If you are participating in or thinking about a tax shelter donation program, you may actually be asking Canada Revenue Agency (CRA) to audit you. CRA is warning taxpayers that everyone participating in a tax shelter donation program will be guaranteed to get the attention of their audit team. In 2007, CRA audited 26,000 taxpayers … Read more

Incorporation is maintaining or increasing its tax edge over other business structures. The benefits go beyond simple differences in tax rates. Both federal and provincial governments (depending on the province) have announced reductions in corporate income tax rates over the next couple years to improve productivity of Canadian businesses. Although personal income tax rates declined … Read more

You’ve paid into the Canada Pension Plan (CPP) for more than 30 years. You’re 60 now and want to start collecting your pension. Well, you can – if your employment earnings are less than your CPP benefits. But there is a cost to pulling the retirement trigger early. Under the recent changes to the Canada Pension Plan, your monthly CPP retirement pension amount will decrease by a larger percentage if you take it before age 65.

If your taxable income was low or negative in a given year, don’t waste that bottom tax bracket with its nice low marginal rate. Capture it with an optional inventory adjustment – and reduce your exposure to higher marginal rates in future years. For example…

Among the many benefits of owning a small-business corporation is the option to withdraw money via routes at reduced income tax rates. If your business is incorporated, you’re in the fortunate position of having different ways to pay yourself and, in some cases, your employees and shareholders.

Lock in the CRA’s low prescribed interest rate for non-arm's length loans to benefit from income splitting with family members

There are two types of interest in this tax world of ours – deductible and non-deductible. Obviously you want as much interest payable to be deductible.

Selling some farm owners on the wisdom of investing their hard-earned dollars in anything other than their own business can be difficult. They may want to put extra funds into buying more land or marketing quota to expand their operation. Or they may feel it’s best to direct funds towards various farm improvements or to pay down debt.

While there is a suitable time for all of these on-farm investments, investing everything back into the farm is not your best move for the long-term.

If you have a portfolio of off-farm investments, you should plan to review those investments on a regular basis to ensure you are minimizing the income tax they generate. A good time to do this type of tax planning is prior to year-end, while you can still take some actions to reduce your tax.