Tuesday, November 8, 2011

2010-2012 RRSP Contribution Limits

Once again at this time of the year, if not already underway, we need to consider RRSP contributions for the 2011 year.  This link provides a brief article on the limits for contributions set by Canada Revenue as well as deadline information.  As always, if you need assistance with RRSP planning, or to consider all of your options we will be happy to hear from you at (905) 881-6257.  To see this article in full please use this link to our website http://www.liwanpo.com/taxes_personal.php 
and look for the first article 10-12 RRSP Contribution Limits listed in red font

Wednesday, July 20, 2011

Should you incorporate?

Deciding to incorporate?
We are often asked for advice relating to the incorporation of a small business.
Incorporation is a business structure available to you to conduct your business activities. A corporation is a legal entity and is considered to be a separate person for tax purposes – it has to prepare its financial statements and file its own corporate tax returns with CRA.
Benefits of incorporation
1.  You are able to creditor proof your personal assets. You can limit your personal liability through incorporation by keeping your personal and corporate assets separate. Personal assets of the shareholders are not available to the creditors of the corporation. One exception would be where shareholders are required to give personal guarantees to banks, for instance.
2.      Deferral of taxes. Most small Canadian corporations are taxed at a  low rate of 15.5 % on the first $ 500,000 of active business income whereas individual tax rates can be as high as 46%. The low rate of tax provides the business with the opportunity to defer taxes until the funds are withdrawn from the corporation. The corporation has the incentive to retain surplus funds, for growing its business.
A corporation can also deduct accrued salaries or bonuses in its fiscal year even though paid out after the year end provided that payment is made no later that 179 days after the year end– corporate taxes are thus deferred to the following year.
3.      A $750,000 capital gains exemption is available on the sale of the qualified small business corporation shares.
4.   Different share classes may allow you to split income with family members, thereby reducing your tax burden. 
1.       The costs of setting up a corporation and of preparing financial statements and tax returns
2.      Losses are trapped in the corporation and can only set used to offset future income from the corporation. They are not available for setoff against your personal income.

The general rule is not to incorporate until the business is profitable. You should always seek professional advice before you incorporate.

Thursday, July 7, 2011

Retail Sales Tax on Insurance Premiums Post HST (Ontario Canada )

We have had several inquiries from clients regarding the application of the Retail Sales Tax since the implementation of the Harmonized Sales Tax (HST) in Ontario, Canada.

There is some confusion regarding Insurance Premiums which still attract sales tax at varying rates.  To put it simply, the Retail Sales Tax remains in effect and is, in fact unchanged, despite the implementation of the HST in July of 2010 in Ontario.  So, if RST applied prior to the implementation of HST, then it still applies currently.  However, Retails Sales Tax on insurance premiums is not part of the HST tax process and CAN NOT be used for Input Tax Credits for HST.

For more detailed information on this and other tax related matters, please visit our website at


Monday, March 14, 2011

Moving Expenses - are you missing out?

Are you missing out?  Did you know that if you move and establish a new home to be employed, carry on a business or attend full time education, you can claim moving expenses? In this article we cover the opportunities, rules and guidelines for claiming expenses not reimbursed, which you incur as a result of moving.   The article covers a full range of details covering the following topics:
- Eligible Moving Expenses
- The Rules
- Expenses you can deduct
- When your old residence is sold as a result of your move
- If your spouse or common-law partner sold the old residence
- Incidental costs related to the move 
- Costs to  maintain your old residence while vacant
- Expenses you can not deduct
- Mobile Homes
- Moving outside Canada

To read this and other tax information articles in full, please use the link to our website Jacques Link to  tax articles page http://www.liwanpo.com/resources_tax_news.php
   link to our website tax articles in full

Thursday, January 27, 2011

Update for Canadian Investors

As we review 2010, one is struck by the divergence between the year’s gloomy headlines and the generally positive results shown by the financial markets. Some of the challenges facing the global economy during the year included the effects of the major oil spill in the Gulf of Mexico and ongoing concerns that some European governments will default on their debts. These joined lingering problems in the U.S. economy, including high unemployment, slow growth and an expanding government deficit. Nonetheless, many of the world’s major stock and fixed-income markets made gains during the year.

In Canada, the S&P/TSX Composite Index was up 13% in 2010 and benefited from strength in commodities such as gold, oil, copper and potash to become one of the world’s best-performing markets. U.S. equities also moved up, with sectors such as industrials and consumer discretionary products among the leaders. It’s worthwhile to note that those sectors are cyclical – they perform best during a period of economic growth. Overseas, equities in emerging markets and Asia also rose, while European stock markets were mixed. Equity indexes in those countries with the biggest debt problems were down for the year.

Why have so many markets rallied despite what seems to be an inhospitable environment? Stock markets are a leading indicator – they tend to anticipate future developments rather than reflect what is happening now. Judging by the results of the past year, equity market investors are expecting continued recovery and growth.

Indeed, there are several factors supporting a positive outlook. The economy has continued to grow in all major regions of the world in 2010, including Europe. Although government and consumer debt levels are a concern, many corporations are in good shape, with strong balance sheets. This has left them well positioned to take advantage of some of the key trends in the global marketplace – such as the robust growth in emerging markets. Bond markets are also pointing to a strengthening economy, as indicated by the increase in U.S. bond yields in the fourth quarter.
Of course, events may conspire to change this outlook. That is why I suggest  having a diversified portfolio tailored to your individual circumstances, and maintaining a long-term view for your equity investments.

Tuesday, January 11, 2011

IMPORTANT: Buy Business equipment by Jan 31/11 - 100% Write Off

Electronic equipment
You can write off 100% of the cost of computers.The accelerated capital cost allowance (CCA) for eligible computers announced in the 2009 budget allows businesses to claim 100% of computer costs (including systems software) purchased after January 27, 2009 and before midnight, January 31, 2011.
To qualify for this rate, the asset must also:
- be situated in Canada
- not used or acquired for use for any purpose before acquired by the taxpaper
- acquired by the taxpayer
- for use in a business carried on by the taxpayer in Canada or for the purposes of earning income from property situated in Canada
- for lease by the taxpayer to a lessee for use by the lessee in a business carried on by the lessee in Canada or for the purpose of earning income from property situated in Canada