One of my posts last year focused on the tax changes the federal government introduced for 2016. The changes impact almost everyone especially high earners with children.
But what do all these changes mean for your bottom line?
You can find out in a matter of minutes. The Office of Parliamentary Budget Officer has introduced a tool that lets taxpayers know not just their net tax difference compared to 2015 but also the exact measures that affect your overall taxes.
Take a minute to answers a few questions and find out whether you are better or worse off with 2016 tax changes:
Budget 2016: Tax Tool Calculator
Generally any expenses incurred in order to generate business income can be deducted for tax purposes unless it is specifically prohibited in the income tax act. However there are some exceptions. For example major expenditures on and repair of property for the purpose of prolonging its useful life or increasing its value above its initial state are not deductible and should be added to the cost of the property in which case they will be deductible as CCA. In general, purchases whose useful life is over a year and cost more than $ 500 are considered assets and should be amortized according to their CCA class and rate.
So what happens if a business’ expenses exceed its revenues?
Business losses can be deducted against any other type of income and may be carried back 3 years or forward 10 years (if the loss was incurred after Dec 31, 2005). It is recommended that you use all of your non-refundable credits first before claiming your business losses in any given tax year. Also you can carry back only a portion of your current losses. By doing so you can carry back a business loss against multiple years of income that was taxed at a higher marginal rate since higher rates apply to higher incomes.