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Small Business Accountant in Oakville, Burlington

Successful, happy & wealthy small business owners & their accountants

How do small businesses achieve high profitability?

When small business owners who had achieved substantial success in growing their business either through acquisition, inheritance or as a start-up were asked about the key resource that led to their achievements, mostly pointed out the selection of a good accountant and more specifically accountants with the below-mentioned qualities:

    1. An advisor and a business partner
      Their accountant partnered with them in driving the strategy and plan of the business through well-constructed business plans and monthly face to face sessions supported by valuable data analysis rather than simply recording the transaction and filing taxes once a year.
    2. Monthly Financial Statements.
      Their accountants worked with Accounting systems like QuickBooks Online and processes that enabled them to generate monthly Profit & Loss, Balance Sheet, Cash Flow and Bank Reconciliation statements, and recently providing data in real-time through systems based on cloud computing and assisted by artificial intelligence. Monthly Financial Statements also help a small business to plan proactively towards their profit goals and tax strategy.
    3. Expert planner and strategic mindset
      The accountant had adequate experience and professional background to think strategically and provide long term business plans, structures on pricing, volume analysis, sales channels selection, fixed and variables cost analysis and precise calculation of taxes.
    4. Advance Tax Planning
      A valuable by-product of monthly financial statements and meetings and a strategic mind set enable the business owners to discuss and execute tax strategies fairly in advance and enable substantial savings.
    5. Cash flow focused
      Monitoring and projecting advanced cash flow is like monitoring the lifeblood of the business, profits do not necessarily translate into much-needed cash. Close monitoring of Bank reconciliations monthly if not daily is another key process good accountants and businesses follow.
    6. Analytical
      A most appreciated trait of an accountant leading to good advice and follow up was an analytical mind, trained to generate and interpret pertinent information, backed by timely advise and ability to spot any telling signs of trends that would otherwise escape the layman.
    7. Professionally qualified & knowledgeable
      A professionally qualified and trained accountant such as a Chartered Professional Accountant (CPA) has valuable traits that allow them to maintain high professional standards and ethics, in addition to a deeper understanding of numbers, rules, regulations and laws.
    8. Works with the latest technologies
      Technology is developing at an astonishing rate, with cloud computing, artificial intelligence and blockchain technologies forming a substantial part of the accounting ecosystem, your accountant must be comfortable working with these technologies to help you grow your revenues faster, track costs better, help choose the right inventory systems etc.
    9. Access to other small business service providers
      Small business owners need access to the same professionals that their larger counterparts use to run their business i.e. bankers, foreign exchange traders, lawyers, wealth managers to name a few. Great accountants usually partner with these professionals, especially those catering to small businesses and should be able to refer them to their clients when needed.
    10. Cost management and Investment monitoring
      A good accountant knows the delicate balance that the small business owner must maintain between cutting wastages and investing to boost future revenues when needed. Helping the small business owner to measure the cost of those additional investments or impact of reducing costs.
    11. Succession Planning
      Small business owners at a certain stage of the business life cycle face the decision to go public, name heirs to the business or sell it. A professional accountant helps with the selection of professional valuation firms, the IPO process, or simply transit the business legally and financially to the heirs.
    12. Corporate Structuring
      As a business partner who has access to the market and the inner workings of other successful businesses, the accountant is usually in a position to recommend changes to the business that would further boost the growth of stem any leakages of revenue.
    13. Debt Planning
      At a certain stage of growth, all businesses especially start-up require access to banking channels, debt markets, and other lenders to either enhance capital or borrow short and long terms. A great accountant has connections in the market place to recommend and access these funds.
    14. Acquisition as a growth strategy
      In some instances, the small business hit a plateau in terms of growth where the organic business growth strategy simply is not an option. An accountant has usually during their career worked on acquisition in terms of due diligence, purchase, bedding the acquisition or handled the complete cycle and is therefore in a good position to work with a team of professionals to identify the right fit for their client.

Clearwater Professional Corporation based out of Oakville, Ontario is one such firm that has focused completely to help small businesses generate positive cash flows and achieve above-average profit levels.

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Income tax preparation oakville

The Dividend Series – Dividend, Investment Income & Taxation – Part A

We will commence with some key definitions for a better understanding of the contents.

Ask any Canadian what a dividend is and, if they don’t know, they’ll at least say it’s something positive. For the most part, they’d be right.

Dividends are distributions of a corporation’s after-tax earnings to its shareholders. They’re optional to distribute, but corporations often use them to entice or pay shareholders.

