Need additional advice from time to time? No problem.

We’ll be there for you when you need us, not just at year end. We will regularly keep in touch to provide advice and answer questions. We will give you the competitive edge over your competition and help you make smarter business decisions. We work on your terms and on your budget.

 Could I borrow to earn?

Take out a loan to buy income-producing assets (such as machinery for a business) or to earn business or property income (such as leasing business premises or buying a rental property).  At year-end, qualified interest is a deduction on clients’ tax returns and can be used to reduce income from any source, not just business or property income. Clients can’t use the loan money to pay personal or living expenses. The ability to write off interest paid on a loan has its origins in the Income Tax Act which states that if funds are borrowed for the purpose of earning business or investment income, the interest paid on such funds is tax deductible.

For interest to actually be deductible, clients must take out loans that lead to the earning of income from a business or property.

And there are other conditions:

  • interest must be paid, or have accrued, in the year the client deducts it;
  • there must be a legal obligation to pay back the loan; and
  • the interest rate must be reasonable, based on market rates for debts with similar terms and credit risks.

A client needs to reasonably expect the borrowed funds will result in income.

How long do I need to keep my records?

Generally, you must keep all of the records and supporting documents that are required to confirm your tax obligations for a period of six years. Six year period under ITA begins at the end of the tax year to which the records relate.

If I fail to provide information?

In a case of CRA’s audit, every person who fails to provide any information or document as required under Part IX of the Act is liable to a penalty $100 for each failure.

Every person who knowingly or under circumstances making  of false statement or omission in a return or other document made with respect to a reporting period or transaction is liable to a penalty to the greater of $250 and 25% of the amount by which any tax amount is reduced or rebate is increased as a result of the false statement or omission.