I work with multiple Realtors on their tax planning and reporting, and I often get the question ‘Should I incorporate?’
Incorporating can be a very powerful tool for small business owners to reduce current income taxes, and to build an efficient investment portfolio inside the corporation to support you long-term financial goals.
People often assume you have to be earning a lot of money for incorporating to save enough tax to make it worth the extra costs. While it’s true the tax savings should outweigh the costs, the answer of how much income it takes to make it worthwhile depends on each individual’s situation and cost of living. If you can split income to a lower-income spouse, the savings kick in much faster. And the lower your cost of living, the more tax you can save by incorporating.
The Federal Government is considering taxing your health and dental benefits. This means hundreds or thousands of dollars added to your tax bill when you file! It also means that Canadians may be at risk of losing their coverage if their employer can’t afford to keep them insured.
These plans provide preventive care not covered under your provincial health services, including prescription drugs, vision care, mental health services, dental care, nutrition counselling, and musculoskeletal care. All this is at risk!
Without proper health care benefits, more Canadians will enter the public system with greater health needs, driving up costs.
The Federal Government needs to hear from Canadians that taxing these essential health benefits is a bad idea, and the negative effect this could have on middle class Canadians and their families.
Taking needed care away from millions of Canadians is not the way to address fairness and equity.
Starting in 2015, you can contribute up to $10,000 annually to your TFSA (up from $5,500)
What this means is that the total lifetime contribution limit up to 2015 is now $41,000, so if you haven’t already contributed, you could move that much of your investments into a tax free account immediately, and stop paying tax on any investment income from that money.
What better way to avoid a bunch of those little T3 and T5 investment income slips that you get every year, and that make your tax return less… well… taxing?
Effective for the 2014 tax year, the new Family Tax Cut provides families can reducing the family’s taxes by up to $2,000.
The calculation itself is a little complicated, but if you are a couple with kids under 18, this will almost certainly save you money.
The basic concept is to level the playing field for all families. Thanks to progressive tax rates, when a couple earns two equal incomes, they pay lower taxes than a couple with the same total income, but with one higher income earner. This new policy estimates the tax impact of splitting the income equally between the couple, and directly reduces the taxes of the higher income earner.