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(Disclaimer: Information provided on this page may or may not apply to your business. Always consult with your Chartered Professional Accountant, Financial Advisor, or Legal Representative for guidance.)
New tax-filing obligations await many unsuspecting Canadians in 2024
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CANADA REVENUE AGENCY TAX INTEREST AND PENALTIES FOR INDIVIDUALS
Keep your remittances up to date to avoid extra costs for your business or personal tax.
HOME OWNERS TAX INCENTIVES
Multigenerational Home Renovation Tax Credit
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MANAGING PETTY CASH
Managing cash effectively is important to ensure proper control and accountability. Here are three rules to help you manage cash efficiently:
ESTABLISH A PETTY CASH POLICY:
Clearly define the purpose of the petty cash fund and the types of expenses it can be used for. This could include small, day-to-day expenses like office supplies, minor repairs, or miscellaneous purchases.
IMPLEMENT A SYSTEM OF DOCUMENTATION AND RECEIPTS:
Require anyone withdrawing funds from petty cash to provide detailed receipts for every expenditure. Receipts should include information such as the date, vendor name, items purchased, and the amount spent.
REGULAR RECONCILIATION AND AUDITING:
Conduct regular reconciliations of the petty cash fund to ensure that the balance matches the sum of the remaining cash and the value of receipts.
Three Benefits of daily income tracking
Tracking your daily income can offer several benefits, both in terms of personal finance management and overall well-being. Here are three key advantages:
FINANCIAL AWARENESS AND CONTROL:
Daily income tracking enhances your awareness of your financial situation. By recording your daily income, you gain a clearer understanding of your cash flow and how much money you are earning regularly.
BUDGETING PRECISION
Daily income tracking is an integral part of effective budgeting. When you know exactly how much money is coming in on a daily basis, you can create more accurate and realistic budgets.
MOTIVATION AND GOAL SETTING:
Tracking your daily income provides a tangible record of your financial progress. As you see your income grow over time, it can serve as a source of motivation.
Building profit in a business
UNDERSTAND YOUR MARKET AND CUSTOMERS:
Conduct thorough market research to understand your target audience, their needs, and preferences.
OPERATIONAL EFFICIENCY AND COST MANAGEMENT:
Streamline your business processes to improve efficiency and reduce operational costs. This might involve automating repetitive tasks, optimizing supply chain management, or improving internal communication.
DIVERSIFICATION AND INNOVATION:
Explore new revenue streams and markets to reduce dependency on a single product or customer segment. Encourage employees to contribute ideas and stay updated on industry trends.
Here are five tips on the advantages of establishing a robust business network
ENHANCED COMMUNICATION AND COLLABORATION:
A business network facilitates seamless communication among employees, departments, and even external stakeholders. It enables real-time sharing of information, ideas, and updates, fostering collaboration.
IMPROVED ACCESS TO RESOURCES:
A well-designed business network allows for centralized storage and access to data and resources. This ensures that employees can easily retrieve the information they need, promoting efficiency and reducing the time spent searching for documents or files.
INCREASED SECURITY AND DATA PROTECTION:
Implementing a secure business network helps protect sensitive data from unauthorized access. Features like firewalls, encryption, and secure authentication protocols can be employed to safeguard the network from cyber threats. Regular updates and monitoring contribute to a more resilient network infrastructure, reducing the risk of data breaches and ensuring business continuity.
SCALABILITY AND FLEXIBILITY:
A well-planned business network is scalable, allowing for easy expansion as the organization grows. Scalability ensures that the network can accommodate additional users, devices, and applications without a significant loss in performance. Moreover, a flexible network infrastructure supports remote work, enabling employees to connect securely from various locations, promoting work-life balance and attracting talent from diverse geographic areas.
STREAMLINED IT MANAGEMENT:
Centralized network management simplifies IT administration tasks. This includes software updates, security patches, and system monitoring. Automation tools can be employed to streamline routine tasks, freeing up IT personnel to focus on more strategic initiatives. Additionally, a well-organized network reduces downtime, ensuring that employees can work efficiently without disruptions.
In summary, establishing a business network environment contributes to improved communication, resource access, security, scalability, and streamlined IT management, ultimately enhancing overall organizational productivity and efficiency.
