Bill C-31: Royal Asset and New CRA Powers Could Come Soon

Changes are coming to the Income Tax Act and both you and your clients will all be affected with new tax risks including longer tax audits. Bill C-31, which passed second reading in the House of Commons on June 3 and is now at committee stage, contains elements of previous Federal Budgets that will expand the CRA’s compliance and enforcement powers. Here’s what you need to know and pass along to your clients:

Things have also gotten a lot more complex since taxes were first introduced in 1917.  Back then the tax return was six pages long and contained 23 lines. By contrast, the 2019 federal T1 featured an expanded 8-page return, 11 schedules and hundreds of lines. This complexity and digitization been a boon for tax accounting and bookkeeping services, which have grown exponentially, too.  Entry into these high demand and highly rewarding professions makes good sense, an dnew statistics about the size of the market confirm this good news.

Professionals in the tax, bookkeeping and accounting industries can add big value to stimulate healthy new births in a new economy. Based on newly released statistics on November 10, professionals could be more proactive in improving survival rates…but how? One way is to formalize business planning, budgeting and forecasting service offerings.

There are big penalties for businesses who don’t remain above board with the taxman. Fees paid to professional bookkeepers and tax accountants can be well worth it, as a self-employed taxpayer in the construction industry recently found out.

Should you buy or lease a new vehicle or computer before year end?  It’s a great question for financial advisors and their clients to discuss before year end. Canada’s tax system has some excellent incentives for people in the market for buying business assets before year end.  Here’s an overview of the provisions that were first introduced with the November 21, 2018 Fall Economic Statement:

Abe Toews, CFP, CLU, CH.F.C, CHS, Chair of the Board of Directors, Advocis will make a special guest appearance to discuss year end donations strategies as he shares the virtual stage with expert headliners at the November 18 Virtual CE Summit.  The theme is focused planning for investors and self-employed taxpayers.  Advisors who need to brush up on advanced planning, especially for corporate owner-managers, should mark their calendars and register no later than Monday, November 16.   

The deadline for filing Registered Charity Information returns was extended to December 31, 2020 for returns due between March 18, 2020 and December 31, 2020. However, the CRA’s Charities Directorate is also encouraging charities to file as soon as possible to avoid expected processing delays as a result of the high volume of returns that will be submitted around the deadline.