Dividend taxation can be confusing, but it’s part of our tax system’s theory of integration: the idea that an individual should pay the same amount of tax whether income is earned personally or through a corporation.

Consider that corporations are distributing earnings that they’ve already paid tax on. For the sake of fairness, dividends are subject to a special gross-up and tax credit calculation. When an individual receives a dividend, the amount received is grossed-up to a higher amount, depending on the type of dividend, to approximate the tax the corporation has paid. Personal tax is then calculated on this grossed-up amount. To compensate for this, individuals can claim a dividend tax credit, which reduces their tax otherwise payable.

The theory of integration doesn’t usually work out precisely as intended, with individuals either realizing tax savings or paying a tax cost from corporate earnings paid out as dividends.

Assume Martha is in a 35% tax bracket and invests in shares of Manfco, a public company. Manfco earns $1,000 and pays corporate tax at a rate of 26.5% in Ontario. Martha has received a $735 eligible dividend from Manfco, which nets Martha less than earning $1,000 personally.

Table 1: Dividend income versus regular

Eligible dividend Regular income
Original intended payment $1,000 $1,000
Less: Corporate tax paid @ 26.5% $265 N/A
Proceeds $735 $1,000
Less: Tax owed $355 (35% of grossed-up amount, which is $1,014.30*) $350 (35% of income)
Plus: Dividend tax credit $254 (25.02% of grossed-up amount, as per the Income Tax Act) N/A
Final proceeds $634 $650
Total tax cost $366 ($101 personal** and $265 corporate) $350

*$735 x 1.38, since eligible dividends are grossed up by 38%.
**$101 = $355 – $254

Planning ideas

  • In Ontario, a person can earn up to $35,000 in non-eligible dividends, or $50,000 in eligible dividends and pay no tax (other than health premiums) as long as they have no other income.
  • A shareholder doesn’t have to do anything to receive dividend income other than invest in shares, so a corporation doesn’t have to give the person voting power or management responsibility. By contrast, other income-splitting measures, such as paying a salary to family members, are subject to reasonability tests for tax purposes, which is potentially a disadvantage.
  • Many income-splitting opportunities, such as those involving family trusts, are based upon the payment of dividends to family members with lower income levels.
  • If a person is entitled to a spousal tax credit, dividend income can sometimes be transferred between spouses on their tax returns to minimize tax.

Planning pitfalls

  • For seniors receiving old age security benefits, the dividend gross-up system can cause the loss of benefits if the dividend gross-up causes a senior to have income above the claw back threshold.
  • Dividend income doesn’t create RRSP room.
  • The payment of a dividend by a corporation is not a deductible expense to the corporation, while salary income is.
  • Dividend income isn’t helpful to an individual who wants to claim childcare expenses as a tax deduction, since dividends are not considered earned income for that purpose.
  • Minimum tax (see AE, March 2017) can sometimes be triggered when an individual has significant dividend income, since dividends are taxed at a more preferential rate than other forms of income.
  • Keep in mind that tuition credits must be fully claimed before dividend tax credits, and unused dividend tax credits cannot be carried forward.

Types of dividends

Eligible dividends
Dividends declared from earnings that were taxed at the general tax rate. Shareholders must be notified that a dividend is eligible at the time of payment, whether through website information for a public company or through letters to shareholders for a private company. For the 2016 tax year, eligible dividend income is grossed-up by 38% on an individual’s tax return. The top marginal tax rate on eligible dividends in Ontario is 39.34%.

Non-eligible dividends
Dividends declared from earnings taxed at the small business tax rate. For 2016, non-eligible dividend income is grossed-up by 17% on an individual’s tax return. The top marginal tax rate on non-eligible dividends in Ontario is 45.3%.

Capital gains dividend
A distribution by a Canadian mutual fund of its capital gains. Since the distribution is actually a capital gain, only half of the capital gain distributed will be subject to tax on an individual’s tax return.

Foreign dividend
Dividends from foreign corporations received by Canadian residents are considered to be foreign income, not dividends, for tax purposes. Foreign income is taxed at the same rates as salary or interest

What is Refundable Dividend Tax on Hand (“RDTOH”)?

RDTOH is a mechanism built into the income tax system in order to achieve integration. This concept ensures that income tax payable on investment income is essentially the same whether earned in a corporation and flowed out to its shareholder(s) or earned personally by the shareholder(s), i.e. where in the current environment investments are held in the company name and income is not paid as dividends but reinvested , benefiting the shareholder through deferred payment of taxes at lower small business corporate tax rates.

