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What are Eligible and Non-Eligible Dividends?

By |2022-08-28T23:27:10+00:00August 29th, 2022|Accounting, Taxes|

When it comes to dividends, there are two main types: eligible and non-eligible. Eligible dividends are those that meet specific criteria in the Canadian Income Tax Act (ITA). To the contrary, non-eligible dividends do not meet those criteria. This can be confusing for business owners and investors. Let's take a closer look at what makes a dividend eligible or not. Eligible Dividends Eligible dividends are paid by a corporation to its shareholders from its "general rate income pool" (GRIP). To be considered part of the GRIP, earnings must come from business activities in Canada. Usually these dividends are paid by public [...]

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The Tax Consequences of Passive Income in a Canadian Corporation

By |2022-08-21T19:40:22+00:00August 22nd, 2022|Taxes|

Do you have passive income in your Canadian corporation? If so, you need to be aware that it is taxed differently than active business income. Income from investments and property can impact your small business deduction. This, in turn, impacts the amount of tax you pay in your corporation. In this post, you'll learn what passive income is and the impact it has on the small business deduction. What is passive income? Passive income is any type of income that is not earned from active work. This includes, but is not limited to, income from property, such as rental income and [...]

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What is a Shareholder Loan?

By |2022-08-20T22:36:18+00:00August 15th, 2022|Accounting, Taxes|

If you have a company, you may have heard the term shareholder loan. You may even know the current balance of what your company owes you. If you have no idea what a shareholder loan is or whether you have one, that’s okay. In this post, we’ll explain what a shareholder loan is and why the money you withdraw from it isn’t always tax free. What is a shareholder loan? A shareholder loan is, simply put, a loan that a shareholder makes to their corporation. The Canada Revenue Agency (CRA) doesn’t consider this money as income for the corporation, so there’s [...]

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The Business Accountant: Can They Help You Manage Your Money?

By |2022-08-15T20:05:09+00:00August 8th, 2022|Accounting, Business|

Every business owner knows that cash flow is key to a successful company. But keeping track of your finances can be daunting, especially if you're not familiar with accounting terms and concepts. That's where a business accountant comes in. They can help you manage your money and keep your business on track financially. In this blog post, we'll discuss the benefits of working with a business accountant and how they can help you manage your cash flow. What is cash flow? Cash flow is the movement of money in and out of your business. It's important to track your cash flow [...]

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