• Last day to file T4 and T4A slips
• Proposed deadline to make a charitable donation for the 2024 tax year

March 3

• Last day to make RRSP contribution for the 2024 tax year

March 15

• Quarterly tax installment deadline for T1 Returns

March 21

• If you file your taxes electronically by March 21, 2025, you can receive your next Canada Carbon rebate (CCR) payment on April 15, 2025.

April 30*

• T1 tax return deadline (excluding individuals with self-employment income)
• Deadline to pay 2024 tax owing without interest or penalties (including individuals with self-employment income)

*Tax Tip: Even if you are expecting a refund, it’s better to submit your returns prior to the April 30th deadline to prevent a disruption to your benefit and credit payments, such as old age security (OAS), GST/HST credit and Canada child benefit (CCB).

June 15

• Deadline to file taxes if you or your spouse or common-law partner are self-employed

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With very few exceptions, anyone over the age of 18 who works in Canada and earns more than $3,500 per year is required to contribute to the Canada Pension Plan (CPP). For self-employed individuals, CPP is calculated on your personal return and included in your total income tax payable at the end of each year.  

The CPP amount is calculated as 11.9% of your net business income (after expenses) up to a maximum of $8,068.20 for 2025. 

Employment Insurance (EI)  

EI contributions are optional for self-employed individuals including directors of a company owning more than 40% of the shares. When you contribute, it allows you access to maternity, parental, sickness, compassionate care, and family caregiver benefits if you need to stop working. 

When you register for EI, the premium is calculated on your tax return and included in your total income tax payable each year. Premiums are calculated at $1.64 for every $100 you earn, up to a maximum of $1,077.48. 

To register you will need to apply through Service Canada. Registering and cancelation is completed annually, so any changes must be made before December 31st each calendar year.  

Make sure to notify your accountant if you are registered for EI contributions, as it is optional it will not automatically be applied to your tax return. 

Registered Retirement Savings Plans (RRSPs) 

A self-employed individual and owner of a corporation can still contribute to RRSPs. RRSP contributions can help lower your tax payable on your personal tax return.  

RRSP room is calculated as lower of employment earnings and the annual RRSP limit. The employment earnings number includes net income from self-employment business earnings.   

For most corporations, we recommend owners of the company pay themselves through both wages and dividends rather than dividends only. Dividends are not included in the employment earnings calculation. 

The post CPP, EI and RRSP for Business Owners  appeared first on Aire Tax and Business Solutions.

Basic Principles 

A capital gain is when you sell an asset such as a house or an investment for more than you bought it for. Then 50% of this amount is included in the calculation of net income and taxed at the normal tax rate.  

Example: 

I bought shares for $100 and sold them for $150, resulting in a gain of $50. The portion of the gain that is subject to tax is $50* 50% = $25. Then this taxable amount is multiplied by the tax rate $25*15% = $3.75.  

Capital gains can also be split when you have shared ownership of an asset. For example, a couple who sells a rental property will split the capital gains 50/50. Expenses such as legal or real estate fees can be deducted off the taxable capital gains amount. 

The complexity of capital gains tends to stem from the rules around Adjusted Cost Base (ACB) and Principal Residence Exemption.  

Adjusted Cost Base 

In simplified terms, the adjusted cost base is a revised and more current value of your asset. This reduces the taxable gain amount.  

There are several ways to calculate an adjusted cost base. For an inherited property for example, you would set the ACB as the value of the property at the date of inheritance. For a rental property, you could add the costs of renovations to the original price you bought the property for.  

The calculation of the ACB and best practice can be complex. We recommend discussing your specific situation with your accountant.  

Principal Residence Exemption 

The Principal Residence Exemption is an exemption from capital gains tax for your property that you live in most of the time you have owned it. In most cases this would be a family home.  

You can only have one property designated as your principal residence at a time, however if you own more than one property you can also split the exemption.  

For example, if you own a home in both Nova Scotia and Ontario from 2010 to 2025. The Nova Scotia home could be allocated as the principal residence in 2010-2020 and Ontario for 2021-2025. In this scenario, if you sold the Nova Scotia home you would only pay a proportion of the capital gains tax for 5 out of the 15 years you owned it/the time it was not designated as your Principal Residence.  

In all scenarios, the sale of a property must still be recorded on your tax return, even if it is 100% exempt from capital gains. 

