I am announcing to the world that there is an exciting new solution to this age old problem: www.DynamicLawyers.com.  The idea is simple: Need a lawyer?  Make a Post.  Get Free Quotes!  The website just launched in Toronto and will be written about in the Toronto Star.  This website is a free and invaluable tool when it comes to finding the right lawyer.  All you have to do is make a free, anonymous, and easy-to-make post of your legal issue(s) and then wait for local lawyers to respond to you by e-mail.  You can request their expertise and quotes for how much their services will cost and give them a timeline as well.

If you’re like many of us, and avoid picking up the phone to call your lawyer, those days are gone.  The role of the lawyer is growing, with more and more areas of specialization.  Today’s world is an ever more litigious society with multiple levels of regulation, heavy taxation and new technologies.  Your chances of needing a lawyer, tax litigation or otherwise, have dramatically increased.

www.DynamicLawyers.com gives everyone access to a vast group of legal expertise instantly.  You simply post your issue, and the lawyer members will bid on your case.

The fully searchable website will become a large database where you can get self-help information in the form of Legal-Ease Guides (e.g. how to incorporate your business, how to get an uncontested divorce, how to fight a traffic ticket, how to draft a will, how to file a small claims court action, etc.).

The site is free, anonymous and will set you in the right direction to making informed decisions.

To illustrate how it works, let’s take a common life scenario.  You come home from a long day at work to find a nasty brown government envelope in your mail.  It’s Canada Revenue Agency and you’re being audited on your income taxes.  Instead of breaking out in a sweat, you can go on www.DynamicLawyers.com and make an anonymous post about your situation.  The network of lawyers is there to reply.  Lawyers may give you an overview of your rights, the risks and potential pitfalls, explain the costs involved, and their experiences with respect to resolving your issue(s), etc.  You can compare the responses you receive.  You’re under no obligation to select a lawyer.  You can then make an informed decision about your course of action.  You may even determine it is best is to seek some representation in your situation from one of the lawyers who have responded.

So go to www.DynamicLawyers.com right now and bookmark this page.  Make legal peace of mind only a click away.  Getting a letter from the tax man (or any other legal issues that pop up) can now go down the stress scale rating.

The beauty of www.DynamicLawyers.com is that you are empowered.  You no longer have to sit back and accept what life throws your way – get informed and put the odds in your favour.  Need a Lawyer?  Make a Post.  Get Free Quotes!

What that means as a small business is; if you do not want a CRA Audit to upset your life, cause you stress and for you to lose thousands of dollars of legitimate deductions because you did not do rock solid tax bookkeeping, then you need an audit proof solution to protect your after tax dollars.

The standard bookkeeping systems make true the words “Two things in life are sure; one is death and the other is taxes.”  This statement is true if you use conventional approaches to record keeping. Quickbooks is not audit ready accounting. If you have to get ready for an audit then you are doing your bookkeeping wrong.

Today’s punitive tax regime that specifically targets small business is raising tax havoc with our small businesses who are struggling just to eke out a small after tax profit. Taxes can kill you just as surely as stress can cause you death. CRA and Stress are spelled the same. A-U-D-I-T.

If you want to live a CRA Tax Free, Stressless life…. Learn to keep a perfect set of books. Our mission is to get the BKS (Bookkeeping Simplified) out there in the market so that small businesses pay only their fair share of taxes. No more tax and no less tax than they are legally obligated to on their non deductible personal expenses.

The tax department gets away with tax payer abuse, simply because the general population keeps quiet that they were abused because of social embarrassment. In reality 2,400 auditors who each do over a hundred audits a year, year after year, creating an amazing secret…. Show me an entrepreneur, and I will show you someone who has had a brush in with CRA or who is paying too much tax.

This secret tax shame either needs exposure, or it needs to be eliminated by learning how to keep tax audit proof books.

Be prepared, this down turn in the economy is going to generate a more aggressive tax man, who will want to replace lost income from less businesses with more dollars from fewer businesses.

It is your choice for what solutions to choose, but you need to make one or the other, failing which death and taxes are spelled the same as taxman.

