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2019 Year-End Tax Tips and TrapsJanuary 6th 2020
A new decade is fast approaching. While many may be eagerly awaiting New Year’s festivities, others may be sweating the new decade’s season of tax and trepidation. No need to fret, your partners at SKK Chartered Professional Accountants in Dawson Creek, British Columbia have shared some business tax planning, preparation and remuneration tips and traps to help you conquer your 2019 taxes. Consider this your early Christmas present from Dawson Creek accountants at SKK!
Read the complete 2019 Year-End Tax Planning and Remuneration edition of Tax Tips and Traps to get a better idea of the deductions, credits and actions that may help minimize taxes owed and maximize your refund. Here is a summary of this year-end edition!
Tax Preparation and Planning to Optimize Deductions and Credits
Some of your 2019 expenses may be eligible for tax deductions or credits. Don’t miss out, be sure to keep receipts for business or personal expenses including:
• Carry charges and interest
• Charitable donations
• Child care
• Medical expenses
• Political contributions
• And certain employee, union and professional expenses
If you have your own company or own a rental property, you may want to plan well ahead and consider business tax preparations such as paying a reasonable salary to family members for services rendered such as administrative support or website maintenance. It may also be wise to make a capital asset purchase before the end of 2019 as the purchase may be eligible for accelerated depreciation, which means more bang for your buck! You may even be eligible for a 100% write-off of machinery and equipment purchases used for the manufacturing and processing of goods for sale or lease. Other potential money-back opportunities include the federal incentive rebate of up to $5,000 for zero-emission vehicles bought on or after May 1, 2019.
Read on to discover more options for tax credits including:
Teacher and early childhood educator expenses of up $1,000 for eligible school supplies.
Home renovation federal tax credit for eligible expenses up to $10,000 to renovate a dwelling to enhance mobility or reduce risk of harm if residents of the home include individuals 65 or older or those eligible for the disability tax credit.
An exciting option for individuals who invested in medical intervention towards the conception of a child includes the potential to receive credit for certain expenses made over the previous 10 years.
Other credits include employers who have taken on apprentices. In this scenario, the employer can apply for an Incentive Grant and an Apprenticeship Completion Grant.
Tips to Reduce Taxable Income
Reduce your taxable annual income by bulking up your 2019 contributions to your Registered Retirement Savings Plan by March 2, 2020. Another option is to deposit up to $6,000 into a Tax-Free Savings Account and talk to your partner at SKK Chartered Professional Accountants located in Dawson Creek to discuss options about catching-up by contributing more to reach maximum deposits for past years. Other strategies to optimize your taxable income you can discuss with your accountant include Canada Education Savings Grant for Registered Education Savings Plan contributions and the Registered Disability Savings Plan, which permit non-deductible contributions to a lifetime maximum of $200,000.
Working with a chartered professional accountant like those at SKK, is essential to ensure you smooth any fluctuations in your income over a number of years and maximize your access to the lowest marginal tax rates. They will also identify any other tax planning tactics you must consider including:
• Leaving excess corporate earnings in the company to get a tax deferral
• Paying taxable dividends to get a refund
• Paying a bonus to the shareholder to reduce total income taxed at higher rates
• Carefully track your labour and capital contributions to your business
• Discuss risk and exposure minimization strategies with your professional advisor
• And more!
If you have any questions related to your individual or business year-end taxes, we are more than happy to help and provide the personalized assistance you need.
Read 2019 Year-End Tax Planning and Remuneration edition of Tax Tips and Traps to learn more about year-end planning tips and traps!