Cross Border Tax Consultants

Want to come clean about your missed income or hidden assets in Canada? Is it possible? How exactly can you do it? In this article, we will be discussing the method to report your missed assets to the CRA. Read on to learn more about the process.     What is CRA's Voluntary Disclosure Program (VDP)? When it comes to taxes, many people make mistakes or intentionally omit or misreport information. If you are one of these people, you may be able to get on the right side of the Canadian tax system. A Canadian taxpayer can apply to the Voluntary Disclosure Program to reduce late filing penalties (VDP). This program allows taxpayers to correct unintentional errors or omissions on their income tax returns a second time. What are the conditions to apply for VDP? You can submit a Voluntary Disclosure Program to: • Correct any missing or incorrect information in your tax returns. • Include information or income that you did not disclose in previous tax returns. • Rectify previousl...

Are you confused about Canadian Income Tax Rules? Should you be reporting your foreign rental income in Canada? Well, let us find out. Regarding reporting rental income for Canadian income tax purposes, foreign and domestic rental income are regarded equally. A Canadian taxpayer must therefore reveal all of their worldwide income. What if the cost of foreign properties is more than $100,000 CAD? Then you must fill out the T1135 form, which is also known as the foreign income verification statement. Continue reading to learn more.     How to Report Foreign Rental Income? • To report your foreign rental income while filing income tax returns in Canada, fill out the T776 Form, also known as the Statement of Real Estate Rentals. • Keep in mind that your international rental income must be reported in Canadian dollars • To avoid double taxation, income taxes paid to the foreign jurisdiction on rental income can be claimed as a foreign tax credit on the taxpayer's Canadian incom...

When paying your taxes annually, you need to include all of your foreign income on your return – including details of your foreign properties. And this goes to any taxpayer who is required to pay taxes in Canada - whether you reside in the country or are a Canadian resident who lives abroad. But how exactly does the Canada Revenue Agency (CRA) know about your foreign properties? Let us find out. T1135 Form and its Significance If you live in Canada, your income from all sources is subject to tax. There are severe penalties for failing to disclose your worldwide income in Canada accurately. The country's voluntary tax system depends on individuals accurately and honestly declaring their income and paying their income taxes. It's why criminal sanctions may occasionally be part of the penalties. If you own foreign property with a value of more than $100,000, you are required to submit a Form T1135 Form once a year. This is done to ensure that all Canadian residents accurately ...

  Are you confused about whether to hire a lawyer or accountant to complete your Voluntary Disclosure Program? What if we tell you that you don't need them? But before getting into that, we need to learn more about the CRA's Voluntary Disclosure Program. Read on to know more. What is the Voluntary Disclosure Program? Many people make errors, intentional omissions, or misreporting regarding taxes. If you happen to be one of those people, there's a way around it. There is a chance that you will be treated fairly by the Canadian tax system. Through the Voluntary Disclosure Program (VDP), run by the CRA, you get a second chance to fix any inaccurate or late tax files. The voluntary disclosure program allows taxpayers to make changes to their tax affairs. VDP lets you correct your mistakes of the ten prior taxation years. Additionally, VDP aids in shielding non-compliant taxpayers from legal action. If you need to file pending tax returns with the CRA or correct prior tax file...

If you have intentionally misreported, consider the Voluntary Disclosure Program (VDP). You will still have to pay the taxes owing and the interest generated due to the corrections but if your application is accepted by the CRA you could receive penalty relief or prosecution relief and some of your interest generated could also be waived off.   To apply for VDP, certain criteria need to be met: i) The disclosure must be made before the CRA finds out about it and contacts you. ii) You should provide complete information. iii) The information must be older than a year iv) You must be facing penalties or tax charges. It is always advisable to seek professional advice from a qualified accountant as it is difficult to keep track of all the rules and changes made in tax filing. You are also more prone to making mistakes that could cost you a lot if you do not have the proper knowledge. If you are looking for expert advice and assistance regarding your individual income tax return,...