EQUIVALENT-TO-SPOUSE CREDIT
You cannot claim for the equivalent to spouse credit for a child where the individual is required to pay a support amount for that person.

CAPITAL GAINS AND LOSSES
PRINCIPAL RESIDENCE
When a taxpayer converts a principal residence to an income-producing use, the taxpayer may, within limits, elect to defer recognition of any gain to a later year.

PRIVATE HEALTH SERVICES PLAN
Where an employer enters into a PHSP for an employee, the expenses are generally deductible to the employer and not taxable to the employee.  This deductible/non-taxable status may not apply if the PHSP is only available to shareholders.

BUSINESS PROPERTY INCOME
SALARIES PAID TO CHILDREN – may be disallowed if:
(i)    The amounts were either not paid to them or, upon being paid, were then deposited in bank accounts of either the business or the parents.
(ii)    There was not sufficient documentation and,
(iii)    The children did not declare any amounts on their tax returns.

EDUCATIONAL EXPENSES
Employer-paid tuition and related costs, may not be a taxable benefit to the employee.  This includes courses in a field related to the employee’s responsibilities as well as courses not directly related to the employer’s business such as stress management, employment equity, first aid and language skills.

MOTOR VEHICLE EXPENSE DEDUCTION
Where an employee receives a reasonable per kilometer reimbursement for the use of his/her personal motor vehicle in connection with employment duties, the reimbursement is generally excluded from employment income.

CAPITAL COST ALLOWANCE
If a tax payer buys new vehicles and retains the old fleet, the tax payer can apply capital cost allowance.

RRSP –
HOME BUYERS’ PLAN
The HBP permits an individual to borrow up to $20,000 from his/her RRSP to purchase a home in Canada.  To qualify, the borrower, or his/her spouse, cannot have an owner-occupied home in the four preceding years.  Each spouse may withdraw up to $20,000 from their RRSPs to jointly purchase a home.

ESTATE PLANNING
ELDERLY TAXPAYERS

1.    Sign a Power of Attorney for management of property and personal care matters.
2.    Avoid probate fees by naming beneficiaries to life insurance policies and pension plans, joint ownership and by multiple wills.

FARMING
FARM LOSSES
There is a question that CRA has the right to restrict farm losses as a business loss. Get good advice here.

GST
LAWYERS DISBURSEMENTS
A lawyers disbursements are taxed for GST/HST purposes.

SALES BY INDIVIDUALS OF OWNER-OCCUPIED HOMES
Resale homes by owner occupants are not subject to GST.
Vacant land not used for business purposes or as an investment may be GST exempt. Be sure to double check to see if this fits your circumstances.

Dan White

Where individual bankrupt
(2) Where an individual has become a bankrupt, the following rules are applicable:

(a) the trustee in bankruptcy shall be deemed to be the agent of the bankrupt for all purposes of this Act;

(b) the estate of the bankrupt shall be deemed not to be a trust or an estate for the purposes of this Act;

(c) the income and the taxable income of the individual for any taxation year during which the individual was a bankrupt and for any subsequent year shall be calculated as if

(i) the property of the bankrupt did not pass to and vest in the trustee in bankruptcy on the bankruptcy order being made or the assignment filed but remained vested in the bankrupt, and

(ii) any dealing in the estate of the bankrupt or any act performed in the carrying on of the business of the bankrupt estate by the trustee was done as agent on behalf of the bankrupt and any income of the trustee from such dealing or carrying on is income of the bankrupt and not of the trustee;

(d) except for the purposes of subsections 146(1), 146.01(4) and 146.02(4) and Part X.1,

(i) a taxation year of the individual is deemed to have begun at the beginning of the day on which the individual became a bankrupt, and

(ii) the individual’s last taxation year that began before that day is deemed to have ended immediately before that day;

(d.1) where, by reason of paragraph 128(2)(d), a taxation year of the individual is not a calendar year,

(i) paragraph 146(5)(b) shall, for the purpose of the application of subsection 146(5) to the taxation year, be read as follows:

