HST Real Estate: Canada CRA HST Tax Tax Rate
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Home Buyers Are Ignorant about HST in British Columbia and Ontario
I wrote about this myths about HST is causing a havoc in real estate market where HST was introduced in July 2009.
Home buyers are ignorant about HST and also real estate experts have failed to send the message about the net effect of HST to the prospective home buyers.
A recent study confirms my conclusion about HST and Real Estate market.
Canada Revenue Agency Income Tax: CRA investment
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Annual Report of Taxpayers Ombudsman
Taxpayer’s Ombudsman created little over 2 years ago to provide and independent and impartial review of individual taxpayer complaints as well as addresses any widespread service-related issue at the CRA.
As a Canadian Taxpayer if you feel like you are being mistreated by the CRA, you can take your complain to Taxpayer’s Ombudsman.
On behalf of Taxpayers, the Ombudsman will take the complaint to CRA and ask for an investigation. In some cases the result of investigation might be favourable to the taxpayer.
The Ombudsman has filed its second annual report of annual activities on October 7, 2010. The report details the cases they have intervened on behalf of the taxpayers.
You can download the annual report here.
Canada Revenue Agency Income Tax: CRA investment Tax Rate
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Tax Relief for Canadian Small Business
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Computer cost:
The Government of Canada using Taxpayers money is starting an advertising campaign promoting the 100% capital cost allowance for computers.
“We know it is important for Canadian businesses to remain competitive in today’s changing world,” said The Honourable Keith Ashfield, Minister of National Revenue, “That’s why our Government brought in measures like this one, and many others in Canada’s Economic Action Plan. These temporary measures will help Canadian businesses through this challenging economic time, and make sure they have the tools they need for the future.”
Announced in Canada’s Economic Action Plan, this temporary tax relief measure allows Canadian businesses to claim a 100% capital cost allowance deduction for eligible computer hardware, including systems software, acquired after January 27, 2009, and before midnight, January 31, 2011.
The CCA rate for computer was increased from 55% to 100% with no half year rule in 2009, as a result a full write-off can be claimed in the first tax year that CCA deductions are available.
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Apprenticeship:
A corporation can earn an input tax credit equal to 10% of the eligible salaries and wages paid to eligible apprentices employed in the business in the tax year and after May 1, 2006, to a maximum credit of $2,000, per year, per apprentice.
An eligible apprentice is one who is working in a prescribed trade in the first two years of their apprenticeship contract. This contract is registered with Canada or a province or territory under an apprenticeship program designed to certify or license individuals in the trade. A prescribed trade will include the trades currently listed as Red Seal Trades.
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Tax Credit for Child Care Space:
An employer carrying on business in Canada, other than a child care services business, can claim a non-refundable tax credit to create one or more new child care spaces in a new or existing licensed child care facility for the children of their employees and for other children in the community. The non-refundable tax credit is equal to the lesser of $10,000 or 25% of the eligible expenditure incurred after March 18, 2007, per child care space created. Eligible expenditures include the cost of depreciable property (some exclusion apply), and the amount of specified start-up costs, acquired or incurred only to create the new child care space at a licensed child care facility.
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Small Business Tax Deduction:
For Canadian-controlled private corporations claiming the small business deduction, the net federal tax rate is 11% effective January 1, 2008, down from 12%. The annual amount of active business income eligible for the reduced rate (referred to as the small business limit) was increased from $400,000 to $500,000, effective January 1, 2009.
Corporation Tax Rate Reduction:
The corporation net federal tax rate will decrease as follows:
18% effective January 1, 2010;
16.5% effective January 1, 2011;
15% effective January 1, 2012.
Generally, provinces and territories have two rates for corporate income tax – a lower rate and a higher rate.
Lower rate
The lower rate applies to either:
the income eligible for the federal small business deduction; or
the income based on limits established by the particular province or territory.
Higher rate
The higher rate applies to all other taxable income.
British Columbia corporate tax for lower rate is 2.5% and for higher rate is 10.5% effective January 1, 2010.
Canada Revenue Agency Income Tax: audit CRA Tax Fraud
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How to Face a CRA Audit?
Did you get a letter from Canada Revenue Agency (CRA), requesting supporting documents for your Income Tax Return? It does not say explicitly that you are being audited, but actually, your return has been selected for a random audit to see compliance with Canadian Tax Laws.
CRA usually have all the information regarding your income, in their database. Because by law, in Canada every company is required to send CRA a statement at the end of the year, of taxable payments they made to all employees and/or individuals.
Sometime, your income tax return may raise a audit flag for some information, or you just might be randomly selected for an audit. It should be a matter of concern for taxpayers, if you are selected for an audit. Because you don’t know, why you are being audited. After the audit, they may re assess your tax liability and send you a bill for additional taxes with fines and interest.
If your return is done correctly and you can provide all the supporting documents, usually there is nothing to worry about. Working with CRA auditors, I have personally found them to be friendly, courteous, knowledgeable and sympathetic to taxpayers.
If you want to face the CRA audit on your own, you sure can represent yourself to CRA. In that case, the auditor knows that you are not familiar with audit procedures and policies and probably you did your income tax return with off the shelf tax software. He already has advantage against you and can overwhelm you with complex questions about your tax return and in the end, send you a new tax bill.
It is always a prudent decision to work with an experienced, professional tax advisor when being audited. This decision can mean thousands of dollars savings for you and peace of mind. Consulting with a professional can be expensive, but your return on investment is many times of the money that you will spend for the advice.
A professional tax advisor who has handled audits in the past won’t be intimidated by the CRA auditors. Also, they are familiar with CRA’s audit proceeding and can answer correctly to CRA’s complex audit questions.
We have successfully represented our clients to CRA auditors and the peace of mind our clients experienced is priceless, knowing they are in good hands to deal with CRA
Canada Revenue Agency HST Income Tax: CRA Tax
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Tax Relief in Budget 2010
In his 2010 budget speech the Honourable Jim Flaherty, Minister of Finance declared “Reducing the tax burden on Canadian families and businesses through a more efficient and fairer tax system helps support Canada’s economic recovery.”
Here are some tax measures that will help families and businesses to reduce their annual tax burden:
Provide for the sharing of the Canada Child Tax Benefit (CCTB) and the Universal Child Care Benefit (UCCB) in cases of shared custody.
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