Losses on the sale of an asset are not tax deductible, but they can be offset against any gains in the current year or carried forward to use against any future gains.  

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Benefits to incorporating 

• Lower tax rate – a small business deduction rate is available for income under $500,000 a year.  

• Limited liability – your business is considered separate from you as an individual. It prevents individuals from being held personally responsible for their company’s debts or financial losses. 

• Flexible year end – incorporated businesses can set a different year-end date. Businesses that are seasonal can often benefit from having a year-end date after busy season.

• Control over how profits are distributed – a portion of the profits can be distributed as wages or dividends. Whereas if you are self-employed, all income is taxed personally.

• More access to capital and loans – financial institutions are often more willing to provide loans and capital to an incorporated company. 

• More than one owner – you can set up more than one shareholder or owner and divide the percentage of ownership. This is often advantageous for a family-run business where profits can be split between shareholders.  

Downsides to incorporating  

• Set up costs – to set up an incorporated company you will require a lawyer to set up the paperwork. Any changes to the company such as adding a shareholder or changing the name would also require more legal fees and reissuance of the paperwork.  

• Complex tax returns and accounting fees – The accounting costs are higher for corporate tax returns and financial statements need to be prepared each fiscal year. If you have a high number of transactions, you may also require a bookkeeper. 

• Cannot offset tax payable with personal tax credits on your corporate return. For example, in a sole proprietorship you could offset RRSP contributions or medical expenses to reduce your tax payable however these would have no impact on a corporate return.  

To have a clearer understanding of your specific circumstances, Aire Tax and Business Solutions can complete a comparison of your tax payable if you incorporate vs being self-employed.  

The post Incorporated vs Self-Employed  appeared first on Aire Tax and Business Solutions.

To receive the benefit you would have to meet the following criteria:

• Filed your tax returns for 2023 before the end of December 2024
• Contributed to CPP (Canada Pension Plan or Quebec pension plan) and EI (Employment insurance or Quebec Parental Insurance Plan) or claimed EI benefits
• Be a resident of Canada on March 31, 2025
• Have not been incarcerated for a period of at least 90 days immediately prior to April 1, 2025
• Not decreased on April 1, 2025.

Make sure to keep your CRA account updated with your current direct deposit information to receive the benefit. If you have any questions on your specific case and eligibility, please contact us.

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Here are a few examples:  

• Medical insurance premiums paid personally/not through your employer 

• Crutches, wheelchairs, walkers, or other walking aids  

• Heart or blood pressure monitoring devices  

• Injection pens (such as an insulin pen) 

• Travel expenses for medical treatment that cannot be provided to you locally (over 40km from your home) 

• Naturopath appointments – supplements are not allowable 

• Massage and acupuncture 

• Pre-natal and post-natal treatments 

• Additional school equipment, facilities, or staff costs for a person’s physical or mental impairment   

• Gluten-free food products 

• Moving expenses to move a person who has a severe and prolonged mobility impairment, or who lacks normal physical development, to housing that is more accessible.  

Some of the above expenses would require a prescription or letter from a physician to be claimed. 

You can find the full list and any details of evidence required on the CRA website:

The post Other Medical Expenses appeared first on Aire Tax and Business Solutions.

The minimum you would need to claim medical expenses is the lessor of 3% of your net income or $2,635 (this number varies depending on the tax year). Each province also allows an amount for medical expenses. For Nova Scotia, the limits are the lessor of $1,637 or 3% of your net income. 

When filing jointly with a spouse or common law partner it can be advantageous to claim the medical expenses paid by both individuals on the lower income spouse’s return to maximize the amount you can claim. 

Examples  

Scenario 1: net income of $30,000 and medical expenses of $1,000. 

The minimum you could claim would be $900 (3%). In this scenario you could claim a $100 credit against your federal tax amount owing and another $100 on your provincial tax amount owing.  

Scenario 2: net income of $60,000 and medical expenses of $1,700. 

The minimum you could claim would be $1,800 (3%) for federal taxes. In this scenario you would not have enough medical expenses to claim against your federal tax amount owing however you could claim $63 against your provincial taxes. 

Medical expenses can be claimed for dependents, including children under age 18 and any other dependent adults under your care (for example a family member with a disability). You can also claim expenses for a child over the age of 18 who is studying at university or college.  

Medical premiums deducted through normal payroll will automatically be added to your medical expense calculations.  

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