The Health Spending Account for Business Owners and Incorporated Professionals

Are you tired of using your hard-earned after-tax dollars to cover medical expenses? As a business owner, the burden of managing healthcare costs can be overwhelming. However, there’s a little-known solution that can alleviate this financial strain – the Health Spending Account.

Designed specifically for entrepreneurs like you, the Health Spending Account offers a tax-efficient way to manage medical expenses. Say goodbye to paying out of pocket with after-tax dollars for your healthcare needs, and let’s explore the advantages of this specialized account tailored to meet the unique needs of business owners and incorporated professionals.

Who’s eligible?

The Health Spending Account is available to a wide range of businesses, making it an inclusive and flexible solution. Small businesses, professional corporations, and corporations that wish to supplement an existing health plan are all eligible to participate in this program. Whether you run a small family-owned enterprise, a professional practice, or a larger corporate entity, the Health Spending Account can cater to your specific needs and provide valuable healthcare benefits for you and your employees.

What are the benefits?

Tax Deductibility for Corporations

As a business owner or incorporated professional, you know the significance of minimizing tax burdens. The Health Spending Account allows your corporation to make contributions that are 100 percent tax-deductible. By taking advantage of this tax benefit, you can reduce your corporation’s taxable income, resulting in lower overall taxes. This leaves you with more funds to reinvest in your business, expand operations, or reward your hardworking employees.

Tax-Free Benefits for You and Your Employees

The Health Spending Account offers tax-free reimbursements for both you, as the business owner or incorporated professional, and your employees. Any medical expense covered through the account is received as tax-free income. This means you get to retain more of your earnings while providing valuable healthcare benefits to your workforce without increasing their taxable income. It’s a win-win situation that fosters employee satisfaction and loyalty.

No monthly premium to pay and cost-efficient

A Health Spending Account (HSA) offers a highly cost-efficient approach to managing medical expenses, providing individuals and businesses with significant financial advantages. One of the key benefits of an HSA is that there is no monthly premium to pay, unlike traditional health insurance plans. This means that participants can access valuable healthcare benefits without the burden of regular premium payments. With no ongoing costs, the HSA allows individuals and businesses to allocate their funds more strategically, ensuring that their healthcare budget is utilized efficiently. This cost-effective feature makes the Health Spending Account an attractive option for those seeking to optimize their healthcare spending while enjoying comprehensive medical coverage.

How it works

The Health Spending Account simplifies the process of managing healthcare expenses:

1. Employees pay for medical services out of pocket.

2. The employee submits the claim for reimbursement.

3. The claim amount is then reimbursed tax-free through the corporation’s account.

4. The claim is reimbursed to the employee.

This streamlined process eliminates the complexities associated with traditional health insurance plans, saving you time and effort.

To learn more about how a health spending account can benefit you, please reach out today to book a meeting, and we would be happy to help.

Protecting Key Talent using Group Benefits

Building a Sustainable Future Together

As specialists in group benefits, the primary goal is to cultivate a sustainable future by collaborating closely with clients. The belief is that an informed and engaged workforce is pivotal for the success of any organization. A key component of this vision is the protection of the organization’s essential talent. This article delves into how group benefits can be instrumental in safeguarding an organization’s most treasured resource: its people.

The Importance of Essential Talent

Essential talent encompasses those employees who bring critical skills, expertise, and knowledge that propel an organization’s growth and success. These individuals form the core of any organization, ensuring its prosperity in the competitive market. Retaining such invaluable members is crucial as their absence can significantly affect business operations, productivity, and overall morale.

Challenges in Retaining Essential Talent

In the ever-evolving job market, holding onto essential talent can be a daunting task. Numerous factors, including enticing offers from rivals, opportunities for personal growth, work-life equilibrium, and employee well-being, can influence retention. For employers, recognizing and addressing these challenges is vital to safeguard top performers and sustain a competitive advantage.

