Armstrong Jones LLP

#TaxTipTuesday Approximately 30% of total yearly donations in Canada are made in December [CanadaHelps, 2019], so it's safe to say that Canadians are gearing up for a season of giving. 💖 While giving back to the community is ultimately not about what you get in return, when it comes to your taxes, giving back can give you a break. Canada's federal and provincial governments provide a non-refundable tax credit as a way to incentivize Canadians to support the charitable causes they find dear to their hearts. How does it work? The Federal Government tax credit is determined as follows: ➡️ 15% of the first $200 of eligible donations; plus ➡️ 29% or 33% of eligible donations over $200; ➡️ Up to a maximum of 75% of the individuals net income. The credit is 33% for donations above $200, to the extent you have taxable income that is subject to the Federal personal income tax rate of 33% (taxable income above $235,675 for 2023). In addition to the above tax credit, there will also be a provincial tax credit that will apply (the rates differing by province). Donations need to be made by December 31, 2023, to be eligible to claim these receipts for the 2023 tax year. Make your donations go further by: 🌟 Combining your donations with your partner’s donations. While only one of you will be able to claim the credit, if the donations claimed exceed the $200 threshold, a higher credit rate will apply.   🌟 Claiming any unclaimed donations you or your spouse made in the previous five years. Considering a legacy gift or other significant contribution? It's always good to speak to your accountant to ensure that it's being made in a tax efficient manner. There are alternative methods, besides donations of cash, that may be available and still eligible for the tax credit. As well, depending on the size of the gift, it could trigger unwanted tax consequences. If you have any questions related to the impacts of these donation tax credits or need help claiming them on your next tax return, reach out to one of our trusted experts by phone at 613-695-9087 or online 📨 at https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA #armstrongjonesllp | #armstrongjones | #tax | #cpa

#TaxTipTuesday It’s almost that time of year again! 🎁 Employee gifts are one of many ways to show your appreciation. Generally, gifts to employees are taxable, however under CRA administrative policies, a non-cash gift may not be a taxable benefit. The tax on a gift could be significant to an employee, so be sure to consider the following information when making that final decision: ✨ To be considered non-taxable, a non-cash gift needs to meet certain criteria and cannot exceed $500 per employee. This limitation does not apply to small items such as coffee mugs, snuggies, and trophies (so get those orders in!); ✨ A gift is separate from an award and a reward. For example, a gift to employee performance may be considered a reward and a reward is taxable. Knowing the difference between these classifications will prove useful in the records you're required to maintain and the boxes that apply when filing those T4’s; and, ✨ CRA’s administrative policy towards non-taxable gifts does not apply to non-arms length parties. Shareholders, relatives, and the like are not included. The above list is non-exhaustive, and we recommend taking a deeper dive on CRA’s positions to see how things may apply to your situation. In this regard, if you’re feeling the spirit of giving this holiday season, don’t forget to check this list (and, check it twice!) For more information, feel free to reach out to our team. Call us at 613-695-9087 or contact us online at 📥 https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #cpa

#TaxTipTuesday If you’re running a business as a sole proprietor, you might be wondering when the right time to incorporate is. 🤔 One of the main benefits a corporation provides is the deferral of taxes because the corporate income tax rate is lower than personal tax rates. However, you can really only take advantage of this deferral if your business is earning more income than you require for your lifestyle. To keep it simple, if you're starting to accumulate excess cash in your bank account after satisfying your personal needs, you might want to consider incorporating your business to reduce your tax burden on any excess funds earned. If you want to learn more about the benefits of incorporation or feel that you may be in a position to incorporate, call us at 613-695-9087 or reach out to us online at 📥 https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #corporatetax | #cpa

#TaxTipTuesday Regular development and training is necessary in some professions, and may be sought after in others. In many cases, businesses incur training and development costs out of town, which often require additional travel costs. Regardless of what drives a business to undertake such an initiative, it is important to be aware of what types of training (and travel) costs are eligible for a tax deduction. 💼✈️ Training costs comprise of not only course fees, but may also include the cost of accommodations, a portion of meals, and travel expenses. In general, deductibility of such costs focuses on their relation to your business or skills, reasonability towards the location and costs, as well as the duration of your training as compared to your length of stay. Training is generally considered to take place in many forms. For example, someone who operates a business flipping real estate may find value in attending conferences and conventions that discuss their industry, and this individual may refer to their attendance at these events as training. However, CRA distinguishes between training and conventions, and there are differences in the eligibility of deducting such costs from a tax perspective. Regardless of whether you are attending a convention or formal training, speak to an an expert at Armstrong Jones LLP to find out what you may be able to deduct under the circumstances. Call us at 613-695-9087 or contact us 📩 online at https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #corporatetax | #cpa

#TaxTipTuesday Do you own and operate a short-term rental? If so, you may be affected by the government's proposed tax changes for non-compliant short-term rentals. Effective January 1, 2024, the proposed changes would deny all outlays or expenses incurred by the use of a residential property as a short-term rental if that property was considered to be a non-compliant short-term rental. Now, to determine if the proposed changes could apply to your property, it’s imperative to understand the definition of a non-compliant short-term rental, which is, at any time, a residential property that is offered for rent for a period of less than 90 consecutive days that: ➡️ is located in a province or municipality that does not permit the operation of a short-term rental; or ➡️ is non-compliant with any of the registration, licensing, and permit requirements in the locality in which the property is located. There is a silver lining for 2024 through some transitional relief, in that, if you are compliant with all the local registration, licensing, and permit requirements as of December 31, 2024, you will be deemed compliant for the full year. Moving forward to 2025, if your short-term rental is non-compliant for a portion of the year, the disallowed portion of outlays or expenses would be calculated by prorating the total expenses for the year based on the number of days of non-compliance over the total days the residential property was a short-term rental. Given the severity of the tax consequences of being a non-compliant short-term rental, it’s important for owners to understand the proposed changes and what to expect in terms of additional taxes owing if compliance cannot be achieved. If you have any questions or are interested in learning more about the proposed tax changes, reach out to one of our professionals at Armstrong Jones LLP today! Call us at 613-695-9087 or contact us 📩 online at https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #corporatetax | #cpa

