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Archives for Financing

Company Cars – Should You Buy or Lease a Car?

buy or lease a car

If you are considering leasing or buying a vehicle under your corporation, there are many tax implications and rules that you will benefit from understanding from the get-go. The biggest question to ask yourself before you go through with this decision is as follows.

Business vs. Personal Use

When leasing a vehicle under your corporation, you can benefit from this by dedicating the business-use portion of the lease payments. Furthermore, you can also deduct other operating costs for the vehicle on its tax return. Often, the vehicle is also used for personal use, and costs associated with personal use should not be deducted through the corporation or business, ensure that you are keeping in mind ethical practices when claiming tax returns or doing business deductions.

Taxable Benefits – Automobile Used by an Employee

If the purchased vehicle is made available for use to an employee for personal use, then you will not receive a taxable benefit. Rather the employee will be considered to have received a tax benefit from their profile. It is important to understand that the CRA is extremely strict when it comes to personal use, even commuting to work is considered personal use. Lastly, the income on the annual T4 slip for the employee can qualify for payroll deductions, this includes income tax, CPP, and EI.

Operating Cost Benefit

Now, understanding all these benefits is important because you do not want to claim the wrong deductions and land yourself in trouble. The operating cost benefit is a bit unique, it recognizes that the employer has covered all expenses through the year for the vehicle, even though it is being used for personal purposes. This benefit can be calculated by multiplying the personal kilometers driven with the specified kilometer rate for that year. For example, (%0.27 / km) for 2021.

Corporate Tax Deductions

If you decide to lease a vehicle, you will be eligible to deduct the monthly lease payments of that vehicle on the corporate tax return up to a limit of $800/month + GST/HST. On the contrary, if the vehicle is purchased, the first $30,000 of that vehicle can be contributed to depreciation on that corporate tax return, this falls under the capital cost allowance program. Not only this, but your corporation can also deduct the operating expenses for your vehicle, these include the following:

  • Fuel and Oil Costs
  • Repair and Maintenance Cost
  • Insurance
  • Licensing and Registration Costs

Mileage Tracking

Given that you are claiming vehicle costs for tax purposes, an ethical practice should be kept in mind which is why it is so important to track your mileage, In the event of a Tax Audit, you can provide documentation to support the business use of your vehicle. You can track your mileage using the following apps:

  • TripLog
  • MileIQ

Zero-Emission Vehicles

Given the rise in popularity of electric vehicles (EV), you should know that you might actually benefit from owning one. There are a few incentives that are worth checking out if you are an EV owner. In the case that you lease a vehicle that is eligible, you can qualify for a federal rebate worth $5,000. Not only this but if you buy a vehicle that qualifies you can get a 100% write-off in the year that you purchased this vehicle. Whereas this is only 30% for a gas-powered vehicle. But keep in mind that you can get either rebate or the tax write-off, not both! You can get more information about this on the Government of Canada website.

All in all, buying or leasing a company vehicle can be difficult and you want to ensure that you do not take any wrong steps. Well, you do not need to worry about this when you hire H&T Accounting Services for all your financial needs. Book a consultation with us today!

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How Much Can You get in Canada Child Benefits?

How much can you get in Canada Child Benefits?

The Canada Child Benefit (CCB) is administered by the Canada Revenue Agency (CRA). It is a tax-free payment that’s provided on a monthly basis to eligible families who have children that are under 18. In addition, the Canada Child Benefits might also provide a child disability benefit, including other related territorial and provincial programs.

The Canada Child Benefit is paid to eligible families from July until June of the next year. This benefit is based on several factors. In order to qualify to receive this benefit, a family needs to meet these four important conditions:

  1. You have a child who is still under 18.
  2. You are the sole caretaker of this child and responsible for their upbringing.
  3. You live in Canada and are a resident who is required to file tax returns.
  4. You and/or your partner is a citizen of Canada, a protected person, a permanent resident, a temporary person (been in the country for the last eighteen months and has a valid permit for the nineteenth month), or is an indigenous person living under the Indian Act.

You will be considered as the primarily caretaker of the child if you are responsible for supervising the daily activities and other needs of the child, making sure that all of their medical needs are met, including arranging childcare when needed.

How much will a family receive?

The amount of money a family receives is based on a couple of things like:

  • The number and ages of qualified children present in the family.
  • The family’s net income for the last tax year.

Furthermore, you can also use a reliable online calculator in order to get an estimation of the amount of money you might receive. This is also going to calculate whether you qualify for the Child Disability Benefit or not. A lot of the community agencies can help you when it comes to finding information about family and child tax benefits, hence make sure to get in touch with them.

