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Do incorporated business owners still need to pay CPP in Canada?

CPP rules change once a business is incorporated. This article explains when CPP applies, when it doesn’t, and what incorporated owners should consider.

How are dental associates taxed in Canada?

Dental associates are often unsure how their income is taxed. This article explains how the CRA treats associate income and what dentists should plan for early.

When should a tech startup start paying founder salaries in Canada?

Founder pay is a balancing act between cash flow and tax planning. This article explains when salaries make sense for Canadian tech startups.

Do contractors need to register for GST/HST in Canada?

GST/HST registration rules confuse many contractors. This article explains when registration is required and where contractors most often make mistakes.

What expenses can medical professionals deduct through a corporation?

Not every expense paid through a medical corporation is deductible. This article explains how the CRA treats common medical and practice-related costs.

Can law firms deduct meals, travel, and client entertainment in Canada?

Meals and travel deductions are commonly misunderstood by law firms. This article explains what is deductible, what is limited, and how the CRA reviews these claims.

Should dentists incorporate their dental practice in Ontario?

Dentists are often advised to incorporate early, but it is not always the right move. This explains when incorporation helps and what dentists should consider in Ontario.

What expenses are not deductible for a Canadian corporation?

Learn which expenses are not deductible for Canadian corporations and how the CRA treats personal, capital, and non-business costs.

Should contractors incorporate in Canada?

Find out whether contractors should incorporate in Canada, including tax considerations, cash flow implications, and when incorporation makes sense.

What is a shareholder benefit and why does the CRA care?

Learn what a shareholder benefit is, how the CRA treats personal expenses paid by a corporation, and why shareholder benefits often trigger reassessments.

Do lawyers need to charge GST/HST in Canada?

Not sure if lawyers must charge GST/HST in Canada? Learn registration rules, thresholds, exemptions, billing requirements, and compliance. Written for lawyers by Rotaru CPA.

Do US companies need payroll or GST/HST in Canada?

Hiring Canadian workers from the US? Learn payroll requirements, GST/HST rules, contractor vs employee risks, and cross-border compliance. Rotaru CPA explains.

What expenses can architects and designers deduct in canada?

Which expenses can architects deduct in Canada? Learn rules on software, travel, home office, equipment, and GST/HST. Rotaru CPA explains.

How much tax does a corporation pay in Ontario?

Learn how much tax a corporation pays in Ontario, including small business tax rates, how corporate tax works, and what these rates mean in practice.

How does job costing help Canadian contractors avoid lost profit and cash flow problems?

Struggling with project profit tracking? Learn how job costing helps Canadian contractors price accurately, control costs, and improve margins. Rotaru CPA explains.

Is it worth incorporating in Ontario for tax purposes?

Learn when incorporation actually saves tax in Ontario, how CRA rules apply, and what income levels make incorporation worthwhile for Canadian professionals and business owners.

What triggers a CRA audit or review for small businesses in Canada?

Learn what triggers a CRA audit or review for small businesses in Canada, including common red flags, GST/HST issues, and how the CRA selects files for review.

Do medical clinics need to charge GST/HST in Canada?

Find out when medical clinics must charge GST/HST in Canada, which services are exempt, and the most common GST/HST compliance mistakes clinics make.

How much tax does a corporation pay in Ontario?

Learn how much tax a corporation pays in Ontario, including small business tax rates, how corporate tax works, and what these rates mean in practice.

Should physicians pay themselves salary or dividends from their corporation?

Should physicians pay themselves salary or dividends from their corporation? Learn how taxation, CPP, RRSPs, and compliance affect doctors. Rotaru CPA explains.

Do I need to pay taxes as a digital nomad?

Canadian digital nomads must understand their tax obligations based on residency status. Residents are taxed on worldwide income, while non-residents are taxed only on Canadian income. To become a non-resident, significant ties to Canada must be severed. It's essential to file taxes accurately, declare all income, and consider foreign tax credits to avoid double taxation. Consulting a tax professional is advisable for navigating these complexities.

Tax Residency Digital Nomad Taxes International Tax Compliance

How do I do my taxes if I work for myself?

Self-employed individuals in Canada must report all income and can deduct business and home office expenses. If your sales are over $30,000 in a year, you must register for HST. Filing can be done electronically or via paper, with key forms including T2125. The filing deadline is typically April 30, but self-employed individuals have until June 15 to file. Deadline to pay taxes is April 30th for both individuals and self employed business.