#TaxTipTuesday If you’re a business owner, you’ve probably incurred meals and entertainment expenses for business purposes at some point along the way. And by now, you’ve likely realized that they are only 50% deductible for tax purposes. However, that isn’t always the case. There are certain circumstances where some meals and entertainment expenses can be fully deductible for tax purposes. One of the most common situations – and the one that were going to cover today – is when you hold an office party or similar event and invite all your employees from a particular location. 🎉 When you host a party or event of that nature, you are eligible to deduct 100% of the meals and entertainment expenses for tax. There is a small catch however, which is that you can only do this for a maximum of six events per year. So, what do you do if you hold more than six events a year? Best practice would be to determine which six events resulted in the highest costs incurred – and then those 6 events form the events you elect to deduct 100% of the related meals and entertainment expenses. This ensures that you are maximizing the deductions that are available to you, so that you can continue to invest and grow your business. TIP 💡 Consider tracking these amounts in a separate account (or at least identify them) for your accountant so that they can treat these amounts separately. Looking for more tax advice? Call us at 613-695-9087 or contact us 📩 online at https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #corporatetax | #cpa

#TaxTipTuesday When you receive your corporate tax return at year end, you may assume that the most important feature is the taxes you owe (or, are owed). Though this information can help you to manage your cash flows and expectations over the following year, you may be missing key elements of your return that can provide you significant benefits. 💡 Here are a few areas that are important to keep track of: ➡️ Refundable dividend tax on hand (RDTOH): A refundable tax that is as it sounds – it is a type of tax paid on certain taxable income that may be refunded to the corporation upon a future event. Generally, if RDTOH is available, declaring a dividend might be in order! ➡️ General rate income pool (GRIP): When your business’ taxable income generates GRIP, you can declare what are known as “eligible dividends”. Eligible dividends are taxed at a preferential rate, so if you are paying yourself dividends as part of your remuneration strategy, be sure to check this balance! ➡️ Capital dividend account balance (CDA): 2024 is an interesting year as it relates to capital gains. #DYK that when your corporation realizes a capital gain, a separate balance known as CDA is tracked? CDA is a balance that, if available, can be paid out to a shareholder tax free! We normally refer to the above elements as "low hanging fruit" and, coupled with the bigger picture, this helps us provide tailored advice to our client base. In any case, the above items require the proper steps to be taken, and filings to be made, to access their benefits. Are you interested in learning more about these details? Reach out to one of our professionals at Armstrong Jones LLP today! Call us at 613-695-9087 📲 or contact us online to find out more. https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #corporatetax | #cpa

#TaxTipTuesday Did you know there are different options for reporting and remitting sales taxes? 💡 The "quick method" of accounting for GST/HST offers a simplified alternative to eligible sales tax registrants (new and old) that helps reduce time and efforts when it comes time to file your obligations. For example, in Ontario, registrants providing local goods and services normally collect HST at a rate of 13%. This payable becomes offset by the GST/HST portions paid towards eligible expenditures. The net amount is then remitted as payable to the Canada Revenue Agency (“CRA”). If eligible, the same collection rate would be charged by the registrant in Ontario, however, when they report to CRA using the quick method of accounting for HST, they would remit an effective rate of 8.80% of taxable sales. If your average sales taxes reported to CRA (as a percentage of taxable sales) is higher than the rate of 8.80% or you are a registrant with low expenditures that attract GST/HST, you may find that extra time (and money) awaits you through the use of the quick method. Whether you are a first time registrant, or are currently collecting and remitting sales taxes, you may be eligible to register to use the quick method. Call the Armstrong Jones LLP team by phone at 613-695-9087 📲 or contact us online to find out more. https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #corporatetax | #cpa 

We were pleased to participate in this year's Net Night, hosted by the Sprott Accounting Students' Association! 🙌 Big thank you to the students for coming out and the SASA team for putting on a great event!

#TaxTipTuesday Have you ever sold capital property and not received all of the proceeds at the time of sale but rather a portion on closing, and then the remaining amount at a later date or dates? If so, you may have been eligible to claim what is referred to as a "capital gains reserve". 💡 Claiming a capital gains reserve allows you to a defer a portion of a capital gains and then report it in a later period or periods on a basis which is more in line with when the funds are received, effectively spreading the tax burden over a number of years. Capital gains reserves can also be an effective tax planning tool when selling capital property that is expected to generate a significant gain. For example, if structured appropriately, a transaction resulting in a $500,000 capital gain could be deferred and recognized evenly over a 5-year period resulting in more tax savings than if it was fully reported in a single year. Capital gains reserves can be complex and not all individuals or transactions are always eligible. If you have questions about capital gains reserves or would like help reporting one in your tax return, reach out to one of the team members at Armstrong Jones LLP. Call us or contact us online at https://lnkd.in/g85pkjjX Connor Jones, CPA | Adam Armstrong, CPA, CA | Jeff Rowsell, CPA, CA | #armstrongjonesllp | #armstrongjones | #tax | #corporatetax | #cpa