How can you apply for the Canada Child Benefit?

You can apply for the CCB by choosing one of the three different methods. The first method is by using you birth registration. This takes place when you are registering the birth of your child at the hospital. Also, there are certain provinces that allow online registration. You need to give your consent before sharing your Social Insurance Number (SIN) and give permission to the Vital Statistics Agency to share your birth registration number with the Canada Revenue Agency.

The second method involves logging into your CRA account. After you have logged in, go to the ‘Apply For Child Benefits’ section and fill in the required fields like your contact, citizenship, marital status, name of your child, gender, place and date of birth. After you have reviewed your application, submit it. You might have to provide additional documents to the CRA, if asked for it. You can do that by navigating to the ‘Submit Documents’ section in your CRA account.

The third method consists of mailing the application package. You would have to download form RC66 and fill it up. This is the Canada Child Benefits Application, and you have to attach other required documents too. Next, you would need to mail the entire package (make sure it is signed) to your tax centre.

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H&T Accountants Oakville

When it comes to efficacious business handling, a wide gamut comprising aspects—apt financing, imminent tax appeals, exquisite bookkeeping, ensuring audit defense, ensuring proper tax saving plans, profit enhancements, enigmatic cash flow solutions need to be addressed by myriad professionals of H&T, who possess skillets matching the credentials.

A credibility of any company lies on the financial empowerment initiatives the management has borne and on the ways adopted to quell systemic financial disparagement to its ilk. However, we at H&T take recourse to knowledgeable Accountants so as to ensure that all the subtle elements of financial worries are judiciously looked into. Now there may be instances that the business start-up plans or legit wind up plans need to be framed in a legal vein.

Managing the Finances is of prime concern for H&T

In such a case, H&T takes the aid of the exquisite Accountants, who is dedicated professionals. Maintaining proper and detailed version of financial statements and instances of tax returns are catered to and situations demanding noble tax saving plans need to be paid heed to. In such cases officials pertaining to operability related to Tax Returns in Brampton are hired and given priority by our managerial team at H&T.

Audit Defense, services pertaining to tax returns, financial statements and book-keeping services of H&T accountants are indeed top notch.

The accountants are not only hired to bear the most important onus of managing calculations, balanced sheets and inculcate harmonized ways to manage sales taxes, insurance pertaining to safety measures at workplaces, maintain documents pertaining to income taxes and maintaining the payroll structures. H&T Accountants in Oakville is aplomb in their functioning. They are adept in management of these wide aspects which shall help increase the profitability margins of H&T.

Need for record keeping

When it comes to maintaining records in a per-ordained vein, H&T officials are seen to resort to the savant and knowledgeable Accountants. They are associated with keeping proper records and also associated with propitious book keeping. The support information is duly filed in and the gamut of documents as a whole aptly suffices the credibility of the company, H&T. On such a premise, the accountants are duly relied upon, largely because they are dedicated and are assiduously associated with the listing processes.

Bolstering our credibility with the aid of dedicated accountants

Our credibility lies in our business managerial processes; the accountants’ wing is hugely associated with apt record keeping. They conduct the processes pertaining to maintaining the propensities of profits for H&T which may notch up by the services pertaining to Tax Returns. The accountants are mature enough to carry out services in such a vein which automates and bolsters the process of profit management of H&T in subtle ways.

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Pension income splitting

You (the pensioner) may be able to jointly elect with your spouse or common-law partner (the pension transferee) to split your eligible pension income if you meet all of the requirements.

 

Eligible pension income

What is Eligible pension income?

Eligible pension income is generally the total of the following amounts received by the pensioner in the year (these amounts also qualify for the pension income amount):

  • the taxable part of life annuity payments from a superannuation or pension fund or plan; and
  • if they are received as a result of the death of a spouse or common-law partner, or if the pensioner is 65 years of age or older at the end of the year:
    • annuity and registered retirement income fund (including life income fund) payments; and
    • Registered Retirement Savings Plan (RRSP) annuity payments.

Pension income that is not eligible

The following amounts received by the pensioner are not eligible for pension income splitting:

  • Old Age Security payments;
  • Canada Pension Plan, Quebec Pension Plan; and
  • Amounts received under a retirement compensation arrangement.

Note
Variable pension benefits paid from a money purchase provision of a Registered Pension Plan are not considered life annuity payments and do not qualify unless the pensioner is age 65 or older at the end of the year or the variable benefits are received as a result of the death of a spouse or common-law partner.

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