Accountants are always keeping up to date on tax related issues.
Here are a few tax planning ideas to consider before 2010 and changes for 2011:
1.Federal Small business rate remains at 11% for Federal tax purposes
2.New Avoidance Transaction rules, must be reported after 2010.
3.Quebec Sales Tax Rate: Increasing from 7.5% to 8.5% on January 1, 2011 and to 9.5% on January 1, 2012.
Financial Statement Reporting:
- “Publicly accountable enterprises” must adopt International Financial Reporting Standards (IFRS)
- Private Enterprises, must either adopt IFRS or “Accounting Standards for Private Enterprises” (ASPE).
Owner Managed Business:
- Salaries to family members: accrue a reasonable salary to a spouse or child who is in a lower tax bracket.
- Consider maximizing discretionary deductions such as Capital Cost Allowance (CCA)
- Mandatory e-filing of corporate tax returns if annual gross revenue exceed $1 million.
- Exemption for qualified small business corporation shares is $750,000.
- Be aware that Federal and Provincial environmental incentives are available for your company to help you go green and save money.
- Education and textbook tax credits- Claim these credits if you attend post-secondary school.
- Scholarships: Exclude from income the full scholarship but be aware that new rules pertaining to post-secondary scholarships, fellowships and bursaries commence in 2010.
- Unused and unclaimed tax credits may be transferred to your parents, spouse or grandparents.
Tax planning is an important component of what an Accountant does, most accountants make it a career to specialize in taxation, which is definitely a rewarding endeavour.
- In Quebec PST increases from 7.5% to 8.5% on Jan. 1, 2010, what tax planning feature should you be considering?
- In your opinion why do governments provide Tax Incentives?
- Why is tax knowledge important to you as an Accountant?
For more information visit PricewaterHouseCoopers: www.pwc.com/ca/publications where more information is provided on numerous topics
Link to Year-End Tax Planning-2010: from PWC