The RDTOH can be viewed as an account that accumulates refundable tax paid by a private company on its investment and dividend income. Investment income (including interest, rents, royalties, and the taxable portion of capital gains) earned by a Canadian Controlled Private Corporation (“CCPC”) is taxed at approximately 50%. A portion of this tax (calculated as 30.67% of taxable investment income) is added to the RDTOH account. In addition, taxable dividends (often referred to as “portfolio” dividends) received by a CCPC are subject to a refundable tax (Part IV tax) at a rate of 38.33%. The full amount of Part IV tax is also added to the RDTOH account. (Note that dividends received from connected corporations can, in certain instances, also attract Part IV tax.) Amounts in the RDTOH account are refundable to the corporation when a taxable dividend is paid to a shareholder at the rate of $1 of refund for every $2.61 of taxable dividends paid. The refunds are commonly referred to as “dividend refunds” and are deducted from the RDTOH account.

RDTOH should be taken into consideration in any concept comparing an insurance strategy to a corporate owned alternative investment.

The current RDTOH rules

To ensure that there is no advantage for an individual to earn investment income (e.g. interest, dividends, rental income, etc.) in a CCPC, instead of directly, a refundable tax is levied on that corporate investment income, in addition to regular corporate income tax. Accordingly, a corporation’s up front tax paid is approximately equivalent to the taxes that would be paid by an individual earning that income directly.

This refundable tax is tracked in a corporation’s RDTOH account. The refundable tax is recovered by the corporation only when a taxabledividend (eligible or non-eligible) is paid or deemed to be paid to the individual shareholder(s) of the corporation. This refund of tax is referred to as a dividend refund.

Eligible dividends are distributed from a corporation’s general rate income pool (GRIP) and are subject to a lower individual tax rate.

The table below illustrates the tax savings of paying an eligible dividend as opposed to paying a non-eligible dividend in 2019 (based on top combined federal and provincial/territorial dividend tax rates).

General rate income pool (GRIP)

A Canadian-controlled private corporation (CCPC) or a deposit insurance corporation may pay eligible dividends to the extent of its general rate income pool (GRIP) and no excessive eligible dividends were incurred under Part III.1 tax. The GRIP is calculated at the end of the tax year. However, a corporation can pay eligible dividends over the course of the year as long as, at the end of the year, the eligible dividends paid do not exceed its GRIP.
The GRIP is a balance that generally reflects taxable income that has not benefited from the small business deduction or any other special tax rate.

Use Schedule 53, General Rate Income Pool (GRIP) Calculation, to determine the GRIP and file it with your T2 return. You should file this schedule if you paid an eligible dividend in the tax year, or if your GRIP balance changed, to ensure that the GRIP balance on our records is correct.

You can view GRIP balances using the “View return balances” service at:

Coming Next……..What does the Future Hold ?…..Part B of the dividend series

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Business Tax Accountant Oakville & Burlington

The dividend series – Dividends, Investment Income & Taxation – Part B

What does the future hold?

For taxation years beginning after December 31, 2018, all Canadian controlled private corporations (CCPCs) earning investment income must consider a new set of complex rules relating to their refundable dividend tax on hand (RDTOH) balances. These rules could increase the tax costs to individuals when distributing corporate funds from their private corporations. Before January 1, 2019, taxpayers will need to review their companies’ RDTOH balances to determine whether planning is required.

The new RDTOH regime

The 2018 federal budget announced new measures that restrict the ability to recover RDTOH through the payment of eligible dividends, with limited exceptions. This means that the cost of extracting profits from a CCPC may go up for the typical owner-manager.
Effective for taxation years beginning after December 31, 2018, the existing RDTOH account will be segregated into two new accounts:

  •  a non-eligible RDTOH (NRDTOH) account will track the refundable (Part I) taxes incurred on investment income earned (including taxable capital gains), and any refundable (Part IV) taxes on dividends received (net of Part IV taxes tracked in the eligible RDTOH [ERDTOH] pool)
    A refund of the NRDTOH will only be available upon the payment of non-eligible dividends. In all provinces these dividends are taxed at a higher rate than eligible dividends.
  • an ERDTOH account will track refundable (Part IV) taxes paid on eligible dividends received from corporations that are not connected,1 as well as eligible dividends received from connected corporations to the extent that these dividends triggered a dividend refund to the payor corporation
    A refund of the ERDTOH account will only be available upon the payment of eligible dividends.
    The existing RDTOH balance will be added to the NRDTOH account except for the transitional amount.

