Personal tax accountant in St. Catharines

Dividends and salary from the family company

Many Niagara households are paid by a corporation they own: a winery, a contracting company, a restaurant or a shop. Salary arrives on a T4 and dividends on a T5, both issued by the last day of February, and the personal return depends on the choices made in the corporation months earlier. That is why we prefer to prepare the T1 and the corporate return together. The mix of salary and dividends changes RRSP room, CPP contributions, childcare deductions and the tax on each dollar, and it can only be changed before the corporate year closes.

Where adult family members receive dividends, the rules on tax on split income decide whether those dividends are taxed at their rates or at the top rate. Tax on split income explains the exclusions that matter for a family business.

Self-employed in the Niagara Region

A sole proprietor reports the business on form T2125 inside the personal return. In Niagara that covers a wide range: a tradesperson working for local builders, a tour guide paid by the booking, a musician playing the summer patios, a consultant working from home in Lincoln. The return has to separate business from personal use of the vehicle, the home and the phone, and it has to support each claim with records kept for six years.

Once taxable sales pass $30,000 in four consecutive calendar quarters, HST registration becomes mandatory, and many sole proprietors cross it without noticing. We check that as part of the return. The self-employed return sets out what we need from you.

Rental units and tourist rentals

A basement suite, a duplex or a cottage rented to visitors is reported on the personal return, with income and expenses on its own schedule. The line between repairs, which are deducted, and improvements, which are added to the cost and depreciated, is where most rental returns go wrong. Current versus capital expenses walks through it.

Short-stay rentals to tourists are treated differently from a long-term tenancy. A residential lease is exempt from HST, but short-term accommodation can be a taxable supply, and once those sales pass $30,000 over four consecutive calendar quarters registration becomes mandatory. In a region that draws visitors to the Falls and the wine route every summer, that question is worth asking before the second season rather than after it. See rental income returns.

Retirement income and splitting it

Pension income, RRIF withdrawals, CPP and OAS all arrive on slips, and the planning sits in how they are shared between spouses. Eligible pension income can be split on the return, which can lower the combined tax and keep one spouse below the level where OAS begins to be clawed back. The split is elected each year, so it can be adjusted as incomes change. Pension income splitting and OAS clawback planning cover both.

Owners selling a business or farm to retire have larger questions again: the lifetime capital gains exemption on qualifying shares or farm property, and how the proceeds are received. Those decisions belong well before the sale closes.

Instalments and the reminder that arrives in February

If your net tax owing is more than $3,000 in the current year and in either of the two previous years, the CRA expects quarterly instalments on March 15, June 15, September 15 and December 15. Retirees with pension income that has no tax withheld, landlords and self-employed people meet this most often. The CRA’s reminder offers a suggested amount, which is safe but not always the lowest. We compare it with a projection of this year and tell you which to follow. The instalment calculator shows the options.

Farm families and the land they hold

Around St. Catharines, Lincoln and Niagara-on-the-Lake, a good number of households own orchard land, a vineyard or a greenhouse operation directly rather than through a company. Farming income reported on a personal return can use the cash method, which gives real control over which year income and expenses land in. Farm losses follow their own rules where farming is not the main source of income, so a hobby vineyard beside a full-time job is treated differently from a working farm.

The land itself is often the largest asset the family has. Qualified farm property can be eligible for the lifetime capital gains exemption, and it can pass to a child under the intergenerational rollover rules. Both depend on how the land was used and owned over years, so the planning starts on the personal return long before any transfer. Farm accounting in St. Catharines covers the operating side.

When the CRA asks a question

A review letter asking for receipts, a notice of reassessment or a request for information is ordinary, and most are settled by sending the right documents with a short explanation. We handle the correspondence through our CRA authorisation, so you are not the one on hold. If you disagree with an assessment, a notice of objection has to be filed within 90 days of the notice of assessment, and the window does not stretch. See what a T1 review letter means and filing a notice of objection.

Remote personal tax from Abbotsford

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford, serving St. Catharines clients entirely online. There is no St. Catharines office and no local staff. Meetings are held by video or phone, documents are exchanged by secure upload link and e-signature, and no visit is required at any point. Slips and receipts come in by secure upload link, and the return is signed electronically.