Canadian Tax Obligations for Residents Tax Residency Classification Foreign Income Reporting Obligations

How do I charge taxes for my product/service?

To charge taxes for products or services in Canada, understand the GST and HST rates based on customer location, register for a GST/HST account if revenues exceed $30,000, accurately charge the applicable tax on invoices, and remit collected taxes to the Canada Revenue Agency. Special considerations apply for e-commerce, where the same tax rules are enforced for digital products.

Tax Residency Canadian Tax Obligations for Residents

How do I keep track of my earnings and expenses as a canadian freelancer or business owner?

To effectively track earnings and expenses as a Canadian freelancer or business owner, you should use a bookkeeping software or an excel spreadsheet for your year end tax filing. Additionally, if your consultancy business operates through a Canadian hosting platform, you must ensure that HST is properly reported to the CRA.

Canadian Tax Obligations for Residents Foreign Income Reporting Obligations Tax Residency Classification

How are cryptocurrency transactions taxed in Canada?

In Canada, cryptocurrency is treated as a barter transaction for tax purposes, with capital gains tax applying to profits from buying and selling crypto. Only half of capital gains are taxable, and detailed record-keeping of transactions is essential. Crypto activities may be classified as business income if trading is frequent. When filing taxes, report capital gains on Schedule 3 of the T1 tax return. Stay updated on CRA guidelines and consult a tax professional if needed.

Tax Residency Canadian Tax Obligations for Residents Digital Nomad Taxes

What happens to my CPP contributions if I become a non-resident?

If you become a non-resident, your Canada Pension Plan (CPP) contributions remain intact, and you can still qualify for CPP benefits upon retirement, regardless of your residency status. You generally cannot continue contributing to CPP unless working for a Canadian company abroad. When claiming benefits, you will need to apply and provide documentation, and be aware of potential tax implications in your new country of residence.

Tax Residency Tax Implications for Temporary Residents Canadian Tax Obligations for Residents

What tax deductions am I eligible for as a Canadian startup founder?

How do I calculate my income as a Canadian freelancer, contractor, or business owner?

Calculating income as a Canadian freelancer, contractor, or business owner requires understanding revenue sources, maintaining accurate records, and complying with tax obligations. Key steps include tracking all income, documenting expenses, totaling earnings, deducting eligible expenses, and reporting income using Form T2125. Self-employed individuals must pay income tax on net earnings, register for GST/HST if revenues exceed $30,000, and may need to make instalment payments if taxes are not withheld.

Tax Residency Canadian Tax Obligations for Residents Foreign Income Reporting Obligations

How much money do I need to set aside for my taxes as a Canadian freelancer, contractor, or business owner?

Canadian freelancers, contractors, and business owners should set aside 25% to 30% of their gross income for taxes, covering federal and provincial taxes as well as Canada Pension Plan contributions. It's essential to report all income, track business expenses for deductions, and maintain accurate records. If earning over $30,000, registration for GST/HST is required, and those expecting to owe over $3,000 may need to make quarterly payments. Consulting a tax professional is advisable for personalized guidance.

Canadian Tax Obligations for Residents Tax Residency Classification Digital Nomad Taxes

What tax deductions am I eligible for as a Canadian freelancer?

Canadian freelancers can claim various tax deductions to reduce taxable income, including home office expenses, advertising, office supplies, professional fees, vehicle expenses, travel costs, and a portion of internet and phone expenses. If registered for GST/HST, input tax credits for related purchases can also be claimed. Accurate record-keeping is essential for substantiating these deductions.

Tax Residency Canadian Tax Obligations for Residents

Can I continue contributing to my RRSP while working abroad?

You can continue contributing to your RRSP while working abroad if you maintain Canadian residency for tax purposes. Non-residents can only contribute based on unused contribution room prior to leaving Canada, and earned income in Canada is necessary to generate new contribution room. It's important to verify your residency status and track your contribution room before working internationally. Consulting a tax professional is recommended for personalized advice.

Tax Residency Canadian Tax Obligations for Residents Residency Status Determination

Can I maintain my Canadian bank accounts while living abroad long-term?

Canadians living abroad long-term can generally maintain their bank accounts by keeping them active, informing their bank, and managing tax obligations. Practical tips include setting up online banking and monitoring inactivity fees. However, closing accounts may be advisable if permanently emigrating or if maintaining them becomes too complicated. Ultimately, the decision should consider individual circumstances and future plans.

Tax Residency Canadian Tax Obligations for Residents Tax Implications for Temporary Residents

What do I do if I am a Canadian tax resident but don’t have a Canadian address?

