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.

Tax tips to save you money

Every year millions of Canadians pay more tax than they should. They either don’t file their returns to their family’s best advantage or they leave valuable credits and deductions on the table. Even worse, they don’t file at all and face unnecessary penalties.

Here are some ways to make sure the tax system works to your advantage:

1. File as a family. When it comes to getting the best return for your family unit, it is important to file all returns together. There are three simple steps:

• Prepare Read more

Personal vs Company Owned U.S. Real Estate Investment Properties

U.S. investment property is usually defined as real estate that is primarily purchased to buy and sell for a profit in the future or to produce rental income. However, there are several factors to take into account when deciding to purchase an investment property. Understanding the many components of investment property ownership can avoid a lot of headaches down the road. Many investors with real estate investment properties own them personally. A more prudent way to own real 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

Advantageous of having a rental property held by a corporation

Having a residential rental property held by a corporation could prove advantageous in certain cases, specifically:

  • Where the owner has substantial taxable income
    From a tax standpoint, while it is true that the tax rates are similar (46.57% business tax rate vs. the individual’s maximum marginal tax rate of 48.2 %); this approach could make it possible to remortgage the residential rental property and ensure that the all of the interest is deductible by the corporation.
  • Where the owner has low taxable income
    Transferring residential rental property to a corporation reduces the taxpayer’s taxable income , and could make it possible for the taxpayer to benefit from certain tax incentives (GST/HST, child assistance, child tax benefit, reduction of the old age security pension refund, increase of certain credits based on family income, etc.).
  • Asset safeguarding
    Holding residential rental property through a corporation provides some protection against any actions initiated by the taxpayer’s creditors.

Transfer of personally-owned property

Moreover, you can transfer residential rental property that you currently own personally to a corporation without triggering any immediate tax impact using the tax rollover rules. At the time of the transfer, the corporation can issue a demand note to the former owner of the residential rental property equal to the cost paid by the owner for the Read more