Small Business Owner Saves Taxes with Income Splitting

A practical example for small business owner saving taxes with income splitting

Mr Li runs a small unincorporated business in Ottawa, Ontario. His business net income is $88,888. His wife does not have a job and no any income. In 2013 income tax return, Mr Li pays $25,700 income taxes (including $4,712 in CPP contributions for self-employment).

If Mr Li paid a salary of $40,000 to his wife, his net business income would be reduced to $48,888. As a result, Li?s tax bill would be $12,204 Read more

Tips for Canada-US Cross-Border Tax


If you are a Canadian resident, but living or working in US or have US rental property:

  • Avoid becoming a US resident while visiting
  • If you own rental real estate in the U.S., elect the net rental income     method
  • Beware of high effective tax rates when considering an investment in a U.S. limited liability corporation
  • Sell real estate to a buyer who will occupy
Read more



海外资产申报表 (T1135) 新添加的内容包括,海外资产所在的金融机构具体名称,或任何掌握资金的实体名称; 存放海外资产的国家名称; 以及海外资产所产生的具体收益。具体申报内容包括列出的六大类资产︰

  1. 现金类资产,要求提供银行信息、所在国家、一年中该帐户最大存有的金额、年底的余额及一年中产生的收入等信息。
  2. 投资海外公司类资产,要求提供所投资的公司名称、总共投资的最大成本值、年底持有的成本值、一年中产生的收入以及资本增值或亏损等信息。
  3. 海外债务类资产 (包括海外股票基金),要求提供各资产的具体描述、一年中所持有资产的最大成本值、年底持有资产的成本值、一年中产生的收入以及资本增值或亏损。
  4. 非居民信托权益类资产,要求提供信托的名称、一年中所持有权益的最大成本值、年底持有权益的成本值、一年中从该信托中收到的收入金额、一年中从该信托中收到的资本金额、资本增值或亏损等信息。
  5. 海外投资地产类资产,要求提供地产的地址、一年中所持有资产的最大成本值、年底持有资产的成本值、一年中从该地产中收到的收入、地产买卖所产生的资本增值或亏损等信息。
  6. 其他海外资产,要求提供资产的信息,包括一年中所持有资产的最大成本值、年底持有资产的成本值、一年中从该资产收到的收入、因买卖所产生的资本增值或亏损等信息。


对有一年迟报,罚款是$25每天,最高到$2500; 对故意不报,罚款是$500每月,最高到$12000; 对税务局已经发出通知要求申报而故意不报,罚款是$1000每月,最高到$24000; Read more



在加拿大,房屋出租的支出可以用来抵扣房租收入。 在面对实际的税务问题时,最好向专业会计师咨询,再做决定。欲了解更多,请联 系 AccXpert TaxServices 安可托专业会计事务所 王兵注册税务会计师 – 专业会计及税务服务,可信,快速,低费用.

网址 邮件:   致电: 613-600-6988   微信: AccXpert-TaxServices

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Top 10 Income Tax Saving Tips

Top 10 Tax Tips
  1. Reduce taxable income with a Registered Retirement Savings Plan (RRSP). RRSPs can be eligible for a tax deduction in the amount of the annual contribution. Up to 18% of earned income to a maximum of $23,820 can be added in 2013. The deadline for contributions that can be claimed as a 2013 RRSP deduction is Saturday, March 1, 2014. As March 1 falls on a Saturday, this deadline will automatically be extended until Monday, March 3.
  2. Build wealth with a Tax-Free Savings Account (TFSA). TFSAs allow you to make up to a $5,500 annual contribution. Income earned in the TFSA is non-taxable, so maximize the amount of tax free growth.
  3. Contribute to a Registered Education Savings Plan (RESP). Help your child or grandchild save for post-secondary education. Contributions are not tax deductible and they are not taxable when withdrawn.
  4. Compile all Tuition Fee and Education Credits. If you don’t need these deductions you can transfer up to $5,000 (indexed at $6,620 in Ontario) to parents who would welcome your generosity.
  5. Weigh the benefits of withdrawing from an RRSP to purchase a home. Individuals may withdraw up to $25,000 from their RRSP. Withdrawn amounts are repayable in equal annual sums over 15 years.
  6. Capitalize on family if you are a small business owner: Hire family members for legitimate work opportunities and write off the costs of their salaries.
  7. Income splitting. If you earn more than your spouse you could reduce your family’s combined tax bill by paying your spouse’s expenses, freeing up money that can then be used for investment purposes.
  8. Minimize overall tax liability of medical expenses. You can distribute the medical expenses claimed on behalf of each other to be advantageous for the lower-income spouse to claim allowable medical expenses.
  9. Take advantage of all eligible credits. The Public Transit Pass Credit; and both the Children’s Fitness and Arts Credits are all ones sometimes forgotten.
  10. Maximize charitable donations credits. Consider combining both donations if they total more than $200.

Year-end management bonus – tax deferral for the shareholder

Companies may claim a tax deduction for unpaid management fees or salary at year-end, provided that the fees are paid to the manager or shareholder within 179 days of the year-end date.

If a corporation’s year-end falls within 179 days of the calendar year, a bonus payable may provide for a tax deferral.

For example, if a company has a corporate year-end of Dec 31, 2012 and a profit of $100,000, the shareholders can issue a management bonus of $100,000 to reduce corporate taxable income to zero Read more

Business Transactions Prior to Incorporation

Many new business owners ask about how to deal with Business Transactions Prior to Incorporation. Here is the right answer for this issue according to the CRA IT-364 Commencement of Business Operations:

Date When Business Commences

2. It is not possible to be specific about the point in time when a contemplated business becomes an actual business. Generally speaking, it is the Department’s view that a business commences whenever some significant activity is undertaken that is a regular part of the income-earning process Read more

A Tax Guide for Canadians Buying US Property

Canadians Buying US Real Estate

If you are a Canadian resident intending to buy a residential property in the United States it is important that you are aware of the following tax implications particularly if you intend to rent it for any period of time during the year.

A non-US resident owning a US residential rental property may elect either of the following options:


This option makes little economic sense.


In order to avoid the 30% gross revenue tax on your US property you must file form W8-ECI (Certificate Read more

Tax Planning on Rental properties both in Canada and US

For more information, please contact us at, or call us at 1-613-600-6988.

The tips of buying rental property

If you borrow money to buy or repair a rental property, make sure you arrange things so that the interest on the loan is tax deductible. That means keeping mortgages and lines of credit for the rental property completely separate from loans taken out to buy or improve your principal residence, which are not tax deductible.

Say you have a $100,000 mortgage on your home Read more

How to Avoid Paying Back Depreciation on a U.S. Rental Property

While you can claim many expenses as write offs in the year you make them, the IRS treats buying a rental property not as an expense but as a conversion — In other words, you’re turning cash into an asset with value, meaning that no net change to your personal wealth has occurred. However, since buildings gradually wear out, the IRS lets you depreciate it by taking a small portion of value as an expense every year, writing down its value and reducing your taxes. With something like a computer Read more