Canadian tax residents without a fixed address can use a P.O. box or a friend or family member's address for tax correspondence. The Canada Revenue Agency (CRA) permits these alternatives, ensuring that important tax documents are received in a timely manner. Regularly checking the P.O. box or relying on a trustworthy contact is essential to avoid missing important notices.

What is the 183-day rule?

The 183-day rule in Canadian tax law determines if an individual is a "deemed resident" for tax purposes. Staying in Canada for 183 days or more without significant residential ties results in deemed residency, requiring the filing of a Canadian income tax return on worldwide income. Exceptions exist for those with residential ties in countries with tax treaties, and non-residents are taxed only on Canadian-source income.

Tax Residency Digital Nomad Taxes Tax Implications for Temporary Residents Residency Status Determination Cross-Border Taxation Issues

What are some common Canadian tax credits available?

Common Canadian tax credits include the GST/HST Credit, Disability Tax Credit, Canada Workers Benefit, Canada Caregiver Credit, Canada Training Credit, and Home Accessibility Tax Credit. Each credit has specific eligibility criteria and can help reduce tax burdens, making it beneficial for Canadians to explore these options for maximizing their tax returns.

Tax Residency Canadian Tax Obligations for Residents

Can I claim medical expenses incurred abroad on my Canadian tax return?

Canadian taxpayers can generally claim medical expenses incurred abroad on their tax returns, including a variety of healthcare costs and travel expenses related to medical treatment, provided certain conditions are met. Claims can be made for any 12-month period ending in the tax year filed, and documentation should be kept for verification. Only unreimbursed expenses can be claimed, and residency status may affect tax obligations.

Tax Residency Canadian Tax Obligations for Residents Tax Implications for Temporary Residents

How do I register my business?

To register a business in Canada, first decide on a business structure (sole proprietorship, partnership, corporation, or co-operative). Choose a unique business name, obtain a Business Number (BN) through the Business Registration Online service, and register for necessary accounts with the CRA. Additionally, check provincial requirements for registration and permits. If operating in regulated industries, ensure compliance with local regulations. Keeping organized records and staying informed about tax obligations is essential for successful operation.

Tax Residency Canadian Tax Obligations for Residents

What happens if I file my taxes late?

Filing taxes late in Canada incurs penalties from the Canada Revenue Agency (CRA), including a 5% penalty on the balance owed plus 1% for each month late, with higher penalties for repeat offenders. Interest on unpaid taxes accrues daily, and late filing can delay benefit payments. Taxpayers may request relief from penalties under certain circumstances. To avoid issues, it's best to file on time, even if unable to pay the full amount owed.

Tax Residency Canadian Tax Obligations for Residents

How do I properly exit the Canadian tax system?

To exit the Canadian tax system, notify the Canada Revenue Agency (CRA) of your departure, file a final tax return covering your residency period, and be aware of the departure tax on certain assets. After leaving, report only Canadian-source income. Consider tax treaties, moving expenses, and consult a tax professional for guidance.

Tax Residency Canadian Tax Obligations for Residents Tax Implications for Temporary Residents

As a Canadian digital nomad, do I need to charge GST/HST on services provided to foreign clients?

Canadian digital nomads typically do not need to charge GST/HST on services provided to foreign clients, as these are considered zero-rated exports. However, they must register for GST/HST if their worldwide taxable supplies exceed $30,000. It's important to verify the client's location and the nature of the service, and to maintain good records. Consulting a tax professional is advisable for specific situations.

Tax Residency Digital Nomad Taxes Canadian Tax Obligations for Residents

What tax deductions am I eligible for as a Canadian digital nomad?

To claim employment expenses for a home office as a digital nomad: • Your employer must provide a T2200 form, confirming that working from home is required. • The home office must meet CRA conditions for exclusivity and use. • You must maintain Canadian tax residency to claim the expenses.

Digital Nomad Taxes Canadian Tax Obligations for Residents Tax Implications for Temporary Residents

Can I keep Canadian personal tax residency while changing my business tax residency?

You can maintain Canadian personal tax residency while changing your business tax residency if you keep significant residential ties to Canada, such as a home and family. However, severing these ties may result in losing personal tax residency. It's important to consult tax professionals to understand the implications and ensure compliance with tax laws in both Canada and the new country.

Canadian Tax Obligations for Residents Residency Status Determination Tax Residency Classification

What tax deductions am I eligible for as a Canadian student?

