Posted by & filed under Accounting Careers, Taxation & Planning.

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:

  1. “Publicly accountable enterprises” must adopt International Financial Reporting Standards (IFRS)
  2. Private Enterprises, must either adopt IFRS or “Accounting Standards for Private Enterprises”  (ASPE).

Owner Managed Business:

  1. Salaries to family members: accrue a reasonable salary to a spouse or child who is in a lower tax bracket.
  2. Consider maximizing discretionary deductions such as Capital Cost Allowance (CCA)
  3. Mandatory e-filing of corporate tax returns if annual gross revenue exceed $1 million.
  4. Exemption for qualified small business corporation shares is $750,000.

 

Environmental Incentives:

  1. Be aware that Federal and Provincial environmental incentives are available for your company to help you go green and save money.

Students:

  1. Education and textbook tax credits- Claim these credits if you attend post-secondary school.
  2. Scholarships: Exclude from income the full scholarship but be aware that new rules pertaining to post-secondary scholarships, fellowships and bursaries commence in 2010.
  3. 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.

Discussion Questions:

  1. In Quebec PST increases from 7.5% to 8.5% on Jan. 1, 2010, what tax planning feature should you be considering?
  2. In your opinion why do governments provide Tax Incentives?
  3. 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

 

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