The Significance of Group Benefits

Group benefits serve as a potent strategy in attracting and retaining essential talent. By presenting comprehensive and tailored benefits packages, organizations showcase their dedication to the well-being, security, and future of their employees. Here are some pivotal aspects of group benefits that aid in retaining essential talent:

  1. Health and Wellness Coverage: Offering comprehensive health and wellness benefits, such as medical, dental, and vision plans, not only fosters a healthy workforce but also signifies an organization’s commitment to overall employee well-being. Employees who feel this support are more inclined to stay loyal.
  2. Income Protection: Many group benefits packages encompass disability insurance, offering financial security for employees facing injuries or illnesses that hinder their work. Such provisions alleviate financial concerns during tough times, fostering a sense of stability and encouraging talent to remain with the organization.
  3. Retirement Planning: A meticulously crafted retirement plan appeals to essential talent. It signifies an organization’s concern for their future and dedication to ensuring their financial comfort during retirement. Contributing to such plans also strengthens the bond between employers and employees.
  4. Support for Work-Life Balance: Benefits that champion work-life balance, like flexible work schedules, paid leaves, and family leaves, reflect an organization’s understanding of the significance of a balanced life. Employees who sense this flexibility are more likely to remain devoted.
  5. Career Advancement: Benefits can also encompass professional development and training opportunities. Investing in employee growth not only sharpens their skills but also underlines an organization’s commitment to their long-term achievements.

Educational Approach and Teamwork

The role of group benefits specialists is to offer educational support and foster collaboration with clients. Through open dialogues about an organization’s aspirations and needs, it’s possible to design group benefits packages that resonate with specific demands. The collective goal is to nurture and protect essential talent, ensuring a sustainable future.

Protecting essential talent through group benefits is more than a strategic move; it embodies a dedication to employee welfare. By investing in the well-being, security, and future of employees, organizations not only boost loyalty and retention but also lay the foundation for a robust and sustainable future. The journey ahead is one of partnership, aiming for a flourishing and vibrant workforce.

Exploring the Value of Group Benefit Plans for Your Employees

In today’s ever-evolving workplace landscape, employees place a premium on several key factors:

1. Alignment with employer values, especially sustainability.

2. Achieving a harmonious work-life balance.

3. Assistance in coping with the rising cost of living expenses.

4. Opportunities for delayed retirement.

5. Cultivating a sense of belonging within the workplace.

6. Flexibility in terms of work hours and location.

7. Ensuring job security.

If your business is experiencing growth and you’re considering adding group benefit plans to your employee offerings, you’re in the right place. We understand the importance of providing the right employee benefits solution for your business.

Understanding Group Benefit Plans and Their Value

Group benefit plans form a crucial part of a company’s total compensation package, available to employees regardless of their seniority, position, or qualifications. These plans often encompass medical coverage for employees and their dependents. While it may seem like an additional expense during a period of growth, offering employee insurance benefits is essential for the long-term sustainability of your business.

So, why should your company consider offering group insurance benefits? Here are some compelling reasons:

1. Convenience: Group insurance benefits simplify healthcare coverage for your employees and their families.

2. Workforce Protection: These benefits provide a safety net for your staff, promoting their well-being.

3. Staff Retention: Offering benefits can help you retain valuable employees, reducing turnover.

4. Tax Benefits: Group insurance plans offer tax advantages for both employers and employees.

5. Customization: Plans can be tailored to meet your business’s unique needs.

6. Morale Boost: Providing benefits can boost productivity and morale among your workforce.

What’s Covered by Group Insurance Plans?

Group insurance plans typically cover medical-related expenses that provincial healthcare plans might not fully address. This coverage can include paramedical and ambulance services, dental care, eye care, hospital stays, and certain prescription drugs. Additionally, you have the option to combine group benefits plans with retirement and savings plans.

Types of Group Benefits Plans

Various types of group benefits plans are available, each catering to different company needs and preferences. The most popular options include:

1. Fully-Insured

2. Self-Funded

3. Level-Funded

No matter the size of your business, there’s a group insurance benefit plan that suits your needs. We offer flexible and innovative plans that anticipate your requirements. Our services aim to reduce your administrative workload, allowing you to focus on critical aspects of your business.

Is Group Insurance Cost-Effective?

One of the financial advantages of group insurance is lower premiums while maintaining coverage equivalent to individual health insurance. Typically, employers cover most of the group benefit plan costs, with employees contributing a small percentage of their salary towards the monthly premium. If you’re concerned about the tax implications of providing benefits at work, it’s advisable to with us for specific details.

In conclusion, offering group benefit plans is a strategic move to attract and retain top talent while promoting employee well-being and financial security. Whether you have a small or large business, we are here to assist you in finding the right plan that aligns with your organization’s needs and objectives.

Stay Ahead in 2024: A Comprehensive Checklist for Federal Tax Updates

With the upcoming 2024 Canadian tax rule changes, it’s important to review your financial strategies. We’ve identified the key changes that we expect to influence financial decisions for investors, business owners, incorporated professionals, retirees, and individuals with high income or net worth.


