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If an employee is paid a flat rate vehicle allowance, which is not based on kilometres travelled, the allowance will be a taxable benefit to the employee. If it is taxable, the employer will also have to deduct CPP, EI and income tax from the payment. The employee may be able to claim employment expenses on their personal tax return as a deduction to offset this taxable benefit.

EI PREMIUMS DECREASED FOR SMALL BUSINESSES

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The Small Business Job Credit was introduced this fall, and will be available for businesses in 2015 and 2016.

This credit is for small businesses in Canada which have annual EI employer premiums that are less than $15,000. If a business’ premiums are below this threshold, its EI rate will drop to 1.60% from a standard rate of 1.88%.

Similar to the current EI hiring credit, the CRA will determine whether a business qualifies for the credit when business files their annual T4 summary.

This credit will replace the EI hiring credit which expired in 2013. Many small businesses will find this credit more beneficial. The maximum credit available through the previous program was $1,000, whereas the new program offers a maximum credit of $2,234. It is anticipated that after 2016, the EI rate for all businesses will be reduced through other measures that will come into effect at that time.

INCOME SPLITTING FOR FAMILIES

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In October, the federal government introduced income splitting for parents with the “Family Tax Cut”. This tax cut will allow one spouse to transfer up to $50,000 of taxable income to the other spouse.

All types of taxable income are eligible for income splitting. The maximum allowable family tax reduction will be $2,000. The credits will be available for 2014 and subsequent taxation years.

Families with children may save $2,000 from new credit

Families with children may save $2,000 from new credit

There are several requirements that must be met in order to receive the credit. The family must be a two parent household with a child who is under the age of 18 at the end of the year. As well, both spouses must file tax returns for the year and must not have declared bankruptcy in the year.

The credit will be non-refundable, meaning that the taxpayer can only use the tax credit to reduce their federal income taxes to zero.

Like some other credits, it can only be applied against federal taxes, and therefore it cannot be used to decrease a provincial tax liability. As a result, the credit could reduce a taxpayers federal income taxes to zero, while still leaving the taxpayer with a provincial income tax obligation. In certain circumstances, a person could have no federal tax payable, while still owing almost $700 of provincial tax.

This credit is very different from income splitting for seniors. Although seniors income splitting only applies to eligible pension income, it can result in savings of almost $15,000 on a couple’s total tax liability, as there is no maximum allowable transfer with seniors’ pension splitting.

A couple cannot claim both pension splitting and the family tax cut on the same tax return.

Kelowna Office at New Location

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We are open for business at our new location – Unit 203, 1740 Gordon Drive. We are on the corner of Gordon Drive and Highway 97 in the same building as Dairy Queen with ample parking located behind the office.

T: 250.763.8029
TF: 888.763.8029
F: 250.763.5155
E: kelowna@khgcga.com
W: www.khgcga.com

We’d love to have you stop by and see our new office!

moving

Burnaby Customer Appreciation Annual W&C

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Yes, we are at it again.  We want you to wine, but we want to whine.  So please join us on Thursday, December 11, 2014 from 2pm to 5pm at the Burnaby office and we will, once again, regale you with tales of accounting suspense and intrigue and tails of cat accountant pictures from our FaceBook page (our most popular section!).

If you are able to let us know you are coming by we would appreciate it but it isn’t expected – we’d love to see you.

This year, we are collecting donations for the Pacific Assistance Dogs Society (PADS).  Please come by and learn more about these fine people.

Thanks to all our fabulous clients and we look forward to seeing you.

Our 2014 Customer Whine & Cheeze

Our 2014 Customer Whine & Cheeze