“128(2)(b) the amount, if any, by which

(i) the taxpayer’s RRSP deduction limit for the particular calendar year in which the taxation year ends

exceeds

(ii) the total of the amounts deducted under this subsection and subsection 128(5.1) in computing the taxpayer’s income for any preceding taxation year that ends in the particular calendar year.”,

and

(ii) paragraph 146(5.1)(b) shall, for the purpose of the application of subsection 146(5.1) to the taxation year, be read as follows:

“128(2)(b) the amount, if any, by which

(i) the taxpayer’s RRSP deduction limit for the particular calendar year in which the taxation year ends

exceeds

(ii) the total of the amount deducted under subsection 128(5) in computing the taxpayer’s income for the year and the amounts deducted under this subsection and subsection 128(5) in computing the taxpayer’s income for any preceding taxation year that ends in the particular calendar year.”;

(d.2) where, by reason of paragraph 128(2)(d), the individual has two taxation years ending in a calendar year, each amount deducted in computing the individual’s income for either of the taxation years shall be deemed, for the purposes of the definition “unused RRSP deduction room” in subsection 146(1) and Part X.1, to have been deducted in computing the individual’s income for the calendar year;

(e) where the individual was a bankrupt at any time in a calendar year the trustee shall, within 90 days from the end of the year, file a return with the Minister, in prescribed form, on behalf of the individual of the individual’s income for any taxation year occurring in the calendar year computed as if

(i) the only income of the individual for that taxation year was the income for the year, if any, arising from dealings in the estate of the bankrupt or acts performed in the carrying on of the business of the bankrupt by the trustee,

(ii) in computing the individual’s taxable income for that taxation year, no deduction were permitted by Division C, other than

(A) an amount under any of paragraphs 110(1)(d) to (d.3) and section 110.6 to the extent that the amount is in respect of an amount included in income under subparagraph (i) for that taxation year, and

(B) an amount under section 111 to the extent that the amount was in respect of a loss of the individual for any taxation year that ended before the individual was discharged absolutely from bankruptcy,

(iii) in computing the individual’s tax payable under this Part for that taxation year, no deduction were allowed

(A) under section 118, 118.01, 118.02, 118.03, 118.2, 118.3, 118.5, 118.6, 118.8 or 118.9,

(B) under section 118.1 with respect to a gift made by the individual on or after the day the individual became bankrupt,

(B.1) under section 118.62 with respect to interest paid on or after the day on which the individual became bankrupt, and

(C) under subsection 127(5) with respect to an expenditure incurred or property acquired by the individual in any taxation year that ends after the individual was discharged absolutely from bankruptcy,

and the trustee is liable to pay any tax so determined for that taxation year;

(f) notwithstanding paragraph 128(2)(e), the individual shall file a separate return of the individual’s income for any taxation year during which the individual was a bankrupt, computed as if

(i) the income required to be reported in respect of the year by the trustee under paragraph 128(2)(e) was not the income of the individual,

(ii) in computing income, the individual was not entitled to deduct any loss sustained by the trustee in the year in dealing with the estate of the bankrupt or in carrying on the business of the bankrupt,

(iii) in computing the individual’s taxable income for the year, no amount were deductible under any of paragraphs 110(1)(d) to (d.3) and section 110.6 in respect of an amount included in income under subparagraph (e)(i), and no amount were deductible under section 111, and

(iv) in computing the individual’s tax payable under this Part for the year, no amount were deductible under

(A) section 118.1 in respect of a gift made before the day on which the individual became bankrupt,

(B) section 118.62 in respect of interest paid before the day on which the individual became bankrupt, or

(C) section 118.61 or 120.2 or subsection 127(5),

and the individual is liable to pay any tax so determined for that taxation year;

(g) notwithstanding subparagraphs 128(2)(e)(ii) and 128(2)(e)(iii) and 128(2)(f)(iii) and 128(2)(f)(iv), where at any time an individual was discharged absolutely from bankruptcy,

(i) in computing the individual’s taxable income for any taxation year that ends after that time, no amount shall be deducted under section 111 in respect of losses for taxation years that ended before that time,

