Canadian Income Tax (T1) – Personal income tax
Canadian income tax rules are based on “residency” – if an individual is a full-time permanent resident of Canada, then the person will be taxed on their worldwide income in Canada. To report personal income and related deductions, we complete Form T1 and related schedules for clients. This would encompass sole proprietorships, investment income and unincorporated rental properties, to name a few. Our clients rely upon U.S. to guide them “through the maze”, prepare their filings accurately, on time, and minimizing taxes – and most of all – giving them piece of mind.
To report your business income and expenses, we complete Form T2125, Statement of Business or Professional Activities for clients. (Form T2125 is part of the T1 income tax filing). This form is used to report business or professional income and expenses (including self-employed commission sales). CRA rules and regulations pertaining to sole proprietorships are quite complex.
You can rely upon Edelkoort Smethurst Schein CPA’s LLP and their staff to know these rules, keep you on-side with CRA, while taking full advantage of all allowable deductions such as capital cost allowance (CCA), and home office expenses. Bookkeeping services are available for clients requiring assistance with recording transactions throughout the year.
To report your Canadian rental property income and expenses, we complete Form T776, Statement of Real Estate Rentals. Rental income is income you earn from renting property that you own or have use of. You can own the property by yourself or with someone else. Rental income includes income from renting house, apartments, rooms, space in an office building, and other real or movable property. In most cases, you are earning income from property if you rent space and provide basic services only. Basic services include heat, light, parking, and laundry facilities. If you provide additional services to tenants, such as cleaning, security, and meals, you may be carrying on a business. The more services you provide, the greater the chance that your rental operation is a business, which has other tax implications.
Edelkoort Smethurst Schein CPA’s LLP know the CRA rules pertaining to rental properties, and ensure that you are in compliance, while taking full advantage of all allowable deductions such as capital cost allowance (CCA). Bookkeeping services are available for clients requiring assistance with recording transactions throughout the year.
Foreign Tax Credits
This credit is for foreign income or profits taxes you paid on income you received from outside Canada and reported on your Canadian return. Tax treaties with other countries may affect whether you are eligible for this credit. In most cases, the foreign tax credit you can claim for each foreign country is whichever of the following two amounts is lower; the foreign income tax you actually paid; or the tax otherwise due in Canada on your net income from that country. Form T2209 (Federal), and Form T2036 (Provincial) are used to claim the foreign tax credits.
Voluntary Disclosure Program
The VDP promotes compliance with Canada’s tax laws by encouraging taxpayers to voluntarily come forward and correct previous omissions in their dealings with the CRA. Taxpayers who make a valid disclosure will have to pay the taxes or charges plus interest, without penalty or prosecution that the taxpayer would otherwise be subject to under the income tax act. Taxpayers can make disclosures to correct inaccurate or incomplete information, or to disclose information not previously reported. For example, taxpayers may not have met their tax obligations if they claimed ineligible expenses, failed to remit source deductions or the GST/HST, or did not file an information return.
Edelkoort Smethurst Schein CPA’s LLP has years of combined experience in preparing and submitting Voluntary Disclosures with CRA, on behalf of taxpayers. Trust U.S. to deal with CRA on your behalf.
Corporate Income Tax (T2)
Resident corporations – all corporations—including non-profit organizations, tax-exempt corporations, and inactive corporations—have to file a T2 return for every tax year, even if there is no tax payable. The only exceptions to this rule are provincial Crown corporations, Hutterite colonies, and corporations that were registered charities throughout the year.
Our clients are primarily Canadian Controlled Private Corporations (CCPCs) owned by small businesses.
We would be pleased to discuss how we can support you with T2 corporate income tax filings.
Trusts and Estates (T3)
A trust is either a testamentary trust or an “inter vivos” trust. Each trust has different tax rules. Our office deals primarily with estates of deceased taxpayers, which are typically testamentary trusts which are filed as part of the final T1 personal income tax return of the deceased. Income earned after the date of death is reported on a T3 Trust Income Tax and Information Return. T3 trusts returns will also be required in other situations.
We would be pleased to discuss how we can support you with estate and trust filings.
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