Common Audit Triggers in Canada

Businesswoman Analyzing Taxes With Magnifying Glass

Here at Liu & Associates, we know that audits are no fun. Whether you are an individual or run a business, this can be a stressful situation. The CRA does not select audit candidates at random. Instead, they use a system of risk assessment that flags returns considered to be “high risk.”  Fortunately, there are certain audit triggers you can avoid in order to circumvent a tax audit. Here are the most common ones in Canada: Unusual Deductions or Changes When you file your taxes with the CRA, they will look for consistencies in your return compared to other years. ...Read More

What Business Expenses Are Tax-Deductible?

Business woman using calculator and writing make note

Do you know what tax deductions your business is eligible for? When tax season comes around, it’s important to make the most out of eligible deductions to save you money and help your business grow! However, before you start claiming whatever you can for your business, be sure that all deductions are supported by original invoices and paperwork. Doing so is the best way to avoid an audit or any issues if you are audited. Eligible Expenses to Claim As a general rule, businesses can claim expenses that maintain the business and ensure that it is operational. And there is ...Read More

Tax Guide for Small Businesses

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Paying your taxes as an individual is one thing but once you start running a small business, it’s a whole different game! There are many aspects of a small business to take into consideration when it comes to filing your taxes from what you can deduct to how to manage employee payroll. But don’t worry, we have you covered! Liu & Associates is a knowledgeable accounting firm with years of experience filing small business taxes. Let our expertise guide you through the process with this tax guide for small businesses: Common Deductions for Small Businesses While there are many deductions ...Read More

When To Consider Corporate Restructuring

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Corporate restructuring is a great opportunity to examine your business models and create a plan that will facilitate growth and optimize your business for the long term. Corporate restructuring is a process that significantly modifies the financial and operational aspects of a company. While this action is typically taken when a company is facing financial hardships, a company doesn’t have to be in distress to benefit from a restructuring plan. A corporate restructure even when your business is successful can have major benefits! Overall, corporate restructuring is done to modify a company’s operation, structure, or debt to limit financial harm ...Read More

Corporate Tax Planning: 5 Things To Know

Top view of Finance business people or accountants point to the graph and use a calculator to calculate company income, expenses, taxes, and employee bonuses

When you own a corporation, proper tax planning plays an essential role when it comes to making strategic decisions. The main goal is to increase your business’s tax efficiency and remain competitive in your industry. Incorporating proper tax planning into your regular operations ensures that your company is run legitimately. It also allows you to reduce your tax costs and benefit from higher earnings. Unlike personal tax returns, which are relatively simple to prepare, corporate taxes are complex, and not planning them properly, or trying to do them yourself, could result in costly mistakes. What is Corporate Tax Planning? When ...Read More

The CEWS Subsidy + Tax Audits: How to Prepare For an Audit

The Canada Emergency Wage Subsidy (CEWS) was introduced by the Canadian government in March of 2020 to help employers who were adversely impacted by COVID-19. This subsidy covers up to 75% of a business’s employees’ eligible earnings and encourages employers to retain their workers despite a drop in revenue due to closures. However, the CRA will audit employers who received the CEWS subsidy to ensure that they did not receive more money than they were eligible for. The process can be arduous and require a copious amount of documentation. Although claiming the CEWS does not guarantee that your business will ...Read More

The Connection Between Corporate Finances and Individual Finances

They say that you should never mix business with pleasure - but when it comes to finances, the two are connected in a number of ways. Because of the connection between corporate finances and individual finances, it’s important to understand that, while you can approach both in very similar ways, it’s not always a good idea to allow the two to mix. Before we talk about how to keep your corporate and individual finances separate, let’s first look at their similarities and differences: Similarities Between Corporate Finances and Individual Finances The similarities between corporate finances and individual finances all come ...Read More

Changing Corporate Accountants: How to Start

What do you do if you want to change your corporate accountant but feel stuck with your current one because they have been with you for so long? While you may be fiercely loyal to your current accountant, you should focus on putting your company’s needs first! Switching accountants is not an overly complicated process. In fact, most of the steps are taken by your new accounting firm and regulations ensure that file and information transfers are done efficiently. In this article, we’re going to outline those steps and show you how easy it is! But because we don’t recommend ...Read More

What Happens to Unused Tuition Tax Credits?

Tuition tax credits are non-refundable credits, meaning that they will work toward lowering the amount of taxes you owe but they will not be contributed to any refunds. This means that they will help keep your owing taxes low but will not increase the amount you get back on your taxes. Sometimes, however, it works out that the tuition you are claiming exceeds the amount you owe. So what happens to the rest of the tuition tax credit? Does it disappear into obscurity? It doesn’t and the good news is that you can carry forward or transfer any unused credits! ...Read More

What is the Earliest I Can File My Taxes?

woman sitting at desk filing taxes

In Canada, every person must file income tax and benefit returns each year. The due date for having your taxes filed is April 30th - but if you’re self-employed you have until June 15th. So that means if you are filing your 2021 taxes, they will be due April 30th, 2022, and June 15th, 2022, respectively. However, just because you have until the end of April to file your taxes doesn’t mean you have to wait until the last minute! The earliest date that the CRA (Canada Revenue Agency) will start accepting electronically filed tax returns is usually around February ...Read More