(ii) in computing the individual’s tax payable under this Part for any taxation year that ends after that time,

(A) no amount shall be deducted under section 118.61 or 120.2 in respect of an amount for any taxation year that ended before that time,

(B) no amount shall be deducted under section 118.1 in respect of a gift made before the individual became bankrupt,

(B.1) no amount shall be deducted under section 118.62 in respect of interest paid before the day on which the individual became bankrupt, and

(C) no amount shall be deducted under subsection 127(5) in respect of an expenditure incurred or a property acquired by the individual in any taxation year that ended before that time, and

(iii) the individual’s unused tuition and education tax credits at the end of the last taxation year that ended before that time is deemed to be nil;

(h) where, in a taxation year commencing after an order of discharge has been granted in respect of the individual, the trustee deals in the estate of the individual who was a bankrupt or performs any act in the carrying on of the business of the individual, paragraphs 128(2)(e), 128(2)(f) and 128(2)(g) shall apply as if the individual were a bankrupt in the year; and

(i) the portion of the individual’s non-capital loss for a particular taxation year in which paragraph 128(2)(e) applied in respect of the individual and any preceding taxation year that does not exceed the lesser of

(i) the amount of the individual’s allowable business investment losses for the particular taxation year, and

(ii) any portion of the individual’s non-capital loss for that particular year that was not deducted in computing the individual’s taxable income for any taxation year in which paragraph 128(2)(e) applied in respect of the individual or any preceding taxation year,

shall, for the purpose of determining the individual’s cumulative gains limit under section 110.6 for taxation years following the taxation year in which paragraph 128(2)(e) was last applicable in respect of the individual, be deemed not to have been an allowable business investment loss.

(3) [Repealed, 1998, c. 19, s. 152(4)]

The following article from KPMG, outlining how CRA is targeting international business. For those of you who believe you will pay fewer taxes here in Canada by structuring offshore, those days are over.

There are lots of reasons to be offshore. Saving taxes is not one of them. And why bother, when with less cost of time and money, you can do your own home grown tax strategies.

The fact that CRA can legally demand you prove your offshore connections are free from tax on your worldwide income, means that you walk on precarious ice, while doing your offshore strategies.  Offshore tax savings sound sexy, but so do prostitutes, until you find yourself suffering from what you get in bed with.

With Fintrac and all the other government snooping… being offshore only brings attention to your dealings. So is you need to be there for legitimate business reasons… just keep a good set of books and full paper trail.

The bonus of setting yourself up right if you lose money offshore is that you can take advantage of on shore tax savings.

Dan White

CRA Steps Up International Tax Audits

From KPMG report:

A recent report of the Auditor General (AG) indicates that the CRA has become increasingly concerned with the tax risks associated with international transactions. Although the AG found that the CRA is better able to identify potential non-compliance with the tax rules on international transactions, the CRA still needs to improve in several areas.

Given the CRA’s increased focus on international tax issues, including transfer pricing, Canadian corporations that undertake transactions with related parties in foreign jurisdictions face an ever-increasing probability of a transfer pricing audit by the CRA.

Consequently, corporations should be diligent in developing and implementing transfer pricing policies, as well as preparing appropriate transfer pricing documentation in an effort to reduce the likelihood of a transfer pricing adjustment in the event of a CRA audit.

CRA’s focus on international taxation issues

Aggressive tax planning, which includes international tax compliance, has been one of the CRA’s top four compliance priorities since 2004. As noted in the 2007 AG report, the CRA estimates that over 16,000 Canadian corporate taxpayers report some type of foreign transaction with related parties. These related-party transactions are estimated to involve more than $1.5 trillion in 2005.

The 2005 federal budget allocated $30 million annually to the CRA to address aggressive international tax planning. The CRA is using these funds to research tax avoidance and to increase the number of international auditors and tax avoidance auditors. As of March 31, 2006, the CRA had 320 international auditors and researchers and 210 non-resident auditors and program officers.