2019 transitional RDTOH amount

A CCPC’s opening ERDTOH account will have a one-time addition equal to the lesser of:

  • its existing RDTOH balance
  • 38.33% of the CCPC’s GRIP balance
    As a result:
  • the corporation’s GRIP balance must be at least 2.6 times the existing RDTOH pool in order for the entire RDTOH balance to qualify as ERDTOH, and
  • if the company has an RDTOH balance, but has no GRIP balance, all of the RDTOH will be added to the NRDTOH account

How can your accountant help with the planning strategy?

These new rules will impact taxation years commencing in 2019. To prepare for the change, you should discuss with your adviser whether:

  • it is possible to move the GRIP and RDTOH balances into the same company to maximize the addition to the ERDTOH account (for example, if a company has RDTOH but no GRIP, determine if the GRIP in a lower-tiered company can be moved to the higher-tiered company)
  • there is a plan to distribute corporate funds to individual shareholders in the next few years because there may be an advantage to speeding up the distribution before 2019 to realize a lower effective tax rate
  • for companies with GRIP, but limited RDTOH, it may make sense to trigger investment gains to create an ERDTOH account that can be used for future distributions

The 2018 Federal Budget confirmed the Canadian government’s intent to address Canadian controlled private corporations (CCPC) that earned significant investment income by targeting the Refundable Dividend Tax On Hand (RDTOH) regime. RDTOH is created from passive income earned by a CCPC and as implied in the name, is refunded to the corporation upon payment of taxable dividends. Investment income subject to the RDTOH regime is typically not added to a CCPC’s General Rate Income Pool (GRIP) from which eligible dividends are paid.

Under the historical RDTOH rules, an eligible dividend paid by CCPC could allow for a refund of RDTOH. This provided an opportunity to pay eligible dividends and still recover RDTOH created from investment income, which did not accrete to the CCPC’s GRIP from which the eligible dividend was paid. The eligible dividend would then be taxed at approximately 39 per cent personally rather than the approximate 46 per cent rate for non-eligible dividends (highest personal dividend tax rates in Ontario). Therefore, the individual is subject to a lower personal tax rate in comparison to receiving a non-eligible dividend that would otherwise be paid from passive investment income earnings, and the corporation continues to enjoy a RDTOH refund.

Under the new rules introduced in the 2018 Federal Budget, the existing RDTOH account will be split into eligible RDTOH and non-eligible RDTOH pools. RDTOH created from passive income will accrete to a CCPC’s non-eligible RDTOH account. This will be the case with most passive income apart from eligible dividend receipts. Only non-eligible dividends will result in a refund of non-eligible RDTOH balances. Further, ordering rules will also provide that amounts cannot generally be refunded from a CCPC’s eligible RDTOH account until the non-eligible RDTOH balance has been fully refunded. The character of RDTOH paid on dividends received from a connected corporation would match their payer’s eligible/ non-eligible RDTOH accounts.

The above rules will apply to taxation years beginning on or after January 1, 2019 and transitional measures have been included to compute the opening eligible RDTOH and non-eligible RDTOH balances of a CCPC. The eligible RDTOH balance will be calculated as the lesser of:

  • The existing RDTOH balance at the time of the transition; and
  • 38 1/3 per cent of the GRIP balance, at the time of the transition

Once the above allocation has been calculated, any remaining RDTOH would be allocated to the non-eligible RDTOH pool. Budget 2018 alludes to the fact that existing RDTOH should not be negatively affected on transition and should be in the eligible RDTOH pool. However, the transition rules included in the legislation create a problem.

How does this change play out?

For example, let us assume that Mr. A owns 100 per cent of his holding company (“HoldCo”) and the HoldCo owns 100 per cent of an operating company (“OpCo”). Furthermore, let us assume that OpCo has a GRIP balance of $10,000,000 and RDTOH of NIL while HoldCo has a RDTOH balance of $2,000,000 and no GRIP.
On transition, HoldCo will have its eligible RDTOH balance calculated as the lesser of:

  • The existing RDTOH balance at the time of the transition ($2,000,000); and
  • 38 1/3 per cent of the GRIP balance, at the time of the transition ($NIL)
    Therefore, HoldCo’s entire RDTOH balance will be included in the non-eligible RDTOH pool and block any refund of RDTOH when GRIP dividends are paid from OpCo through HoldCo to the individual shareholder. As a result, there is no transitional relief on HoldCo’s RDTOHearned before the new legislation became law.