Filing two sets of taxes as an American living in Canada might be a little daunting & overwhelming. Knowing which tax rules apply to you and tracking your tax filing options can be daunting! Filing taxes as an American residing in Canada attracts its own set of questions and concerns. Is there anything else you need to specify to the Internal Revenue Service (IRS)? How do your financial accounts in Canada influence while filing your tax return? What to do if you are a commuter from Canada to the United States? Thinking about tax procedures & filing in the United States and Canada probably makes your mind spin! Don't worry! Maroof HS CPA is here to help! Cross-border tax returns necessitate a large level of technical and professional knowledge. Over the last few years, the US tax code has undergone considerable revisions. These modifications had a significant influence while filing US tax returns by US ex-pats in Canada. Anyone attempting to file these tax returns without ...

It is always wise to file tax return on time and ensure that the CRA receives accurate and comprehensive information. In fact, it isn't always the case! Many Canadian taxpayers are apprehensive about dealing with the Canada Revenue Agency (CRA). They might have knowingly submitted incorrect information on their tax returns or mistakenly left out income. Because of poor or incomplete record-keeping, they sometimes supply incomplete information on previous returns. The CRA has a voluntary disclosure programme to encourage Canadians who had engaged in such behaviour to come forward and successfully come clean. Voluntary Disclosure Program (VDP) has proven to be incredibly advantageous for taxpayers with undisclosed income or have been late in completing tax returns or information. Taxpayers who participate in the Voluntary Disclosure Program (VDP) can come forward without fear of facing penalties, and/or prosecution. If you have any previous tax-related issues, defaults or delinquen...

Creating a solid business plan takes time, energy, and it is a much brainstorming activity! You may be asking why I need a business plan writer. or Why should I go to the trouble of documenting the business idea that I know will work appropriately? The answer is that you significantly increase your chance of success if you keep your business ideas and concepts with a business plan writing. Are you planning to write your business ideas, concepts, or business plans? If yes, you should never miss out on taking the assistance of a professional business plan writer. They help you script what your business plan is all about and highlight the main aspects of any business. Every business planning is crucial and supposed to be backed by strategic planning. It contains the main stages of business, and it differs from the common academic assignment. The essential principles and stages of your company's development should be included in this type of business plan writing. A well-written busin...

Investors often think twice before funding start-ups, so your business plan has to be exceptional to impress them. But if your pitch deck fails to get the much-needed funding from investors, there must be something wrong with your business plan. Here are the reasons why a business plan might fail to get the investors' attention: Unrealistic Assumptions It's good to be optimistic about your businesses' future and present it to investors. But, you should be realistic as that's what makes investors genuinely see the potential of your business and fund for it. Financial projections and cash flow statements should be presented accurately to get funded. Explaining sales forecasts without complete information can be a red flag for investors. You need to focus more on cash flows and not just profits while presenting your business plan. Using Business Plan Templates If you've used ready-made templates for your business plan, that can be another significant reason for your...

As an entrepreneur, your business plan is what drives your business. Having a well-crafted business plan can help you nail your pitch deck. Writing a business plan is a daunting process, but it doesn't have to be when you do your research well. Your business plan will include your goals, summary, financial projections, and a lot more. So, if you're planning to go the entrepreneurial route, getting your business plan right should be your first step.     Importance of having a business plan You may find it unnecessary to write down a detailed plan when you can get experience and learn from your mistakes. But that's where it can all go wrong. Having an idea is excellent, but you need to strategically write down how to bring it into reality. Spend a little time, and you will not regret writing a plan. In fact, it may even speed up the process of creating a pitch deck when you're ready to get funding from investors. So, never think twice or procrastinate about writing a bu...

Should I incorporate my small business in Canada? When should I incorporate? I was told I could save tax if I incorporate – is this statement holds true? What are the advantages & disadvantages of incorporating your business? Benefits of incorporating your small business: Let’s start with a list of the pros of incorporating your small business in Canada. • Limited liability – Running your business through a corporation gives a safety layer against personal liability. It makes it more challenging for someone to go after your personal assets if the business defaults on its debts. • Tax savings & deferral – In some circumstances, corporations have a lower tax rate in comparison to individuals. Running your business via a corporation in place of a proprietorship can aid to defer and save taxes. • Estate planning – A corporation is a detached entity to you, so it persists to live on irrespective of what happens to you. This can be useful when thinking about transferring your...