Capital Gains Inclusion Rate

Starting on June 25, 2024, the tax on capital gains is changing. Until now, you would only have to include half of your capital gains in your income for tax purposes. But after that date, you’ll have to include two-thirds of any capital gains over $250,000 on your tax return. This is also the case for employee stock options. 

Consequently, for corporations and trusts, they will have to include two-thirds of all their capital gains, no matter the amount. This is a significant change. 


Lifetime Capital Gains Exemption (LCGE)

The budget proposes increasing the LCGE for qualified capital gains from $1,016,836 to $1.25 million, effective for sales made after June 24, 2024. This change increases tax benefits for individuals selling certain types of property, such as small business shares or farming and fishing assets.


Alternative Minimum Tax (AMT)
The 2023 budget included updates to the AMT, suggesting revising the charitable donation tax credit for AMT calculations, increasing the claimable amount from 50% to 80%.


Employee Ownership Trust (EOT)

The budget proposes a tax exemption on up to $10 million in capital gains for individuals selling their businesses to an EOT if certain criteria are met. 


Canadian Entrepreneurs’ Incentive

This new tax measure offers a reduced inclusion rate of 1/3 for up to $2 million in capital gains during an individual’s lifetime, with this limit being phased in over 10 years. However, it’s important to know that not all businesses qualify—this doesn’t apply to businesses in professional services, finance, real estate, hospitality, arts, entertainment, or personal care.

Below is a checklist to help you navigate the tax adjustments and ensure your financial plans are updated and aligned with the new rules.


Investors

  • Investments: Evaluate portfolios to identify where capital gains can be realized under the current lower inclusion rate.

  • Investment Property: Consider advancing the sale of such properties to benefit from the existing capital gains rate.

  • Estate Planning: Revise plans to address potential increases in capital gains taxes, ensuring estates are structured for tax efficiency.

  • Employee Stock Options: Adjust the timing of exercising stock options to align with the upcoming changes in inclusion rates.


Business Owners:

  • Corporate Investments: Assess the impact of increased inclusion rates on corporately held assets, exploring the timing of gains realization. Review trust-held investments. 

  • Lifetime Capital Gains Exemption: Maximize the benefits of the increased LCGE for qualifying business assets.

  • Employee Ownership Trust: Consider the advantages of transferring business ownership via an EOT.

  • Succession Planning: Update your succession plans to consider the potential impact of capital gains tax changes.

  • Entrepreneurs Incentive: Check if you are eligible to reduce capital gains taxes. 


Incorporated Professionals:

  • Investments: Assess both personal and corporate investments for the new inclusion rate. Determine the most tax-effective structure for holding and realizing gains from investments.

  • Succession Planning: Time the potential sale of your professional corporation to capitalize on the current LCGE.


Retirees:

  • Estate Planning: Update estate plans considering the impending increase in capital gains rates.

  • Life Insurance Coverage: Ensure life insurance is adequate to cover increased capital gains tax liabilities upon death.

  • Non-Registered Investments and Retirement Income: Review your strategy for non-registered investments to manage taxes on gains and adjust your retirement income plans to accommodate the upcoming changes in capital gains rates.


Individuals with High Income or Net Worth: 

  • Investments: Evaluate portfolios to identify where capital gains can be realized under the current lower inclusion rate. Review trust-held investments. 

  • Investment Property: Consider advancing the sale of such properties to benefit from the existing capital gains rate.

  • Estate Planning: Revise plans to address potential increases in capital gains taxes, ensuring estates are structured for tax efficiency.

  • Charitable Contributions: Align your charitable giving strategies with the new tax benefits and AMT considerations.

Please reach out to us to review your financial strategy together and ensure it aligns with the upcoming changes. 

2024 Federal Budget Highlights

On April 16, 2024, Canada’s Deputy Prime Minister and Finance Minister, Chrystia Freeland, presented the federal budget.

While there are no changes to federal personal or corporate tax rates, the budget introduces:

  • An increase in the portion of capital gains subject to tax, rising from 50% to 66.67%, starting June 25, 2024. However, individual gains up to $250,000 annually will retain the 50% rate.

  • The lifetime exemption limit for capital gains has been raised to $1.25 million. Additionally, a new one-third inclusion rate is set for up to $2 million in capital gains for entrepreneurs.

  • The budget confirms the alternative minimum tax changes planned for January 1, 2024 but lessens their impact on charitable contributions.

  • This year’s budget emphasizes making housing more affordable. It provides incentives for building rental properties specifically designed for long-term tenants.