How to plan for transition

A simple planning decision, that can be undertaken prior to the new regime coming into effect, is to pay an eligible safe income dividend to cause the GRIP balance in HoldCo to equate to the RDTOH balance in HoldCo. To continue our previous example, OpCo would pay an eligible safe income dividend of at least $5,217,392 prior to the transition. On transition, the eligible RDTOH balance of HoldCo will now be calculated as the lesser of:

  • The existing RDTOH balance at the time of the transition ($2,000,000); and
  • 38 1/3 per cent of the GRIP balance, at the time of the transition ($2,000,000)

The resulting eligible RDTOH balance of HoldCo will now equal at least $2,000,000 with no amounts added to HoldCo’s non-eligible RDTOHpool. Accordingly, eligible dividends can continue to be paid from OpCo through HoldCo to the individual shareholder and still provide for a refund of HoldCo’s RDTOH balances.

Taxpayers should examine their corporate structures prior to the rules coming into force on January 1, 2019 to determine potential planning opportunities.

Corporate RDTOH Planning Opportunities

Currently, through the operation of the refundable dividend tax on hand (RDTOH) rules, a portion of the tax paid on passive income earned by a private corporation is refunded when the corporation pays dividends. The refund is available regardless of whether the dividends paid are eligible dividends (generally from active business income taxed at the general income tax rate) or non-eligible dividends (generally from passive investment income and active business income taxed at the small business tax rate).
As of January 1, 2019, changes to the RDTOH rules will limit the dividend refund to
(1) noneligible dividends paid by the corporation and
(2) Part IV tax on eligible portfolio dividends received by the corporation. What Planning Should You Consider Undertaking in 2018? If a corporation is planning to sell corporate assets in the near future or it has a holding corporation/operating corporation (Holdco/Opco) structure, there are two options that should be considered in 2018 to plan for the RDTOH rule changes.

  • Where possible, corporate asset sales planned within the next year or two should be completed before the end of 2018 in order to maximize the corporation’s RDTOH balance at 2018 year end. Due to a transitional rule, a corporation’s existing RDTOH balance at 2018 year end will be allocated to its eligible and non-eligible RDTOH balances for the 2019 taxation year.
  • Where a Holdco/Opco structure is in place and Opco has a balance in its general rate income pool (GRIP) and Holdco has RDTOH but low or no GRIP, consideration should be given to whether eligible dividends should be paid by the Opco to the Holdco in 2018 in order to maximize Holdco’s 2019 eligible RDTOH balance.

Non-Eligible Dividend Tax Credit Rates and Amount of Dividends That May be Received Without Incurring Tax in 2018a Current to: April 30, 2018

Actual Dividend Taxable Dividend Actual Dividend
Federal 11.64% 10.03% $30,733
British Columbia 2.40 2.07 22,334
Alberta 2.41 2.07 20,562
Saskatchewand 3.87 3.33 20,290
Manitoba 0.91 0.78 10,292
Ontarioe 3.62 3.12 30,733
Québecf—Amounts received before March 28, 2018 8.18 7.05 24,417
Amounts received after
March 27, 2018
7.28 6.28 22,261
New Brunswickg 3.31 2.85 18,650
Nova Scotia 3.67 3.16 16,699
Prince Edward Island 3.36 2.90 14,841
Newfoundland & Labrador 4.06 3.50 19,678
Northwest Territories 6.96 6.00 30,733
Nunavut 3.20 2.76 30,733
Yukon 2.62 2.26 15,747


*A table for 2019 will be added in Summer 2019.
This table assumes only “non-eligible dividend” income is earned and takes into account all federal and provincial taxes, surtaxes, and alternative minimum taxes, but does not include provincial premiums. The respective basic personal and dividend tax credits and provincial tax reductions, where applicable, are also included.“Non-eligible” dividends are those that are not subject to the dividend rules applying to “eligible” dividends (see table I-6). The gross-up rate for non-eligible dividends is 16%. The actual amount received is therefore multiplied by 1.16 to determine the taxable amount of the dividend.
A The federal and provincial dividend tax credit (DTC) rates in the table’s first column apply to the actual amount of the dividend received by an individual. The DTC rate can also be expressed as a percentage of the taxable dividend, as indicated in the table’s second column.
B The federal DTC rate that applies to non-eligible dividends decreased to 10.03% (from 10.52%) of taxable dividends beginning January 1, 2018. The dividend gross-up factor that applies to non-eligible dividends also decreased to 16% (from 17%) beginning January 1, 2018.
C Ontario decreased the province’s DTC rate that applies to non-eligibledividends to 3.12% (from 4.29%) of taxable dividends effective January 1, 2018.