November 09 2023 Business TIP
KEEP DETAILED MOTOR VEHICLE RECORDS FOR CRA
The best evidence to support the use of a vehicle is an accurate logbook of business travel maintained for the entire year, showing for each business trip, the destination, the reason for the trip and the distance covered.
You can deduct motor vehicle expenses only when they are reasonable and you have receipts to support them. To get the full benefit of your claim for each vehicle, keep a record of the total kilometers you drive and the kilometers you drive to earn business income.
KEEP DETAILED RECORDS FOR BUSINESS SUCCESS
As a business owner it is important to understand where your business is financially on a daily basis. Successful businesses will review their profit/loss statement on a daily basis to see if they are on track with the monthly target they have set for the month. If you can make this a priority at the start of every day it will keep your accounting records up to date and make your month end more efficient.
Avoid Mixing Business and Personal Credit Expenses
Sometimes using a personal credit card seems like an easy way to finance your business and it can become a common practice. However, whenever possible it is important to keep your personal and business expenses separate. Consider a business credit card to keep your business expenses separate, doing this will make it easier when filing your business and personal taxes. Proper record keeping makes your tax filing more efficient saving you money. The bonus is that it can help build up your business’s credit and possibly make it easier to obtain other lending in the future.
AVOID DELAYS AT TAX TIME BY USING CANADA REVENUE AGENCY'S DIGITAL SERVICES
No one likes last-minute delays or waiting on the phone at tax time. You can avoid this by preparing early and using CRA's digital services. You will be able to update your personal information and view your tax and benefit information ahead of time.
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Canada Revenue Agency announces maximum pensionable earnings and contributions for 2024
What’s new for January 1, 2024?
The maximum pensionable earnings under the Canada Pension Plan (CPP) will be $68,500—up from $66,600 in 2023. The basic exemption amount for 2024 remains at $3,500.
Starting in 2024, a higher, second earnings ceiling of $73,200 will be implemented and used to determine second additional CPP contributions (CPP2). As a result, pensionable earnings between $68,500 and $73,200 are subject to CPP2 contributions.
These new ceilings were calculated in accordance with the CPP legislation and take into account the growth in average weekly wages and salaries in Canada.
CPP contribution rates and amounts
Employee and employer CPP contribution rates for 2024 remain at 5.95%, and the maximum contribution will be $3,867.50 each—up from $3,754.45 in 2023. The self-employed CPP contribution rate remains at 11.90%, and the maximum contribution will be $7,735.00—up from $7,508.90 in 2023.
Employee and employer CPP2 contribution rates for 2024 will be 4.00%, and the maximum contribution will be $188.00 each. The self-employed CPP2 contribution rate will be 8.00%, and the maximum self-employed contribution will be $376.00.
Contributors are not required or permitted to make contributions on pensionable earnings above $73,200.
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NEW REPORTING REQUIREMENTS FOR TRUSTS AS OF DECEMBER 31, 2023
The Government of Canada has introduced new reporting requirements for trusts. These changes were made as part of Canada’s international commitment to the transparency of beneficial ownership information as well as its continuous efforts to ensure the effectiveness and integrity of the Canadian tax system.
Canada Revenue Agency Update On Businesses Filing Six Or More Information Returns
Recent legislation has amended mandatory electronic filing thresholds. Beginning January 1, 2024, businesses filing six or more information returns (slips and summaries) must file electronically. This removes the clause that allowed a filer with 50 or fewer information returns to file by paper. Businesses filing five or fewer information returns can still choose to file by paper.
Examples of information returns include the T4 payroll return (remuneration paid), T5 (investment income), T3 (trust income) and T4A (pension and other income return).
Canada Revenue Agency HST Due This Month For Businesses That Submit Quarterly
HST installment payment for each quarter is due within one month after the end of each fiscal quarter.
Period From July 1st to September 30 is Due by October 31.
Canada Revenue Agency Payment Information for Corporations
Starting in 2024, any payment to the Receiver General over $10,000 must be made as an electronic payment, unless you cannot reasonably remit or pay the amount in that manner. Failure to make an electronic payment when required may be subject to penalties.