There’s an old saying we find amusing
“the only sure thing in life is death and taxes.”
It’s true, taxes are as reliable as clockwork, and nobody likes to pay them. Filing can be a complicated process, especially for businesses. But whether you’re an individual or the owner of a company, you’ll make the most of your opportunities to legally and ethically minimize your taxes when you work with a CPA.
Our Tax Return Services
The Canadian Income Tax Act is complex, and change is constant. At Pacific CPA in Nanaimo, BC our team of CPAs have completed years of advanced taxation training and we invest in continued professional development to stay up-to-date on the latest tax updates. As a result, we are well equipped to handle nearly any tax-related problem. Our tax return services include:
Personal Tax Returns
Software programs do an excellent job of improving efficiency and limiting the possibility of basic human error. However, they lack the critical thinking of a trained practitioner who has a solid understanding the client’s unique overall tax situation. When considering whether or not to hire a trained professional, we encourage you to consider the following factors:
- How complicated are your filings (rental properties, investments, business income, sale of property etc.)?
- Are you well versed and up to date on the latest deductions and credits offered by the federal and provincial governments?
- Are you aware of disclosure requirements and potential penalty and interest scenarios imposed by CRA?
- What is the cost of the software you would be purchasing?
- Depending on your sources of income, the accounting fees you incur may be tax deductible to you. This could result in a near 50% refund on the fees you pay.
- What is your time and peace of mind worth to you?
Date of Death (Final) Returns
When an individual dies, a final return must be filed by their legal representative from January 1st up to the date of the death.
Generally, the final return is due on or before the following dates:
- April 30th – For deaths occurring between January 1 – October 31
- Six months after the date of death – For deaths occurring between November and December.
Any income earned by the estate after the date of death is reported on a T3 Trust Income Tax Return.
Corporate Tax Returns
Your corporate tax return is due to be filed 6 months after your fiscal yearend date.
There are many reasons for a corporate restructuring to occur including:
- Preparing for the transfer of your business to a child
- Preparing for the sale of your business to an arm’s length party
- Multijurisdictional/ cross-border issues
- Tax planning
While our firm does not specialize in corporate tax reorganizations, we work closely with various experts in this area to facilitate the process on behalf of our clients.
There are two different types of trusts in Canada
This is a trust or estate that is generally created on and as a result of a death. The terms are established by the will or court order.
2. Inter vivos trust
An inter vivos trust is basically any trust that is not a testamentary trust, and there are many different types. The most common types of inter vivos trusts that we work with are family trusts.
A family trust is basically a relationship in which one person (settlor), gives property to another person (trustee), to manage on behalf of beneficiaries who are usually dependent children and or a spouse. Trusts are often established for small business owners and their estate planning.
An estate is considered a trust. As a result, the executor is required to file a T3 Statement of Trust Income generally by a March 31st due date. The trust is an arrangement in which the trustee holds property for the benefit of the estates beneficiaries. The trust is considered a taxpayer and accordingly must file an annual tax return to report all of the income of the estate until such a time that all of the assets of the trust have been distributed to the beneficiaries.
Upon completion of all distributions to beneficiaries, a request for a clearance certificate can be sent to CRA. In many cases this process is time intensive as estates can be very complex, in particular when contested with a legal challenge.
Personal & Corporate Tax Planning
Personal tax planning may include:
- RRSP vs TFSA
- Sale of a house
- Retirement & Estate planning
Corporate tax planning may include:
- Wages vs dividends
- Share restructuring & estate planning
- Lease vs buy analysis
Estate planning involves creating a comprehensive plan for the transfer of your assets after death. Unfortunately estate planning is ignored by many until the latter stages of life. However, estate planning is something that should be considered by every adult, in particular those with children. A comprehensive estate plan usually involves participation from the following parties:
- Lawyer to help create a will, power of attorney, assign an executor, and in some cases establish a trust.
- Financial Advisor to help create a financial plan, manage investments, and set up life insurance, disability insurance, and critical illness protection plans.
- Accountant to put in place tax planning strategies to minimize the tax implications on death. Furthermore, the accountant will maintain tax compliance requirements of the estate upon death and correspond with the lawyer and financial advisor to facilitate the process.