When it comes to moving to a foreign country, there’re many tax concerns that has to be reassessed which could significantly impact your cash flow position at the move. Every resident of Canada is subject to Canadian income tax on his or her own worldwide income. That means that a Canadian resident has to report not just their Canadian source income, but also all other sources of income from outside Canada. When emigrating from Canada , you will become a non-resident of Canada by filing a final Canadian income tax return for the year of emigration, also known as emigrant tax return. If this is the scenario, you’d no longer be needed to pay income tax on any income that are foreign sourced O(after emigration). You’ll still be needed to pay Canadian income tax on particular Canadian sourced income, which will be dependent on the country in which you want to dwell and the treaty between that country and Canada.   Filing a departure income tax return for the year of immigration can be...

  An LLC (limited liability company) is created under the state laws in the United States. Limited liability companies (LLC) offer its members liability protection while offering the benefits of being fiscally transparent. Fiscally transparent entity means that income is not taxes at LLC level, but it flows to its members and taxed at the personal level. The LLCs are America’s favorite business structure, so much so that, local accountants in the US tend to recommend to everyone. Sometimes, they recommend it to residents of other countries without knowing the income tax consequences on those taxpayers in their countries. Many Canadian taxpayers often go ahead an set up an LLC in the U.S. without knowing the serious income tax issues. An LLC is treated as a corporation in Canada whereas a flow through entity in the U.S. Since Canada does not see an LLC as a fiscally transparent entity and consider it a corporation, the income of LLC is not included in the personal income of its...

 Not sure where to set up your research centre? Canada might be your go-to. For a while, Silicon Valley in the United States has been a Research and Development hub in the World. But, it may no more be the same. Bloomberg's September 2020 report emphasizes the problems with R&D incentives in the States and why businesses are moving their R&D centres to Canada. But why are foreign businesses setting up their R&D centres in Canada? Canada offers generous R&D Tax Incentives. As a young entrepreneur, setting up a business is no easy feat, but if it's in Canada, you're in for plenty of benefits. By international standards, Canada provides the most attractive R&D treatment. Though the U.S. is one of the top tech hubs since the tax systems are not so generous as that of Canada, there is a drastic shift and a new trend in the way businesses are setting up their R&D centres. Factors such as high business taxes, corporate culture, cost of living, and vari...

 Are you looking to expand your business internationally? Investing in Canada is one of the easiest and the best place. If you're planning to start a business or looking to expand internationally? Here is what you need to know. There is a multitude of opportunities in Canada, right from political stability to urban infrastructure. Fortune 500 companies plan to expand their businesses to Canada, which shows Canada is the best country to invest in. Canada has the soundest banking system among the G7 countries and ranks sixth out of 141 countries. Did you know Canada has the lowest tax rate on new business investments out of the G7 countries? as reported by the Finance Canada Calculations and OECD Tax Database, November 2019. Whether you're an entrepreneur planning to set up your start-up or an existing business trying to expand by setting up an R&D centre, Canada is the right country for you. It offers tons of perks and also provides various opportunities to grow. The G...

What is “notice to reader financial statements”? Financial statements of a business show the financial position and performance of that business over a certain period. Generally, there are three financial statements: 1. Balance sheet: Also knows a statement of financial position 2. Income Statement: Also knows as a statement of financial performance 3. Cash flow statement Notes are often attached with these financial statements, however, if you are a small business the management may decide to not prepare them. In all cases, a balance sheet and an income statement must be attached. Notice-to-reader refers to a notice, signed by a registered CPA firm, cautions the readers of these financial statements about the level of involvement of the professional accounting firm. Further, you can use either Accounting standards for private enterprises (ASPE), or International Financial Reporting Standards (IFRS) in Canada. Read more about Notice-to-Reader Financial Statements here . Who ...