  • Introduces new support measures to aid people buying their first homes.

  • Costs for specific patents and tech equipment and software can now be written off immediately.

  • Canada carbon rebate for small business.

Capital Gains Inclusion Rate

The budget suggests raising the inclusion rate on capital gains after June 24, 2024:

  • Corporations and trusts, from 50% to 66.67%.

  • Individuals, on capital gains over $250,000 annually, also from 50% to 66.67%.

For individuals, the $250,000 annual threshold that applies to net capital gains—the amount remaining after offsetting any capital losses. This includes gains acquired directly by an individual or indirectly through entities such as partnerships or trusts. Essentially, this threshold acts as a deductible, considering various factors to determine the net gains eligible for the increased capital gains tax rate.

Individuals in the highest income bracket, who earn above the top marginal tax rate threshold, will face a higher tax rate on capital gains exceeding $250,000 due to these changes. Furthermore, the budget modifies the tax deduction for employee stock options to align with the updated capital gains taxation rates yet maintains the initial 50% deduction for the first $250,000 in gains. Regarding previously incurred financial losses, the budget plans to adjust the value of these net capital losses from past years so that they are consistent with the current gains, upholding the uniformity with the new inclusion rate.

The budget outlines transitional rules for the upcoming tax year that straddles the implementation date of the new capital gains rates. If the tax year begins before June 25, 2024, but ends afterward, capital gains realized before June 25 will be taxed at the existing rate of 50%. However, gains accrued after June 24, 2024, will be subject to the increased rate of 66.67%. It’s important to note that the new $250,000 threshold for higher tax rates will only apply to gains made after June 24.

Consequently, for individuals earning capital gains beyond the $250,000 threshold and who fall into the highest income tax bracket, new rates will be effective as outlined in the table below. Specifically, this pertains to individuals with taxable incomes exceeding $355,845 in Alberta, $252,752 in British Columbia, $1,103,478 in Newfoundland and Labrador, $500,000 in the Yukon, and $246,752 in all other regions.

Further details and guidance on these new rules are expected to be provided in future announcements.

Lifetime Capital Gains Exemption

The budget proposes raising the Lifetime Capital Gains Exemption (LCGE) for qualified capital gains from $1,016,836 to $1.25 million, effective for sales made after June 24, 2024. Additionally, the exemption will once again be adjusted for inflation starting in 2026. This change aims to increase the tax benefits for individuals selling certain types of property, such as small business shares or farming and fishing assets.

Canadian Entrepreneurs’ Incentive

The Canadian Entrepreneurs’ Incentive is a new tax measure which provides a reduced inclusion rate on capital gains from the disposition of qualifying small business shares.

Qualifications for the incentive include:

  • Shares must be of a small business corporation directly owned by an individual.

  • For 24 months before selling, over half the corporation’s assets must be actively used in a Canadian business or be certain connected assets.

  • The seller needs to be a founding investor who held the shares for at least five years.

  • The seller must have been actively involved in the business continuously for five years.

  • The seller must have owned a significant voting share throughout the subscription period.

  • The incentive does not apply to shares linked to professional services, financial, real estate, hospitality, arts, entertainment, or personal care services sectors.

  • The shares must have been acquired at their fair market value.

  • The incentive allows for a reduced inclusion rate of 1/3 for up to $2 million in capital gains during an individual’s lifetime, with this limit being phased in over 10 years.

This measure will apply to dispositions after December 31, 2024.

Alternative Minimum Tax (AMT)

The 2023 budget included updates to the AMT, with proposed changes outlined in the summer of 2023. The budget suggests revising the charitable donation tax credit for AMT calculations, increasing the claimable amount from 50% to 80%.

Further proposed changes to the AMT include:

  • Permitting deductions for the Guaranteed Income Supplement, social assistance, and workers’ compensation benefits.

  • Exempting employee ownership trusts (EOTs) entirely from AMT.

  • Allowing certain tax credits, like federal political contributions, investment tax credits (ITCs), and labour-sponsored funds tax credit, to be carried forward if disallowed under the AMT.

These changes would take effect for tax years beginning after December 31, 2023. Additionally, the budget proposes technical amendments that would exempt specific trusts benefiting Indigenous groups from the AMT.

Employee Ownership Trust (EOT) Tax Exemption

The budget proposes a tax exemption on up to $10 million in capital gains for individuals selling their businesses to an EOT if certain criteria are met:

  • Sale of shares must be from a non-professional corporation.