Auditors now use checklists and other planning tools to help them determine whether a corporation may be non-compliant and to begin transfer pricing and foreign affiliate audits. In addition, the time budgeted for an international audit of a large corporation has increased significantly. In 2006, the CRA’s total international audit reassessments had increased to $941 million from $778 million in 2001. The additional tax assessed on international transactions by large corporations was $729 million, compared to $300 million in 2001.

International auditor expertise and support

In its 2002 report, the AG expressed concern about the lack of adequately trained and experienced international auditors who were available to undertake transfer pricing and foreign affiliate audits.

A lack of adequate international audit experience was still observed by the AG in 2006. For example, in two Greater Toronto Area (GTA) tax services offices (TSOs), more than 40 percent of auditors had less than two years of international audit experience, while four of the ten international audit team leaders had less than one year of international team leader experience.

In an attempt to combat the lack of international audit experience, the CRA added 140 international and avoidance auditors and 39 experienced auditors to perform research studies. In addition, since 2002, the agency increased the total number of economists it employs to 16. However, the 2007 AG report notes that some TSOs continue to lack adequate training and experience in international audits, especially in the GTA.

The 2007 AG report noted that only 25% of audit recoveries came from the GTA, where more than 40% of large corporations report non-arm’s length transactions. It is suspected that tax recoveries in the GTA have been lost due to inconsistencies in the approach and coverage of international audits. The 2007 AG report also noted that, even though economists have been involved from the onset of the audit, they have limited experience in transfer pricing audits and lack industry-specific expertise.

Foreign documentation requests

The 2007 AG report revealed that the CRA has increased the use of information requests from foreign jurisdictions. However, the report concluded that auditors are still not making sufficient use of these provisions where taxpayers failed to provide the information voluntarily.

Osler, Hoskin & Harcourt LLP

Chris Murray, Ward Sellers and Noralee Bradley

Canada
August 11 2008

At their peak, income trusts in Canada were valued at over $200 billion. Yet with the future loss of its special tax status, the already diminished trust sector will shrink to a bare shadow of that. Over the next few years, the sector will present a number of interesting investment and acquisition opportunities for buyers on both sides of the border. In considering these opportunities, trustees and potential buyers will need to be aware of the legal and tax issues facing trusts.

A Sector with Diminishing Prospects

The announcement by Canada’s Finance Minister in October 2006 that income trusts would be placed on the same tax footing as corporations in 2011 came as a severe blow and caused an immediate reaction in financial markets. Trust valuations plunged, attracting the attention of buyers. In the subsequent months, acquirors with ready access to debt seized on opportunities to employ private debt in income trust acquisitions.

The initial burst of M&A activity has since subsided, and a major contributing factor has been the disruption of credit markets in North America. With tighter credit and growing economic uncertainty, fewer buyers are willing to undertake new acquisitions, and the remaining trusts are now looking more closely than ever at converting to corporate status.

A significant bellwether was the decision by TransForce Income Fund to become a corporation in May 2008. One of the largest trusts in the country, TransForce pursues growth aggressively by acquiring smaller companies, and its status as a trust hampered its ability to use securities as a financing method. It reverted to corporate status to enlarge its financial flexibility at a time when it saw considerable opportunity for acquisitions.

Another large conversion was that of Aeroplan Income Fund. Its motivation was quite different: there are limits on the proportion of foreign ownership of trusts, and Aeroplan had recently come close to reaching them. The tax consequences for a public income trust losing its mutual trust fund status is dire.

If and When to Convert

Conversion to corporate status is not without strategic issues for trusts. Their investor base largely comprises security holders who are looking for steady income. If they convert, many could be challenged to maintain dividends at the same level of distributions they delivered as trusts. If they fail to do so, they may see a significant exodus of investors, necessitating recruitment of fresh capital from other sources. Early converters have suffered market price drops (at least temporarily) and a significant degree of churn that may provide potential acquirers with an opportunity to obtain initial positions. For small business trusts with little market capitalization, a sale may be the more feasible outcome.

