David Chong Yen from DCY Professional Corporation Chartered Accountants, spoke with Dr. Suham Alexander about tax changes that took effect at the beginning of 2017.
What’s new as of January 1, 2017?
- Elimination of Education and Textbook tax credit (Federal)
- Tuition tax credit is still in place (Federal)
- Starting Sept 1, 2017, tuition, education, textbook tax credit will be eliminated (Provincial)
- Canada Child Benefit is a tax-free monthly amount that families will receive if they meet the criteria
- With respect to costs involved in setting up a professional corporation (PC), the first $3000 is fully tax deductible
- If purchasing assets, not shares, the goodwill can be deducted at the rate of 5% per year
- Consider adding dividend only shareholders to help extract cash from your PC more tax efficiently
- Consider adding equity only shareholders to multiply lifetime capital gains exemptions (LCGE)