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The Accounting Place and Croft Financial Group are working together to bring clients what they describe as the ‘future of financial services’.

By bringing in advisors from both groups, they plan to offer a fully integrated, family office experience, from financial, tax, insurance and estate planning through to the required investment accounts and portfolio management needed to put the plan into action.

For more information on this and how you might benefit, viewers can register on either website to be kept up to date with developments as they continue to roll-out ‘the future of financial services’.

The post The future of financial services first appeared on The Accounting Place.

A cash gift, or a near-cash gift such as a gift certificate, is always considered a taxable benefit and is reported as income by the employee on their personal tax return through their T4 slip.

However, non-cash gifts are treated differently. The Canada Revenue Agency has an administrative policy that exempts non-cash gifts under certain circumstances. Also, whether the employer is dealing with the employee at arm’s-length or not is an important factor.

As long as the total value of all non-cash gifts during the year does not exceed $500 per employee, the gift(s) are non-taxable to an arm’s-length employee. The value of non-cash gift(s) that exceed $500 (per employee) is considered a taxable benefit by the Canada Revenue Agency and must be included on the employee’s T4 slip.

In order for non-cash gifts to fall under this policy, the gift must be for a special occasion – such as a religious holiday, birthday, wedding, or the birth of a child.

It’s important to keep in mind that all gifts that are given to non-arm’s-length employees are taxable, whether they are cash or non-cash gifts.

Always consult with your tax professional before calculating taxable benefits related to gifts.

The post Are there any tax implications to giving a gift to my employees? first appeared on The Accounting Place.

As with all taxation, planning becomes of the utmost importance to ensure that you do not pay one nickel more in taxes than is absolutely necessary under the legislation.

Rental, Royalties, Interest Income

These types of Passive Investment Income earned inside a CCPC are Part I tax and will be taxed at a Federal rate of 38.67%. Of the 38.67%, the CCPC will receive a “Refundable Dividend Tax on Hand” credit (RDTOH) of 30.67% when a taxable non-eligible dividend is paid out to the shareholders.  This results in a net corporate tax of 8%.  In addition, provincial governments will also tax this income at their respective general tax rate.  In Ontario, this is 11.5% resulting in an up-front tax of 50.17% and a net tax of 19.5% inside the CCPC.

Portfolio Dividends

Dividends earned within a CCPC paid by a public corporation are “eligible dividends” and are taxed as Part IV tax.  Part IV tax is a Federal tax only with a rate of 38.33%. Much like “non-eligible dividends”, Part IV tax becomes a “Refundable Dividend Tax on Hand” (RDTOH) which is refunded to the corporation when a taxable dividend is paid out to the shareholders. The RDTOH is also 38.33% resulting in a net tax of zero. Provincial governments do not tax “eligible dividends” therefore there is zero provincial tax implications.

The net result in that although a CCPC will pay tax of 38.33% on eligible portfolio dividend income, the entire tax is refundable once a taxable dividend is paid to the shareholders.  From a purely tax point of view, this makes dividend income producing investments attractive.

Capital Gains

Capital gains/losses earned within a CCPC are Part I tax and subject to the same tax rates.  The difference however, is that Capital Gains are taxed on only one-half of the gain and only one-half of any losses are allowed.  This results in the Federal tax rate becoming one-half of the Part I tax rate – 19.34% of which 15.34% is eligible for the Part I RDTOH leaving a net federal corporate tax of 4%.  In addition, provincial governments will also tax one-half of this income at their respective general tax rate.  In Ontario, this is 5.75% resulting in an up-front tax of 25.09% and a net tax of 9.75% inside the CCPC.  The “untaxed” 50% portion of accumulated capital gains less losses can be paid out to the shareholders through the Capital Dividend Account and will not be subject to tax – either corporate or personal.

Planning & Structure

As with all tax issues, planning and structure become the most important factor in minimizing the amount of tax paid through the combined family and corporate entities.  By putting a structured plan in place in combination with your investments, the impact of the new tax rules can be minimized and controlled.

The post Passive Income in a CCPC first appeared on The Accounting Place.

• Minimum Wages will increase 32 percent over the next 13 months as follows:
  

Personal Emergency Leave – January 1, 2018
Employees are entitled up to Ten (10) days of personal emergency leave (PEL) per calendar year after one week of employment. The first two days must be paid at the regular rate.
PEL can be taken for:

• A personal illness or medical emergency
• The death, illness, injury or medical emergency of a family member or person the employee considers a family member.
• An urgent matter concerning a family member or person an employee considers a family member.

NOTE:  As an employer, you are not allowed to request a doctor’s note as proof for the leave.

Vacation – January 1, 2018
All employees who have worked with your company for at least five years will be entitled to three weeks vacation.  Vacation pay will be calculated at six (6) percent for employees who have five or more years with your company.

Substitute Public Holidays – January 1, 2018
Employees must be given with written notice of substitute public holidays. The notice must include the holiday on which the employee will work, the date of the day being substituted for the holiday, and the date on which the notice is provided to the employee.

Enforcement – January 1, 2018
The Ontario government will hire additional employment standards inspectors by 2020-2021 to ensure the new rules are followed.

The post Minimum Wage & Labour Changes first appeared on The Accounting Place.

In order to qualify as a deductible expense, the self-employed or commissioned salesperson must be able to demonstrate that the amount paid was incurred for the purpose of earning income and is a requirement under their conditions of employment. Such expenses may include:

• meals eaten with customers
• the cost of tickets for a theatre, concert, athletic event or fashion show
• the cost of private boxes at sports facilities
• the cost of cruises
• the cost of entertaining guests at clubs (night, social, and sporting)
• taxes, gratuities, and cover charges

The following meals and entertainment expenses are examples that do not qualify:

• costs incurred for use of recreation facilities and club dues
• purchase of season tickets for sporting events (unless satisfactory proof is provided that the tickets are a promotional expense)
• meals claimed while outside a sales territory or on a vacation
• meals taken after a golf game (at the club house)

Generally, the Canada Revenue Agency (CRA) permits a deduction of 50% of the cost of meals and entertainment but there are exceptions to this rule. For example, if the business of the taxpayer is to provide food, beverage or entertainment then the costs of promotional samples is not restricted to 50%. Also, the cost of meals, beverages and entertainment provided on planes, trains or busses are not subject to the 50% deduction rule.

Always consult your tax professional before claiming meals and entertainment expenses on your tax return.

The post Can I deduct my meals and entertainment expenses? first appeared on The Accounting Place.