  • The seller, or their spouse or common-law partner, must have been actively involved in the business for at least two years prior to the sale.

  • The business shares must have been solely owned by the seller or a related person or partnership for two years before the sale, and mainly used in active business.

  • At least 90% of the EOT’s beneficiaries must be Canadian residents after the sale.

  • If multiple sellers are involved, they must jointly decide how to divide the $10 million exemption

  • If the EOT doesn’t maintain its status or if the business assets used in active business drop below 50% at any point within 36 months after the sale, the tax exemption may be revoked.

  • For Alternative Minimum Tax purposes, the exempted gains will face a 30% inclusion rate.

  • The normal reassessment period for the exemption is extended by three years.

  • The measure now also covers the sale of shares to a worker cooperative corporation.

This exemption is valid for sales occurring from January 1, 2024, to December 31, 2026.

Home Buyers Plan (HBP)

The budget proposes enhancements to the HBP for 2024 and beyond, effective for withdrawals after April 16, 2024. These include:

  • Raising the RRSP withdrawal limit from $35,000 to $60,000 to support first-time homebuyers and purchases for those with disabilities.

  • Extending the grace period before repayment starts from two to five years for withdrawals made between January 1, 2022, and December 31, 2025, deferring the start of the repayment period and thereby providing new homeowners additional time before they need to commence repayments

Interest Deductions and Purpose-Built Rental Housing

The budget proposes a selective exemption from the Excessive Interest and Financing Expenses Limitation (EIFEL) rules for certain interest and financing expenses related to arm’s length financing. This exemption is for the construction or purchase of eligible purpose-built rental housing in Canada and applies to expenses incurred before January 1, 2036. To qualify, the housing must be a residential complex with either at least four private apartment units, each with its own kitchen, bathroom, and living areas, or 10 private rooms or suites. Additionally, at least 90% of the units must be designated for long-term rental. This exemption will be effective for tax years starting on or after October 1, 2023, in line with the broader EIFEL regulations.

Accelerated Capital Cost Allowance (CCA) – Purpose built rental housing

The budget introduces an accelerated CCA of 10% for new rental projects that start construction between April 16, 2024, and December 31, 2030, and are completed by December 31, 2035. This accelerated depreciation applies to projects that convert commercial properties into residential complexes or expand existing residential buildings that meet specific criteria under the EIFEL rules. However, it does not cover renovations to existing residential complexes.

Additionally, these investments will benefit from the Accelerated Investment Incentive, which allows for immediate depreciation deductions for properties put into use before 2028. Starting in 2028, the regular depreciation rules, including the half-year rule, will apply.

Accelerated Capital Cost Allowance (CCA)- Productivity-enhancing assets

The budget introduces immediate expensing for newly acquired properties that become operational between April 16, 2024, and December 31, 2026. This applies to specific categories such as:

  • Class 44- Patents and rights to patented information

  • Class 46- Data network infrastructure and related software

  • Class 50- General electronic data-processing equipment and software

Properties that are put into use between 2027 and 2028 will continue to benefit from the Accelerated Investment Incentive.

To qualify for this accelerated depreciation, the property must not have been previously owned by the taxpayer or someone closely connected to them, and it must not have been received as part of a tax-deferred deal. Also, if a tax year is shorter, the depreciation will be adjusted accordingly and will not carry over to the next year.

Canada Carbon Rebate for Small Businesses

The budget introduces a Canada Carbon Rebate for small businesses, offering a new refundable tax credit automatically. To be eligible, a Canadian-controlled private corporation must:

  • File a tax return for its 2023 tax year by July 15, 2024, for the fuel charge years from 2019-20 to 2023-24. For subsequent fuel charge years, it must file a tax return for the tax year that ends within that fuel charge year.

  • Employ 499 or fewer people across Canada during the year that corresponds with the fuel charge year.

The amount of the tax credit for each eligible business will depend on:

  • The province where the company had employees during the fuel charge year.

  • The number of employees in that province multiplied by a rate set by the Minister of Finance for that year.

  • The CRA will automatically calculate and issue the tax credit to qualifying businesses.

We can help!

Wondering how this year’s budget will impact your finances or your business? We can help – give us a call today!

Tax tips to know before filing your 2023 income tax

This year’s tax deadline is April 30, 2024. It’s important to make sure you’re claiming all the credits and deductions you’re eligible for. We’ve separated this article into 2 sections: 

  • What’s new for 2023

  • Individuals and Families

What’s New for 2023

Advanced Canada Workers Benefit (ACWB)

Automatic advance payments of the Canada Workers Benefit (CWB) are now seamlessly distributed through the ACWB program to individuals who received the benefit in the last tax year. However, it’s important to note that not everyone who received the CWB in the previous tax year will automatically receive the ACWB payments. Only individuals who filed their 2022 tax return before November 1, 2023, are eligible for the ACWB payments.

