate, track, and analyze cash flows. If cash flow is not managed correctly, a company may run…

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Automobile expense rules can be really complicated, especially for company owned vehicles because of the limitations on depreciation, lease and interest expenses and the need to think about taxable benefits that might accrue to the driver of the vehicle. Automobile expenses tend to require lots of administration and present significant tax risk because CRA views…

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You may be the envy of your neighbours as you spend your endless summer days working on your chip shot instead of chipping away at the ice on your driveway, but did you know that by flying south for the winter you may be increasing your income tax compliance obligations? Residency You are a resident…

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Are you considering renting out a portion of your home? There may be some tax implications to consider – both for now and in the future. Principal residence exemption Often, when you sell your “principal residence” there is no resulting tax implication. This is because of the principal residence exemption, which allows an adjustment to the…

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We often get asked about how to deal with home office expenses for your incorporated business. While there are a few different options, here’s the best way we’ve found to do it. If you have a separate and distinct part of your home you have devoted exclusively to business use, you can deduct home office…

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Most small business owners eventually face the question of whether or not to incorporate their business by creating a limited liability company or “corporation”. Owners of small business corporations enjoy preferential tax treatment in Canada in the form of lower corporate tax rates, tax-free status on sale of small business shares and access to certain…

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