Whatever decision they ultimately make, many trusts will likely maintain their current structure until 2011. Absent other factors, there may not be compelling enough reasons to give up a significant tax advantage any earlier than necessary and current market conditions do not favor M&A activity. However, in early July 2008, the federal government released draft tax legislation that facilitates a tax deferred reconversion of income trusts to corporate form until the end of December 2012. This will certainly cause many trusts to reconsider corporate conversion and the timing thereof.

Legal Counsel and the Conversion Process

The vast majority of business income trusts that are not sold prior to 2011 will likely revert to corporate status. With the new trust tax commencing at the end of 2010, there is only slightly over two years to complete such a conversion.

One important strategic question is the impact on valuation that a conversion entails. Once a conversion announcement has been made, the unit price may drop over the short term. It is counsel’s responsibility to ensure that the trustees have fortified their decision with sound financial, market and legal advice, and have adequately considered such questions as the dividend that will be declared upon conversion to a corporate structure. This in turn may impact the investor base, and the trustees need to consider a plan for shoring up investor interest in the newly-converted company.

Trusts must also consider a number of related issues: the use of the tax attributes of the entities in the trust structure, the effect of conversion on external indebtedness and the cost implications of conversion itself.

In some cases, a trust may decide to convert before 2011. This would necessitate an even more rigorous decision-making process by the trustees, since the trust would be foregoing a significant tax advantage that would be subject to careful scrutiny and examination. The trustees would need to undertake careful due diligence to consider all the options open to the trust to justify the decision to unit holders.

In light of the new conversion rules and in anticipation of improving credit markets and a concomitant increase in M&A activity, trusts would be well advised to consider their strategic alternatives – to start considering conversion plans or plans for selling. Whichever route the trustees of an income trust take, they must do so based on careful deliberation and with the assistance of experienced counsel.

Frank Lloyd Wright said, “Take time to prepare.” Ten years preparation for preliminaries to architectural practice is little enough for an architect who would rise above the norm in true architectural appreciation or practice. If we look at how this applies to taxes, we will discover just how important it is to be the architect of our own finances. We need to take control of our own destinies. We have to make our own tax savings plans. We must decide what we want to do, then hire the appropriate experts to help implement our plans. When this happens, then and only then, will we rise above the countless masses that continue to pay more than their fair share of taxes.

There are two things in life that are sure, one is Death and the other is Taxes. It’s not a question of whether you should pay taxes or not, rather it’s a question of how much tax you pay. Every time you avoid paying a tax, that money stays in your pocket as a “0″ tax. We are going to explore ways in which you can reduce the tax you pay.

There are opportunities for not paying any income tax in a specific year and for not paying G.S.T. or P.S.T. on your purchases.

My objective is to stimulate your thoughts so that you will develop a new approach to putting more dollars in your pocket and less in the tax man’s. Shrewd financial management will enable you to eventually make so much money that it does not bother you (too much) that you have to pay taxes.

This is a broad subject. There are no experts in all areas of taxes. This also applies to me. I am not an expert, I am just a creative business person who has a practical approach to the subject of taxes, and has collected a wealth of tax saving information. This is one of the reasons my Tax Seminars have been so successful. Often the best ideas come from people outside of an industry or profession, someone with a different outlook and fresh ideas unencumbered by conventional training and not influenced by colleagues or peers who are in the business of doing people’s taxes or books.

When dealing with taxes, you have to be in control of your own affairs, you need to know what it is you want to accomplish and how to get what you want. Consult the experts and deal with them in a creative fashion. This allows you to take advantage of the better opportunities and options. You are the one with the greatest personal stake in your affairs.
My Tax Book is designed to get you thinking and acting in a manner that will facilitate your achieving financial success to the degree that you can no longer legally avoid paying taxes. I am not, in any way, suggesting that you do anything illegal. There are a lot of ways to legally avoid paying taxes. There is a big difference between “tax evasion” and “tax avoidance.” The trick is to know what’s legal and what’s not. My book is designed to help you in knowing what you can legally do, and what will get you in trouble with the tax department.

My book is also intended to demystify the tax department, so that you can deal rationally with your affairs, and to remove the fear of what they can do to you if you make mistakes. No one should have to live with an irrational fear for their entire life, because of misinformation given to them.