Furthermore, it’s worth mentioning that the ACWB program eliminates the need to file Form RC201. Recipients are no longer required to fill out this form. Instead, starting in 2023, individuals should report the amounts from their RC210 slip on Schedule 6, Canada Workers Benefit, of their tax return. Additionally, for eligible spouses, the option to claim the basic amount for the CWB is available regardless of who received the RC210 slip.

Deduction for Tools (Tradespersons and Apprentice Mechanics)

Starting in 2023, the maximum employment deduction for eligible tools of tradespersons has risen from $500 to $1,000. Consequently, the threshold for expenses eligible for the apprentice mechanics tools deduction has also been adjusted. 

Temporary Flat Rate Method for Home Office Expenses

For the year 2023, the temporary flat rate method for claiming home office expenses is not applicable. Consequently, taxpayers seeking to claim such expenses for 2023 must utilize the detailed method and obtain a completed Form T2200, Declaration of Conditions of Employment, from their employer.

Federal, Provincial, and Territorial COVID-19 repayments

Repayments of COVID-19 benefits at the federal, provincial, and territorial levels, made after December 31, 2022, can be deducted and claimed.

First Home Savings Account (FHSA)

The FHSA is a registered plan designed to aid individuals in saving for their first home. Starting April 1, 2023, contributions made to an FHSA are typically deductible, and eligible withdrawals made from an FHSA for purchasing a qualifying home are tax-free. 

Property Flipping

Starting January 1, 2023, any profit generated from the sale of a housing unit (including rental properties) situated in Canada, or a right to acquire a housing unit in Canada, that you owned or held for less than 365 consecutive days prior to its sale is considered business income rather than a capital gain. This is applicable unless the property was already classified as inventory or the sale occurred due to, or in anticipation of specific life events. 

Multigenerational Home Renovation Tax Credit (MHRTC)

The MHRTC is a refundable tax credit designed to enable eligible individuals to seek reimbursement for specific renovation expenses incurred in establishing a secondary unit within an eligible dwelling. This enables a qualifying individual to live with their qualifying relative. If eligible, you can claim up to $50,000 in qualifying expenditures for each renovation project completed, with a maximum credit of $7,500 for each eligible claim. 

Fuel Charge Proceeds Return to Farmers Tax Credit

The Fuel Charge Proceeds Return to Farmers Tax Credit is now accessible to self-employed farmers and individuals involved in a partnership operating a farming business with one or more permanent establishments located in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan. If eligible, you may be entitled to a refund of a portion of your fuel charge proceeds. 

For Individuals and Families

Canada Training Credit (CTC)

The CTC is a refundable tax credit available to help Canadians with the cost of eligible training fees.

To qualify for the CTC, you need to fill out Schedule 11 for the following:

  1. Tuition fees and other applicable fees paid to an eligible educational institution in Canada for courses taken in 2023.

  2. Fees paid to specific organizations for occupational, trade, or professional examinations undertaken in 2023.

To be eligible for the CTC, you must meet all these conditions:

  • You resided in Canada for the entire year of 2023.

  • You were at least 26 years old but less than 66 years old at the end of the year.

  • Your most recent notice of assessment or reassessment for 2022 shows a Canada Training Credit Limit for 2023.

Canada Caregiver Credit (CCC)

The CCC is a non-refundable tax credit aimed at assisting individuals who provide support to a spouse, common-law partner, or dependent with a physical or mental impairment, as outlined by the CRA.

You might be eligible for the CCC if you aid:

  • Your spouse or common-law partner dealing with a physical or mental impairment.

  • Dependents such as children, grandchildren, parents, grandparents, siblings, uncles, aunts, nieces, or nephews residing in Canada, who rely on you for consistent provision of basic needs like food, shelter, and clothing.

The amount you can claim varies depending on your relationship to the individual, your circumstances, their net income, and whether other credits are claimed for them.

Child Care Expenses

Child care expenses encompass payments made by you or someone else to arrange care for an eligible child. This care allows you to participate in income-earning activities, pursue education, or conduct research funded by a grant.

If you qualify, you can claim certain childcare expenses as deductions when you file your personal income tax return.

