December 2011
This issue:
Crackdown on Personal Services Businesses
If you set up a corporation to provide your employment services, the Income Tax Act imposes severe restrictions on the corporation. These rules, called personal services business (PSB) rules, apply only where your services to a third party, and, but for the corporation, you would reasonably be regarded as an employee of the third party…
The Leap Year Bites – Watch Those Deadlines!
Because 2012 is a leap year, some deadlines fall earlier this coming year than normal! If you will be filing a T3 trust tax return, the deadline (assuming a calendar year-end for the trust) is 90 days after the end of the year. Normally that is March 31. This year, because February has 29 days, the 90-day period expires on Friday, March 30…
The 10-Year Limitation on Waiver of Interest
The rules have changed for applications for waiver of interest and penalty. The CRA has a policy of “Taxpayer Relief” (formerly called “Fairness”), under which it may waive interest and penalty in extraordinary circumstances, such as where a taxpayer was affected by illness, where the CRA provided wrong information, where there have been unreasonable delays on the CRA’s part, and various other circumstances…
Make Money Volunteering for a Charity
If you volunteer for a charity, you may be able to make a little money at no cost to the charity. The charity cannot give you a donation receipt for the services you provide for free. A valid donation receipt for tax purpose can only be issued for a donation of property or money. However, suppose the charity pays you for your services and you donate the money back?
Watch Out for Short Taxation Years
A corporation can be deemed to have a year-end for tax purposes, in the middle of its fiscal year, for a number of reasons. One common reason is a change in control of the corporation. If the corporation is sold to new owners, it will be deemed to have a year-end and start a new taxation year…
Do You Make Donations to U.S. Charities?
Do you make donations to charities located in the United States? They may be eligible for a tax credit on your Canadian tax return in one of several ways…
Around the Courts
Reporting income as partners made the wife liable to third parties…tax return reporting can have unexpected consequences! Prince Albert Co-operative Association Ltd. v. Paul Rybka and Tina Rybka
To read more, please see the following article: Tax Tips – December 2011