Income tax provides CRA with their single largest source of income, over 100 billion dollars per year. If you earn over $50,000.00 in taxable income then you are going to pay about 53% in income tax on earnings over that amount. Only 11% of Canadians earn over $50,000.00. This means that 89% of Canadians pay the bulk of all income tax paid.
Primarily this overtaxed population segment is composed of struggling individuals who are paying more than their fair share, trying to make ends meet and never having enough money to get ahead. They are often unable to plan for the future, or to have enough money to get out of the tax trap.

It starts to make an awful lot of sense for everyone to become a business, so that our income is reduced through legitimate business expenses. Thus, begins the process of taking more effective control of our financial futures.
As we live in somewhat of a democracy, we have to look at what tools we have at our disposal to help us take control of our financial well being. Business offers us the most opportunities to do this.

I strongly recommend that you review your tax plans with an expert such as a tax lawyer or accountant. Explore whether a management accountant or a chartered accountant is better suited for your needs. It will depend on the type of business you are in. Never put your financial future in the hands of the first ‘expert’ you meet. Remember you are the expert in your business. An accountant or lawyer will advise you whether or not what you are doing is legally correct. Because of the broad knowledge required to be an all encompassing tax expert, it is impossible to know everything about everyone’s business. So, do not take anyone’s word as the final authority on the topic.

Hi E

Nice to hear from you on this fine last day of spring day.
Your medical expenses are deductible. HOWEVER!
The interesting thing is that we all have standard medical expenses we can write off, however our ever money hungry government has set it up that you can take all your medical expenses minus 3% of your net income. So if you spend $2,000 in medical and earn $64,000 or more in net income, you have to subtract $1,926 (the maximum deduction in this formula.)

The government now only allows a maximum amount of medical expenses of $10,000 which is outrageous.

So in your case your deduction would be around $74. Which is a joke and an insult to what Canada stands for!

You would be better off paying your dentist for other business services than dental work. Of course it has to be real.
It is a sick government that would effectively remove the average person’s medical expenses. Their threshold where you don’t benefit is below the country’s average income.

Oh Canada, I stand medical expense barred for thee. It is time for a tax revolt about revolting government tax greed.
Dan

Retirement Income Splitting

Income splitting is important for everyone especially so for senior citizens. If you receive Old Age Security (OAS) benefits, your entitlement is clawed back at the rate of 15% of your taxable income in excess of $53,215. Splitting income between seniors reduces the total amount clawed back as well as saves on their income taxes.
Consider that when you contribute to a spousal RRSP, withdrawals from the RRSP by your spouse will be taxed in your spouse’s hands, if you have not made a contribution to the RRSP within the previous two years, or if the RRSP has been converted to an annuity.
If you contribute to a spousal RRSP and your spouse also has earned income, they should also contribute to their own RRSP. Spouses should consider electing to split CPP benefits 50/50. This is beneficial in situations where only one spouse has worked and is receiving a pension. Diverting half of your benefits to your spouse will not result in income attribution as this is specifically excluded from the rules.
Remember to invest the CPP benefits received in your spouse’s name since income earned on the accumulated CPP benefits will not be subject income attribution.
Advantages of a Small Business Company

A Company qualifies as an SBC, Small Business Company, if at least 90% of its assets are used for active business purposes carried on primarily in Canada.
A CCPC, Canadian Controlled Private Company, holding only shares or debts of other companies may qualify, subject to those other companies are also being SBCs. If corporations reinvest all their profits back into the business, meeting the “Asset use test” does not pose a problem.
If the corporations invest surplus funds in investments not required for their business purposes. And if the fair market value of these investments exceeds 10% of the fair market value of all assets, the corporation will not qualify as an SBC.
To ensure your corporation continues to qualify as a SBC you should consider reinvesting any excess funds in business assets, or remove them from your corporation, through payment of dividends, salary or repayment of shareholder loans. The word “small” in the definition of a “small business company” is interesting, as there are no size restrictions for qualifying as a SBC.