Disability Tax Credit (DTC)

The DTC is a non-refundable tax credit designed to support individuals with disabilities, or their family members who provide support, by reducing their income tax responsibilities.

To be eligible for this credit, individuals must have a significant and enduring impairment. Once approved, they can apply the credit when filing their taxes.

The DTC aims to ease some of the extra costs linked with the disability by lessening the individual’s income tax burden.

Moving

You can claim moving expenses you paid during the year if you meet these conditions

  • You moved to a new residence for work reasons, to start a business in a different area, or to attend a post-secondary program as a full-time student at a university, college, or other educational institution.

  • Your new residence must be at least 40 kilometres closer, determined by the shortest public route, to your new work location or educational institution.

Interest Paid on Student Loans

You might qualify to claim an amount for the interest paid on your student loan for post-secondary education if it was obtained under the following acts:

  • Canada Student Loans Act

  • Canada Student Financial Assistance Act

  • Apprentice Loans Act

  • Provincial or territorial government laws that are similar to the aforementioned acts.

Only you, or a person related to you, can claim the interest paid on the loan within the tax year 2023 or the preceding 5 years.

Donations and Gifts

When you or your spouse/common-law partner donate to eligible institutions, you might be eligible for federal and provincial/territorial non-refundable tax credits when you file your income tax and benefit return.

Normally, you can claim a portion or the full eligible donation amount, capped at 75% of your net income for the tax year.

Seeking guidance?

Wondering if you qualify for valuable tax credits or deductions? Reach out to us – as your financial advisor, we’re here to assist you in optimizing your finances and maximizing your savings.

Source: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/whats-new.html

Canada Training Credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-45350-canada-training-credit.html

Canada Caregiver Credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/canada-caregiver-amount.html

Child Care Expense: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses.html

Disability Tax Credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit.html

Moving: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21900-moving-expenses.html

Interest Paid on Student Loans: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31900-interest-paid-on-your-student-loans.html

Donations and Gifts: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-34900-donations-gifts.html

Why A Buy-Sell Agreement Is Vital For Your Business

Why A Buy-Sell Agreement Is Vital For Your Business

The purpose of a buy-sell agreement is to establish a set of rules or actions (that are legally binding) for what must happen to a business if one or more of the business owners is no longer involved.

Why does my business need a buy‐sell agreement?

A buy-sell agreement is vital for your business as it protects the shareholders and the business itself if one of the partners exits the business for any reason.

A buy-sell agreement offers so many benefits for your business. It:

  • Can help maintain the continuity of your business.
  • Minimize disputes between remaining co-owners and the family of the departing owner.
  • Decrease stress and uncertainty for all business owners.
  • Protect business assets and liquidity by including a solid financial and tax plan.

What are the different types of buy-sell agreements?

These are the most common types of buy-sell agreements:

  • A cross-purchase agreement. In this agreement, each remaining shareholder agrees to buy a percentage of the shares owned by the departing shareholder. The purchase can be funded by life insurance in case of the death of one of the shareholders.
  • A promissory note agreement. Each shareholder has corporate-owned life insurance in this agreement, and the corporation is the beneficiary. If a shareholder dies, the surviving shareholder(s) use a promissory note to purchase the deceased’s shares from their estate. The shareholders then use a capital dividend provided by the life insurance to pay off the promissory note.
  • A share redemption arrangement. This is similar to the promissory note agreement set up, but no promissory note is involved, and the capital dividend account pays for the deceased shareholder’s shares.

What do I need to cover in my buy‐sell agreement?

Your buy-sell agreement must address the following:

  • Valuation of the company.
  • Ownership interests.
  • Buyout clauses.
  • Terms of payment.
  • What will happen in the event of any “triggering events.”. These events can include a disagreement between business owners, a business owner getting divorced or retiring, a business owner going bankrupt or becoming disabled, or a business partner dying.

What is the best way to fund my buy-sell agreement?

This needs to be addressed when putting the buy-sell agreement together and can be challenging in the case of some “triggers,” such as a business owner getting a divorce or a disagreement between business owners.

In the case of the death of a business owner or a business owner becoming disabled, the buy-sell agreement can be funded by insurance. Insurance provides both immediate capital and significant tax benefits.

We Can Help!

Buy-sell agreements can be complex and challenging, but they are vital to protect your business and your personal interests. We can explain the best way to set one up – reach out to us today to get started!

