Are business expenses still tax deductible if you no longer operate said business?
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One of the advantages of being self-employed is the ability to write off a variety of business expenses against your income. In some cases, those expenses may even lead to a loss that may be used against other income of the current year or carried back up to three years. That loss can also be carried forward for use against future income for up to 20 years.
But are the expenses from a business you no longer operate and from which you have no expectation of future profits still tax deductible?
That issue came before the Tax Court in a recent case involving a retired Nova Scotia lawyer who deducted professional dues of $57 and file storage fees of $1,200 as expenses on her 2015 tax return. The Canada Revenue Agency allowed her annual dues, but it disallowed her storage fees.
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How to ensure you take advantage of all the tax benefits that come with being a landlord
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It seems like nearly everyone you talk to these days is a landlord or is thinking of becoming one. While some of us may simply rent out our basement to bring in extra income to help cover the mortgage, others are forgoing more traditional retirement savings vehicles such as RRSPs and TFSAs for the allure of investing in residential real estate. After all, why not collect some rental income to help offset some of the expenses with a view to disposing of the real estate in a future year, hopefully at a significant profit?
Some people even boast of the tax benefits associated with being a landlord, as they seek to use any rental losses generated from their rental properties to reduce taxes owing on other income, such as employment or business income.
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When the CRA calls: Jamie Golombek on his 10-month, transit pass reassessment saga
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If you recently received a letter in a plain, brown envelope from the Canada Revenue Agency, chances are it was because your 2017 personal income tax return is being reviewed to “make sure the benefits or credits you’re receiving are correct.”
If you received such a letter, the CRA’s advice, issued in a press release this week, is: “Don’t panic. You’re not alone.”
Each year, the CRA sends out approximately 350,000 letters and questionnaires asking taxpayers to provide additional information to ensure that taxpayers are properly entitled to the various benefits, deductions and credits which they claimed on their returns.
They may ask for documents to confirm that the information in the CRA’s records is correct and up to date. For example, the CRA may ask you to validate your marital status, where you live, and who cares for your children. This information can change as life events occur and may affect both whether you’re eligible to receive certain benefits and credits and how much you may be entitled to receive.
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Time to do some active planning to beat the passive income tax changes
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Earlier this year, the government passed new tax legislation governing Canadian-controlled private corporations (CCPCs), including incorporated professionals. As we enter the final weeks of 2018, one new measure is of particular concern — the potential looming loss of the small business deduction (SBD) in 2019 for corporations with more than $50,000 of passive investment income in 2018.
The SBD provides a low rate of corporate tax on the first $500,000 (known as the “SDB limit”) of active business income annually. Business owners and incorporated professionals who don’t need to pay out corporate earnings to fund their personal lifestyles are able to enjoy a significant tax deferral of up to 41 per cent by simply leaving funds in their CCPC and investing them.
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What’s New in QBO: August 2018
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With the dog days of summer in full drag, what better to break up the humdrum than a refreshing gust of QuickBooks® Online updates and improvements.
Here’s a peek at the new features coming your way this month.
What’s new in August
- Bulk trip deleting in QuickBooks Self-Employed
- Test-drive new features in QBSE Labs
- Simplified Chart of Accounts setup in QuickBooks Online
- Create new accounts when you add items in QuickBooks Online
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