Canadian students can benefit from various tax deductions and credits, including the tuition tax credit, interest on student loans, moving expenses, child care expenses, GST/HST credit, Canada Child Benefit, and the Lifelong Learning Plan. Keeping track of expenses and relevant documents is essential for maximizing these benefits.

Tax Residency Canadian Tax Obligations for Residents

Does Canada report income to other countries?

Canada requires residents to report all income, including foreign income, through mechanisms like the Foreign Income Verification Statement (Form T1135) for specified foreign property. It participates in the OECD's BEPS initiative for Country-by-Country reporting and has international agreements to avoid double taxation and share tax information, ensuring compliance and preventing tax evasion.

International Tax Compliance Cross-Border Taxation Issues Foreign Income Reporting Obligations OECD Compliance Initiatives International Tax Information Exchange

Are moving expenses tax-deductible if I relocated for work?

In Canada, moving expenses may be tax-deductible if you relocated for work, provided you meet certain criteria, such as moving to a location at least 40 kilometers closer to your new workplace. Eligible expenses include transportation, travel, temporary living costs, and expenses related to selling and purchasing homes. To claim, complete Form T1-M and report the deduction on your tax return. Keep receipts, and note that if your expenses exceed your income, you can carry forward the unused portion to future years.

Canadian Tax Obligations for Residents Tax Implications for Temporary Residents Residency Compliance Guidelines

Are there any tax credits available for first-time home buyers in Canada?

First-time home buyers in Canada can access several tax credits and incentives, including the First-Time Home Buyers' Tax Credit (up to $1,500), the Home Buyers' Plan (withdraw up to $35,000 tax-free from RRSPs), and the First Home Savings Account (tax-deductible contributions and tax-free withdrawals). Additionally, a GST/HST rebate is available for new home purchases, and there are other government programs aimed at supporting first-time buyers. Filing an income tax return is essential to qualify for these benefits.

Tax Residency Canadian Tax Obligations for Residents

What is a capital gain?

Capital gains occur when an asset is sold for more than its adjusted cost base (ACB) plus selling expenses. In Canada, only 50% of capital gains are taxable, and they must be reported on Schedule 3 of the income tax return. Understanding capital gains is crucial for compliance with tax regulations and can help minimize tax burdens, especially with special considerations for donations and exemptions for principal residences.

Canadian Tax Obligations for Residents Tax Implications for Temporary Residents Foreign Income Reporting Obligations

How much money do I need to make as a freelancer or business owner before I get an HST number or declare my income?

In Canada, freelancers and business owners must register for an HST number if their revenue exceeds $30,000 over four consecutive quarters. Regardless of this threshold, all income must be declared on personal tax returns. Voluntary registration is also an option to claim input tax credits. Accurate record-keeping of income and expenses is essential for tax reporting and audits.

Tax Residency Canadian Tax Obligations for Residents Foreign Income Reporting Obligations

How do tax treaties between Canada and other countries affect my tax obligations?

Tax treaties between Canada and other countries aim to avoid double taxation and prevent tax evasion, impacting tax obligations for individuals and businesses engaged in cross-border activities. Key features include definitions of taxes and residency, reduced withholding taxes, limitations on business income taxation, and procedural frameworks for dispute resolution. Canadian residents earning foreign income may benefit from reduced tax rates, while non-residents' Canadian-source income taxation is determined by these treaties. To leverage treaty benefits, individuals may need to verify eligibility and consult tax authorities.

Tax Residency Cross-Border Taxation Issues Canadian Tax Obligations for Residents

What is tax residency?

Tax residency in Canada determines tax obligations based on residential ties, length of stay, and purpose of presence in Canada. Individuals can be classified as residents, non-residents, deemed residents, or deemed non-residents, affecting their income reporting requirements. Understanding residency status is crucial for compliance with tax laws and financial planning.

Tax Residency Classification Canadian Tax Obligations for Residents Residency Status Determination

What are the tax implications of transferring money between Canadian and foreign accounts?

Transferring money between Canadian and foreign accounts is generally not taxable, but large transfers of $10,000 or more must be reported to the Canada Border Services Agency. Income earned abroad must be reported on Canadian tax returns, while gifts and inheritances are typically not taxable. If owning foreign property valued over $100,000 CAD, Form T1135 must be filed. Currency exchange gains may be taxable. Consulting a tax professional is advisable for complex situations.

Tax Residency Foreign Income Reporting Obligations Canadian Tax Obligations for Residents