Ontario’s 2024 Budget Highlights

On March 26, 2024, the Ontario Minister of Finance announced the province’s 2024 budget. This article highlights the most important things you need to know about this budget, broken into 2 sections:

  • Personal Tax Changes

  • Business Tax Changes


Personal tax changes

There are no changes to the province’s personal tax rates in Budget 2024. 

As a result, Ontario’s personal income tax rate remains as follows: 

Gasoline tax and fuel tax

The Ontario government has chosen to extend the reduced tax rates on gasoline and fuel. This means that the tax you pay when you buy gas or fuel will remain at nine cents per litre until December 31, 2024, instead of ending on June 30, 2024.


Alcohol taxation and fees

The budget reveals that the government plans to review the taxes and fees on beer, wine, and alcoholic beverages.


Property assessment and taxation review

The budget says that Ontario will keep postponing property reassessments while it looks at how property assessments and taxes work. Ontario also plans to talk to different groups about property assessments starting in the early spring.


Housing supply and affordability

The budget says Ontario wants to make it easier for certain cities to:

  • Bring in a Vacant Home Tax

  • Give lower property taxes on new apartment buildings with many units for rent.


Technical amendments

The budget mentions that Ontario might suggest some small changes, like fixing how small estates are handled in the Estate Administration Tax Act of 1998 and adjusting how loans are dealt with during the day in Ontario.


Carbon tax referendum

The budget states that the provincial government plans to introduce a law that would ask the public to vote in a referendum before starting any new provincial carbon pricing program.


Tax system review

The budget states that the government is still looking at how taxes work in the province, which they started doing in the 2023 Ontario budget. 


Business tax changes

There are no changes to the province’s corporate tax rates in Budget 2024. 

As a result, Ontario’s Corporate income tax rate remains as follows:

1 On first $500,000 of active business income.

Ontario computer animation and special effects tax credit

The budget is making changes to who can get the Ontario Computer Animation and Special Effects (OCASE) Tax Credit. Now, for each movie or TV show, a company must spend at least $25,000 on Ontario workers’ wages, with certain timing rules. Also, instructional videos, music videos, and gaming videos won’t count for the credit anymore.

These updated eligibility criteria replace the previous requirement for an eligible film or television production to also be certified for either the Ontario Film and Television Tax Credit or the Ontario Production Services Tax Credit.

The changes start for productions that begin computer animation or special effects work on or after March 26, 2024. 

We can help!

Wondering how this year’s budget will impact your finances or your business? We can help – give us a call today!  

Source: https://budget.ontario.ca/2024/index.html

The Benefits of Working With An Employee Benefits Specialist

We understand that when looking for employee benefits, you’re looking to do so cost-effectively. But it’s essential to make sure you work with an employee benefits specialist, no matter what the price tag is on your benefits package. 

We’ll explain how an employee benefits specialist differs from a generalist and why working with an employee benefits specialist is so important.

How does an employee benefits specialist differ from a generalist?

You may have approached financial advisors who can handle various tasks, such as selling you insurance products, investments, and employee benefits. However, this kind of financial advisor would be considered a generalist, and they lack in-depth knowledge of how complex employee benefits can be.

An employee benefits specialist is the opposite of a generalist. They are licensed advisors who have dedicated their practice to employee benefits. Employee benefits specialist prides themselves on understanding all the nuances associated with employee benefits. A specialist undergoes further training and acquires in-depth knowledge about employee benefits. 

Why is it essential to work with an employee benefits specialist?

Employee benefits plans are complex, and your business could be at risk if your employee benefits program isn’t administered correctly. As you know, employee benefits form a part of an employee’s compensation package. 

These are the benefits of working with an employee benefits specialist:

  • We help provide the best employee benefits suited for you and your business. 
  • We provide a smooth employee enrollment program so your employee saves time. 
  • We help your employees with questions about their employee benefits program. 
  • We educate your employees about how the benefits program works for them. 
  • We know how to deal with complicated benefits claims. 
  • We can explain how to reduce the risk of any liabilities associated with offering employee benefits programs—for example, offering mandatory enrollment versus voluntary enrollment in a benefits program. You can run into issues with voluntary enrollment if your enrollment level is below the required threshold.
  • We can explain how your benefits program can work for different employment situations, such as seasonal and contract workers.

The bottom line is that working with an employee benefits specialist means you’ll have access to a well-designed and administered benefits plan. 

How can I get started working with an employee benefits specialist?

Ready to make a move to working with an employee benefits specialist? We’re here to help you get the benefits program to attract and retain employees. Call us today to get started!

Video link: https://vimeo.com/770504723/50ba274537