Coming Next……..

The Federal Dividend Tax Credit in Canada…. Part C

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Canadian Tax Year 2018

As 2018 draws to a close, it’s a good time to meet with your accountant and have an informed discussion about maximizing tax savings for the past year. Small business owners, in particular, have many opportunities to save on their yearly taxes, so take a few minutes to review your options with an expert before 2018.

In this blog, we’ll take a look at some of the changes in tax provisions that will affect individuals and small businesses below:

Eligible Deductions & Credits

If you pay the following expenses by December 31, 2017, they will be eligible for the deductions of tax credits. In other words, you’ll have to pay less for the past tax year:

  • Childcare expenses
  • Moving expenses
  • Investment council fees
  • Charitable donations
  • Accounting fees
  • Medical expenses
  • Tuition fees
  • Deductible support payments
  • Political donations
  • Interest paid on loans used to purchase investments

Contribute to Your RRSP

The most popular tax tool available to the average person is investing in a Registered Retirement Savings Plan (RRSP). Contributions to RRSPs are tax deductible and the income earned within the RRSP grows until you retire — with taxes deferred. You can claim a contribution of up to 18% of your earned income from 2016 (to a maximum of $26,010).

Earned income includes the following sources:

  • Employment income
  • Business income
  • Net income from rental properties
  • CPP disability pension
  • Certain types of royalties
  • Spousal or child support payments that are included in your income

Remember that your contribution limit may be subject to a pension adjustment reversal from 2016. So if your employer is making contributions to a pension plan, or actuarial commitments to such plans in the year 2016, then these will be reflected in this pension adjustment.

It is also important to remember that the age limit for RRSP contributions is 71. The age limit for converting an RRSP to an annuity or RRIF is also 71.

Finally, don’t overcontribute — a severe penalty will result. If you have any questions about RRSP contributions, talk to a professional accountant today.

Capital Gains Exemption Deduction

The Lifetime Capital Gains Exemption Deduction applies to individuals who dispose of shares in a qualified small business corporation, or in a qualified farm or fishing property. The exemption is $835,716 for small businesses and $1,000,000 for farms or fishing properties.

If you have already claimed the $100,000 Personal Capital Gains Exemption, which ended in 1994, then this will reduce the amount of Lifetime Capital Gains Exemption available to you.

You must also verify whether you have claimed allowable business investment losses (ABIL) in prior years or have cumulative net investment losses (CNIL) as of December 31, 2017. These items will also affect the amount of exemption that can be claimed.

Use Your Capital Losses to Reduce Income Taxes

Did you know that you can use your 2017 capital losses to reduce your current year’s income taxes, by applying such losses against your 2017 capital gains?

This can be an effective strategy for reducing what is owed in a given tax year — but you must be careful of the superficial loss rules, which prevent you from claiming a capital loss on an identical asset that you reacquired 30 days before or after the sale date.

If your capital gains were realized in the years 2014 to 2016, and net capital losses were incurred in 2017, then you can carry these losses back against previous years’ capital gains. You can also carry the unused 2017 losses forward to future capital gains.

The last 2017 transaction date effective for publicly-traded securities is December 22, 2017.

Other Tax Planning Recommendations

There are many other strategies available for individuals and business owners who want to save on their income taxes in 2017. Here are some quick recommendations from our team, which you may want to consider:

  • Consider a Registered Education Savings Plan (RESP) for your children.
  • Set up a Tax-Free Savings Account (TFSA).
  • Review your December income tax instalment.
  • Make a low-interest loan to your spouse.
  • Repay outstanding shareholder loans and pay interest on employee loans.
  • Contribute to your spouse’s or common-law partner’s RRSP to the extent of your RRSP deduction limit for 2017. This doubles the amount a couple can withdraw for the Home Buyer’s plan.
  • Consider a Registered Disability Savings Plan for a child with a severe disability.
  • Claim you personal tax credits.
  • Keep your transit passes (up to June 30, 2017).
  • Pay reasonable salaries to family members in 2017.
  • Convert non-deductible debt to deductible interest.
  • Review your will every 5 years.
  • Split pension income with a spouse.
  • Apply for Home Buyer’s tax credit, if you are a first-time homebuyer.

Got questions about these recommendations or anything else in this article on 2017 taxes? Contact the team of Chartered Professionals Accountants at Clearwater for more advice.

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